lobbying

Big Wins for Small Brewers

As expected, the U.S. Justice Department has approved the merger between Anheuser-Busch InBev and SAB Miller. However, MarketWatch.com’s Jason Notte reports that the Brewers Association, which represents craft brewers, won major concessions from the government:

  • A-B, which sells 10 percent of beer through company-owned distributors, can’t acquire any more distributors.
  • A-B  can’t require independent distributors to drop competing brands, and can’t offer incentives that would reward distributors for giving A-B brands preferential.
  • Any future craft brewery acquisitions by A-B must first receive Justice Department approval.

Notte attributes the craft brewers’ win to the Brewers Association’s paying more attention to government relations. The BA has hired a full-time lobbyist in Washington; and, earlier this year, it flew craft brewery executives to the capital to ask members of Congress for tax relief.

According to Notte, state capitals will become the next battleground, now that states–even thouse as small as North Dakota–have enough craft brewers to form a trade association. Some of the issues these associations will raise include bars selling tap handles to the highest bidders, supermarkets putting distributors in charge of choosing their inventory, and limits on the number of liquor licenses.

A-B Bets Big on Excise Tax Relief

Most companies cut back their lobbying budgets but according to Aimee Duffy of The Motley Fool, Anheuser-Busch InBev is spending heavily in favor of two tax measures currently before Congress.

Readers of this blog are probably aware of the Brewers Excise and Economic Relief (BEER) Act of 2013, which would cut the federal beer tax in half, and give small brewers an even more generous tax break; and the Small Brewer Reinvestment and Expanding Workforce (Small BREW) Act of 2013, which would reduce the beer tax by 50 percent on the first 60,000 barrels and by 11 percent on each barrel beyond that.

According to the website govtrack.us, the BEER Act has zero chance of getting through Congress, and the Small BREW Act has only a 2-percent chance. In spite of those odds, A-B spent $4.3 million on lobbying, most of it to make sure these bills pass.

Duffy finds method in A-B’s madness. If the BEER Act passes, the company’s tax bill would drop by around $500 million a year–more than a 10,000 percent return on a $4.3 million lobbying investment.

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