USA: Ohio's breweries against doubling the beer tax

Major breweries and Ohio's beer industry has been fighting the effort to raise the tax from 18 cents per gallon to 36 cents (41 cents per case) by attending legislative hearings and rallying support at bars and restaurants, The Columbus Dispatch, Ohio commented on April 20.

Last week, the House approved the governor's budget, which includes the beer tax and other tax reforms. The Ohio Senate is expected to vote by June.

According to sources, when the federal government doubled beer taxes in 1991, nearly 60,000 jobs were lost nationally because of reduced consumption.

"We figured we had to step it up a notch and raise the profile," said Andrew Herf, vice president of the Wholesale Beer and Wine Association of Ohio.

The brewers said that if beer taxes increase, Ohio consumers could pay about a $1 more per case. Eventually, the higher cost could lead to a 6 percent drop in beer consumption, according to an economist hired by the association. “Less drinking would mean trouble for the state's beer production, ranked fourth in the nation.”

But Kevin Lee, manager of the Anheuser-Busch brewery on the North Side, said the beer tax "penalizes and dwarfs any benefits." More than 900 people work at the Columbus brewery, the fourth-largest of the company's 12 domestic breweries. Lee would not speculate whether local jobs could be lost but said employment is affected by consumption.

Although the tax increase would amount to 41 cents per case, Lee said consumers likely would pay more because of markups as the beer makes its way through wholesalers and retailers.

24 April, 2005