Half Acre and Sam Adams – both “Small Brewers?”

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June 24, 2010 at 6:27 am

Tom Keith

Interesting developments. The fourth largest brewer in the United States, Boston Brewing (commonly known as Sam Adams), which considers itself a “craft brewer,” is getting too big to fit into that definition (less than 62 million gallons — 2 million barrels — of beer produced per year). That’s important to them. The federal government imposes lower excise taxes on what it describes as “small brewers”  – which essentially have the same definition as the Brewers Association definition of “craft brewers.”

Only three brewers nationally are big enough to not qualify as small brewers  – two of which are nominally Chicago-area-based. #2 MillerCoors has its headquarters on Wacker Drive in Chicago, while #3 Pabst has headquarters in west suburban Woodridge. But much of the brewing for both those companies is done at the large Miller facility in Milwaukee.

Like Pabst, many of Sam Adams beers have been contract brewed in the past – Sam Adams may oversee the operation, but they didn’t actually own the brewery. But as Boston Brewing has grown, it’s purchased more breweries, so it now produces much of its beer in breweries it owns.

Still, Boston Brewing doesn’t want to lose its “small brewer” status, so Jim Koch, of Boston Brewing worked with his Senator, John Kerry (among others), to introduce Senate Bill S 3339. (The House has a similar bill, H.R.4278.) With this bill small brewers will be rewarded with the reduction of the excise tax on the first 60,000 barrels of beer produced from $7 to $3.50 per barrel and from $18 to $16 per barrel of production exceeding 60,000 barrels up to 1.94 million barrels. Anything over 1.94 million barrels will be taxed at the typical large brewer rate of $18 per barrel.

The full story is here:

http://www.beer-universe.com/beer-education-article/2010-06-16/Boston-Beer-Company-Tries-to-Keep-Its-Craft-Brewing-Status/

I asked Gabriel Magliaro, of Half Acre Brewing (4257 N Lincoln, Chicago) what he thought of the proposed legislation.

“When it comes down to 2 million or 6 million [barrels, as a definition of a “small brewer”] it really doesn’t make any difference. What Boston Beer is trying to do is maintain its pride as a small brewer. I wish him [Jim Koch] luck in his brewing endeavors. Speaking as a small brewer, I think the 60,000 barrel limit should be increased to 200,000 barrels.”

“I believe in empowering small brewers, and I wish them the best of luck in paying their fair share to the government. But here, we try to have fun, and not get too worried about legislation. I do follow that stuff real closely, though.”

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