The craft brewing industry has become a multi-billion dollar business, and as it looks to expand even more, it's pushing Congress to let it tap into a lower tax rate. But those efforts have drawn the ire of the nation's biggest brewers, who want any tax cut to apply to the entire industry. Washington bureau reporter Michael Scotto filed the following report for NY1.
Brooklyn Brewery is one of the largest craft breweries in the country, but owner Steve Hindy said his business, and others, could be helped if the federal government gave them some tax relief.
"It's a very difficult business to break into," Hindy said. "It takes years before you make a profit."
That's why small brewers are pushing Congressional lawmakers to pass the Small BREW Act. The legislation would, among other things, cut the federal tax craft brewers must pay on each of the first 60,000 barrels they produce in half.
Rep. Patrick McHenry of North Carolina sits on the House Small Brewers Caucus, and is a co-sponsor of the bill.
"What they want is a small amount of relief," McHenry said. "They don't want any preferential treatment. What they want is the ability to get up and running."
The push for a tax cut comes as the industry continues to grow. Nationally, there are a little more than 2,400 small breweries, which is an increase of 18 percent since 2011. Together, they produce about 13 million barrels per year, or 6.5 percent of the total market.
Not everyone is toasting to the bill, however. In fact, it's creating an industry bar fight. The group that represents some of the largest producers is lobbying to block the legislation.
"It's got to protect all beer drinkers from a tax increase, no matter what it says on the label," said Joe McClain, president of the Beer Institute. "So it has to be fair, comprehensive, and it can't pick winners or losers."
The Beer Institute wants Congress to pass soon-to-be-introduced legislation known as the BEER Act. That bill would completely eliminate the federal tax on the vast majority of small brewers, while also giving a tax cut to large beer producers.
The Brewers Association, which represents craft brewers, said it won't oppose the larger tax bill, but thinks the government's focus should only be on giving tax relief to the smallest producers.