Senate Tax Bill Delivers $642 Million Dollar Turkey for Boston Beer and Friends

Sen. Rob Portman, amendment author, banks big bucks from Big Alcohol.

Alcohol Justice is raising a red flag over language from S. 236 / H.R. 747—the Craft Beverage Modernization and Tax Reform Act of 2017— inserted into the Senate version of the Republican tax cut bill that passed out of the Senate Finance Committee on a party line vote Thursday, November 17, 2017. The language mandates savage, reckless cuts to alcohol excise taxes, as contained in an amendment put forth by Committee Member Sen. Rob Portman (R-Ohio). The Senator, according to has received $210,981 from beer, wine and liquor interests since 2010, including at least $29,000 from Boston Beer executives and family members.

According to an Alcohol Justice report, the proposed two-year Senate tax break would cost the U.S. $642 million. In stark contrast to the Craft Beverage Modernization and Tax Reform Act’s stated intent to nurture small brewers, distillers, and wineries, a lion’s share of the cuts accrues to Big Alcohol. Hard liquor distillers making over 100,000 proof-gallons a year take home almost 75% of the cuts. Of the projected $126 million annual giveaway to beer manufacturers, $50 million will be claimed by just seven “mega-craft” brewers.

In light of the House of Representative’s November 16, 2017, passage of its version of the tax bill which, if passed, would eliminate public funding for substance abuse treatment, public health advocates are expressing immediate concern, predicting an explosion of alcohol-related harm in the country.

“This bloated turkey is moving fast,” said Michael Scippa, Public Affairs Director for Alcohol Justice. “We need to reach out to senators right now and tell them: Stop. Think. Reject this language. Don’t play political chicken with American lives to make Big Alcohol more profitable.”

The revisions to the Senate’s bill come at the behest of six of the largest alcohol special interest front groups in the country, including the Beer Institute, the Wine Institute, and the Distilled Spirits Council. In a November 13, 2017, letter to the Senate Finance Committee Chairman Orrin Hatch (R-Utah), the lobbyists complain, “outdated regulations and tax laws impede the growth of these individual businesses.”  

“The U.S. federal alcohol excise tax hasn’t budged since 1991,” said Bruce Lee Livingston, CEO/Executive Director of Alcohol Justice. “Of course it’s outdated. It hasn’t even kept up with inflation. The industry says ‘craft’ and people think of a family woodshop,” added Livingston. “But that word means nothing now. Alcohol lobbyists have rewritten it. Look at Sam Adams. They pull down almost a billion dollars a year, but this tax cut babies them.”

Sam Adams is produced by Boston Beer whose CEO Martin Roper enjoys an estimated annual compensation in excess of $43 million. Boston Beer founder and chairman C. James Koch’s compensation is not reported yet it is safe to say these men are not struggling, small craft brewers. The tax savings from the Senate giveaway will put additional millions in their pockets.

Sam Adams was already notorious for bullying the Brewers Association—also a cosignatory on the letter to Sen. Hatch—into raising the production threshold for “craft brewery” to accommodate the brewer’s growth. They have since managed to influence key legislators, in particular Senator Rod Wyden (D-Oregon), who authored the original S. 236, and Portman. These bills all offer tax cuts to very large volume producers of beer, wine, and spirits.

However, the effects of this on public health will be immediate. Evidence abounds that raising alcohol excise taxes reduces harmful drinking. Alcohol Justice strongly favors they be doubled. This would result in a 35% decrease in alcohol-related mortality, 11% reduction in deaths from alcohol-related crashes, and markedly reduce incidences of sexually transmitted infections, violence and crime. Moreover, the revenue generated by alcohol excise taxes can be earmarked for healthcare, prevention, and recovery efforts—a concept Alcohol Justice refers to as “Charge for Harm.”

Current economic harm from excessive alcohol consumption in the U.S. costs $249 billion annually, including 88,000 deaths, alcohol-related car crashes, violence, chronic illness, and lost productivity.

The U.S. Substance Abuse and Mental Health Services Administration (SAMHSA) estimates that almost 40% of individuals seeking treatment for alcohol use disorder were unable to access it. Moreover, the House version of the U.S. tax bill seeks to begin eliminating the Affordable Care Act and its access to hospital care. The acute harms from alcohol use—including accidental injury, toxicity, and violence—will be exacerbated by the elimination of the tax while access to treatment will be more difficult.

“If you want to keep alcohol safe, you invest in prevention and treatment,” said Scippa. “Looking at the Senate and House versions of this tax bill, it’s like the FAA saying inspecting a plane takes too long and parachutes are too expensive.”

Alcohol Justice strongly opposes the Senate version of the tax bill and urges everyone concerned with the health of the country to act now to oppose it. Tell your senators to reject the Portman amendment and keep Big Alcohol from hijacking Congress.

TAKE ACTION to tell your Senator to reject the Portman Amendment tax breaks for Big Alcohol.


READ MORE about the Craft Beverage Modernization Act’s $3.2 billion giveaway.

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Scotland Set to Go Forward with Minimum Unit Pricing

A Scottish gent drinks relatively low price alcoholOn November 15, 2017, the UK Supreme Court cleared the way for Scotland to institute a decisive strategy to control death and injury from alcohol—minimum unit pricing (MUP). By setting a floor for retail price of alcohol, MUP places high-ABV, low-price beverages in a higher price tier, creating a financial barrier to binge drinking. Although the policy had been passed in 2012, the Scotch Whiskey Association (an industry group backed by global alcohol giant Diageo) sued in both UK and European Union courts to keep it from going into effect. After the 2017 decision, the Association announced they would no longer be challenging it, marking a victory of public health advocates in Scotland and a promising precedent for legislators worldwide.


“This has been a long road—no doubt the policy will continue to have its critics—but it is a bold and necessary move to improve public health,” Scotland’s First Minister Nicola Sturgeon told the BBC.


Unlike strict price controls or excise taxes, Scotland’s minimum unit pricing sets only the shelf price, meaning the retailer keeps all profits above the prices set by manufacturers. While this does not qualify as a charge-for-harm strategy since no funds are recouped by the state, it was a key to the Supreme Court’s decision. The judges praised the policy’s ability to target “the groups most affected in a way that an increase in excise or VAT does not.”


Scotland is not the first country to implement MUP. Canada empowered its provincial governments to set a floor price for alcohol, a policy that seems to effective when used. A recent study demonstrated that a 10% increase in minimum price in Saskatchewan was associated with an 8% decrease in consumption and 9% decrease in alcohol-related hospitalizations. (By comparison, the province of Alberta opted not to institute MUP, and saw no change in consumption or hospitalization.)


Scottish Health Secretary Shona Robison expects similar reductions. Speaking to the Guardian, she cited 1,265 alcohol-related deaths in 2016, a rise of 10% from the previous year. “These numbers are completely unacceptable. Behind every one of these statistics is a person, a family, and a community.” With MUP in place, Robison’s department predicts 392 fewer deaths and 8,254 hospital admissions tied to alcohol-related causes.


Moreover, young adults are especially sensitive to price, liable to binge drink, and susceptible to harm from injury, accident, and suicide. By setting a price threshold that affects the products specifically targeted at youth, MUP performs double duty as both harm reduction and prevention.


“This was a hard fought victory against an industry not afraid to throw its weight and money around,” said Bruce Lee Livingston, CEO/Executive Director of Alcohol Justice. “Other countries need to take this lesson—price is prevention and Big Alcohol can be beaten.”


The BBC report notes that David Cameron, at that time the Prime Minister of the UK, pushed for MUP in 2012. That effort wilted in the face pushback from Big Alcohol, but after Scotland’s success, the other constituent countries of the UK are expected to approach similar legislation individually.


MUP goes into effect in Scotland on May 1, 2018. Its effectiveness will be monitored and the policy subject to a renewal vote after 6 years.


READ MORE about the legal fight for minimum unit pricing.


READ MORE about the fight for common-sense regulations in alcohol sales.