Is the Price of New York Beer on the Rise?
The state of New York has the third most breweries behind California and Colorado. Over the past 3 years, the number of breweries rose from 48 to 89 and there are currently plans in place for 41 new breweries. The brewery market in New York accounts for 8,000 direct jobs and indirectly as many as 60,000. The prosperous times of popular New York breweries such as Brooklyn Brewery and Sixpoint Craft Ales may be in jeopardy.
The Shelton Brothers, a Massachusetts importer of popular foreign brews such as Mekkeller, filed a lawsuit with the state of New York bringing into question two state excise taxes, from which New York brewers were declared exempt. The March 28th ruling declared the law unconstitutional and as a result, all brewers now have to pay 14¢ per gallon for brews sold within the state and an additional 12¢ per gallon for brews sold in New York City. The revocation of this law raises the cost of a barrel of beer by $3.50 and 48¢ for a case of beer.
The negative effects to this change could be far reaching. The most obvious change is for the consumer. The increased cost to the brewer means that wherever you purchase your brew, New Yorkers should expect the median price of beer to increase. It seems to discourage the development of new local breweries and those within the state looking to expand will try to cross state borders. Southern Tier and Anheuser Busch have already established breweries in New York, but other larger breweries that are looking to increase their presence out east will look at states besides New York. All of these factors equate to fewer new jobs in the state.
The backlash from the small brewery owners was heard loud-and-clear by local lawmakers and they have sprung into action. Senator Charles Schumer is currently working on a Federal relief plan that has been tabbed the Brewer’s Employment and Excise Tax Relief Act, or the BEER Act. Under this proposal, the $7 tax charged per barrel would be cut in half for the first 60,000 barrels produced and lowers the same charge by $2 on the next 1.94 million barrels produced. On the local front, Senator Lee Zeldin has introduced a bill that would provide a tax credit that would nullify the 14¢ per gallon tax for the first 200,000 barrels produced. If these new laws are passed, it shows signs that New York is interested in having patrons drink local, which we alluded to in this article: Can the Craft Beer Market Continue to Thrive?
I am just happy to know that politicians are hard at work on important issues for a change.
Your Choice. Your Beer. Drink Up.
- Beer Universe