Big Beer Companies Prepare For War With Craft Brewers Over Taxes

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The Small Brewer Reinvestment and Expanding Workforce Act, or Small BREW Act, reintroduced this year by Rep. Jim Gerlach (R-Penn.), is set to ignite a war that pits small breweries against industry Goliaths, The Hill reports.

From The Hill:

If enacted, the Small BREW Act would cut the federal excise tax on beer from $7 a barrel to $3.50, which is placed on a small brewer’s first 60,000 barrels produced per year. After that initial 60,000 barrels, small brewers must pay $18 per barrel, which would be lowered to $16 under the bill.

In addition, the bill would expand the tax code definition for a small brewer. Right now, brewers who produce up to 2 million barrels of beer per year are considered small brewers. The legislation would raise the limit to 6 million barrels per year.

The Beer Institute, an organization that boasts membership including Anheuser-Busch and Heineken, among others, is opposing the bill, calling it "a giveaway" for small breweries that are already profitable, according to The Hill.

But it's been an uphill battle for craft brewers entering the industry, which faces a maze of regulations and barriers to entry. Small brewers have made gains however — they made up 5 percent of beer volume share in 2011 for the first time ever, according to the Brewers Association.

The Beer Institute said it will support another bill it hopes will be introduced this year called The BEER Act, which would have tax benefits across the board.

An industry spokesman told The Hill that past versions of the bill included tax reductions from $18 to $9 per barrel for large brewers, and $7 to $3.50 per barrel for small brewers.