WisBusiness: Microbrewers wary of potential hike in beer tax

By Andy Szal


MADISON — Officials from two Wisconsin microbreweries told a legislative committee that an increase in the state’s beer tax would cost their companies jobs and consumers dollars — not pennies — when they buy beer.

“There’s no margin to absorb any more taxes,” said Carl Nolen, president of the Wisconsin Brewers Guild and of Middleton’s Capital Brewery. Nolen and Jeff Hamilton of Glendale’s Sprecher Brewery said a proposal by Rep. Terese Berceau, D-Madison, to increase the beer tax would result in job losses.

“To think that increasing the beer tax 100 percent would not have an effect … is really naive,” Hamilton said. “For us that would cost about three to four jobs. … We have continuously added jobs for the entire 25 years we’ve been in business.”

Nolen added that a 3-cent increase at the brewery level would likely translate into a price increase of 25 cents to 50 cents at the bar, and that the industry, contrary to popular belief, is suffering in the current economic climate along with other industries.

“You don’t see beer sold for $4.03,” Nolen said, noting that both wholesalers and retailers would likely raise prices to compensate for the increased costs at production. “We don’t control the next tier, or the tier after that.”

“We buy local,” Nolen added, saying the entire industry could face a 10 percent setback should the tax go through. “We’re small businesses here.”

Proponents of increasing the beer tax to help pay for a crackdown on drunken driving rallied ahead of the public hearing where Nolen and Hamilton spoke.

State Rep. Terese Berceau, D-Madison, warned attendees they would hear a slew of arguments that the proposal would target blue-collar drinkers unfairly, drive jobs out of Wisconsin and force the beer industry to look elsewhere to grow.

Berceau responded to each argument and mocked the suggestion brewers would go elsewhere.

“Where are they going to go? Wyoming and Missouri are the only states with a lower beer tax,” she said.

Some lawmakers have argued increasing the beer tax is a non-starter, and a Senate committee last week approved increasing the liquor tax to pay for the drunken driving reforms.

Dr. Robert Golden, dean of the University of Wisconsin School of Medicine and Public Health and leader of the AWARE Coalition, said at the committee meeting that any reasonable person would describe the proposed increase as “modest,” especially given the state’s deadly and expensive problem with alcohol abuse.

“Let’s all keep in mind that what we are talking about is a two-and-a-half cent increase on a glass of beer,” Golden said.

The bill would increase Wisconsin’s beer tax by 2.5 cents a bottle, which would be the first hike in the tax since 1969. The money would go toward drunken driving enforcement.

A Senate committee approved a bill last week that would increase the liquor tax to pay for a package of drunken driving reforms, which supporters said was more likely to make it through the Legislature than an increase in the beer tax.