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Statements on Introduced Bills and Joint Resolutions

Floor Speech

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Location: Washington, DC

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Mr. KERRY. Mr. President, today Senator Crapo and I are reintroducing legislation to assist small brewers across the country. The Brewer's Employment and Excise Relief, BEER, Act of 2011 would reduce the excise tax on domestic small beer producers as well as update the definition of what constitutes a small brewer to reflect today's market. Senators Wyden, Snowe, Schumer, Cornyn, Leahy, Burr, Mikulski, Scott Brown, Merkley, Wicker, Sherrod Brown, Chambliss, Tester, Cochran, and Cantwell are cosponsors of this legislation.

As our economy continues on a track to recovery, we should remain focused on reducing unemployment and putting American's back to work. This legislation will do just that by helping an industry that is hiring and plans on expanding. Massachusetts is home to 38 small breweries.

Though there has been a continued increase in consumer demand for the unique brews created by these small brewers, these beer producers operate at a distinct disadvantage when compared to the largest brewers in this country. While demand is growing, small brewers account for just 5 percent of beer sales nationwide and they face higher costs for production, raw materials, and market entry when compared to their much larger counterparts.

The BEER Act legislation will revise the classification of a domestic small brewer, a definition that has not been updated since 1976. Under current law, small brewers are limited to those that produce 2 million barrels of beer per year. This legislation would update and raise the ceiling for the small brewer tax rate to 6 million barrels per year to reflect the original intent of differentiation between the large and small brewers. The largest beer producer in America used to produce 45 million barrels annually and that has increased to over 100 million barrels.

This legislation will also lower the excise tax rate on these small brewers on their first 60,000 barrels produced from $7 per barrel to $3.50 per barrel. Currently for the production over 60,000 barrels up to 2 million barrels, these brewers pay $18 per barrel in taxes, the same amount that the large brewers pay. This legislation would reduce that rate for small brewers to $16 per barrel.

Small brewers employ nearly 100,000 people nationwide. This legislation will provide tax relief for this important industry, and allow these companies to expand both their production and their work force. A March 2010 economic analysis of this legislation done by Dr. John Friedman of Harvard University has estimated that the legislation will stimulate job creation at a rate of 2,700 new jobs in the first year to 18 months, with an additional 375 new jobs each year for the following 4 years.

The benefits do not simply begin and end with the ability for these small breweries to grow. This legislation would benefit the consumer buying a 6 pack of Sierra Nevada or Harpoon in their local supermarket where prices on craft beer would be reduced by about 20 cents per case. The farms in the states that produce the barely, hops, and other materials that go into these fine brews would also see an increased demand for their products.

This legislation would provide important benefits to America's small brewers and spur economic activity. It will provide relief and allow them to expand to meet the demands of a growing marketplace. I urge my colleagues to support this legislation and support small, domestic beer producers.

END


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