MONROE - A 2.4 cent per bottle proposed state tax increase on beer adds up fast when it comes by the barrel.
Proponents of the proposed tax hike are painting it as a small increase, but by the barrel it's a big increase, Gary Olson, president of Minhas Craft Brewery in Monroe, said.
"Do the math," he said.
Taxes on a 31-gallon barrel of beer will go from $2 to $10, if the state legislature passes an amendment, proposed by Rep. Terese Berceau, D-Madison.
In December, the Wisconsin District Attorneys Association proposed raising the beer tax to pay for more prosecutors to handle alcohol-related cases. The increase hits all fermented malt beverages, and the bill, if passed, will go into effect July 1, 2009.
A coalition of more than 50 law enforcement agencies, hospitals and health care workers, politicians and others formed in November to push for the higher tax and tougher drunken driving laws.
"We pay state and federal taxes," Olson said. "This is $3 more than we pay in federal taxes."
Olson did not deny the increase would get passed on to consumers, but he also suspects prices at retail counters and particularly taverns would jump an even nickel.
Because the price of beers vary widely, Olson also admitted that the tax would hurt purchasers of the less expensive beers more so than those who consume higher-priced varieties. Cheaper beers would carry a higher rate of tax.
"It's picking on the little guy," he said.
The tax on beer has only been increased three times since prohibition ended, and the beer industry hasn't seen a tax increase in 40 years.
Raising the tax now would not only hurt bars, which are already seeing a decrease in customers due to the recession, but it would also harm smaller craft breweries, Tavern League lobbyist Scott Stenger said.
"The worst possible time to look at doing something like this is in this economy," Stenger said.
Exported Wisconsin beer will also carry the new tax. The increase puts pressure on competition, not only between states but also between countries, Olson said.
Minhas ships beer to Canada, where American beer sells cheaper than Canadian, and Wisconsin breweries will lose out with drinkers in Minnesota, where the tax is currently at $2 a barrel.
Wisconsin's tax is two or three times less than what neighboring states charge and third lowest nationwide, behind only Missouri and Wyoming.
Wisconsin is still home to 66 smaller craft breweries, according to the national Brewers Association. That is 10th highest per capita. Green County is home to Minhas and New Glarus Brewing Company.
Deb Carey, owner of the New Glarus Brewing company, finds the bill targeting small breweries, those producing under 300,000 barrels a year.
Breweries such as Miller Brewing Company in Milwaukee; City Brewing Company in La Cross and Jacob Leinenkugel Brewing Company in Chippewa Falls, will not see the tax hike, she said.
"It gives an unfair competitive advantage to big and out-of-state brewers," she said. "They are taxing exactly the brewers who put up the brick and mortar facilities."
New Glarus Brewing, producing 75,000 barrels last year, paid $150,000 in state beer tax.
Carey said the new tax would push the tax to $750,000 - more than the cost of the new facility built within the past two years and more than she pays in employee health care.
"Don't pretend that doesn't affect my ability to hire people," she said.
Proponents of the proposed tax hike are painting it as a small increase, but by the barrel it's a big increase, Gary Olson, president of Minhas Craft Brewery in Monroe, said.
"Do the math," he said.
Taxes on a 31-gallon barrel of beer will go from $2 to $10, if the state legislature passes an amendment, proposed by Rep. Terese Berceau, D-Madison.
In December, the Wisconsin District Attorneys Association proposed raising the beer tax to pay for more prosecutors to handle alcohol-related cases. The increase hits all fermented malt beverages, and the bill, if passed, will go into effect July 1, 2009.
A coalition of more than 50 law enforcement agencies, hospitals and health care workers, politicians and others formed in November to push for the higher tax and tougher drunken driving laws.
"We pay state and federal taxes," Olson said. "This is $3 more than we pay in federal taxes."
Olson did not deny the increase would get passed on to consumers, but he also suspects prices at retail counters and particularly taverns would jump an even nickel.
Because the price of beers vary widely, Olson also admitted that the tax would hurt purchasers of the less expensive beers more so than those who consume higher-priced varieties. Cheaper beers would carry a higher rate of tax.
"It's picking on the little guy," he said.
The tax on beer has only been increased three times since prohibition ended, and the beer industry hasn't seen a tax increase in 40 years.
Raising the tax now would not only hurt bars, which are already seeing a decrease in customers due to the recession, but it would also harm smaller craft breweries, Tavern League lobbyist Scott Stenger said.
"The worst possible time to look at doing something like this is in this economy," Stenger said.
Exported Wisconsin beer will also carry the new tax. The increase puts pressure on competition, not only between states but also between countries, Olson said.
Minhas ships beer to Canada, where American beer sells cheaper than Canadian, and Wisconsin breweries will lose out with drinkers in Minnesota, where the tax is currently at $2 a barrel.
Wisconsin's tax is two or three times less than what neighboring states charge and third lowest nationwide, behind only Missouri and Wyoming.
Wisconsin is still home to 66 smaller craft breweries, according to the national Brewers Association. That is 10th highest per capita. Green County is home to Minhas and New Glarus Brewing Company.
Deb Carey, owner of the New Glarus Brewing company, finds the bill targeting small breweries, those producing under 300,000 barrels a year.
Breweries such as Miller Brewing Company in Milwaukee; City Brewing Company in La Cross and Jacob Leinenkugel Brewing Company in Chippewa Falls, will not see the tax hike, she said.
"It gives an unfair competitive advantage to big and out-of-state brewers," she said. "They are taxing exactly the brewers who put up the brick and mortar facilities."
New Glarus Brewing, producing 75,000 barrels last year, paid $150,000 in state beer tax.
Carey said the new tax would push the tax to $750,000 - more than the cost of the new facility built within the past two years and more than she pays in employee health care.
"Don't pretend that doesn't affect my ability to hire people," she said.