Craft Brewers leeched by Oregon Regulators

Why legislators think it is a good idea to put their heels on the neck of the most productive industries is beyond me. Perhaps following the lead of California (in and of itself a good reason to take a closer look at the proposal) Oregon Reps. Ben Cannon and Michael Dembrow, Senators Jackie Dingfelder, Diane Rosenbaum, and William Morrisette are hoping to make budget ends meet by tapping into the profits of local brewers.

“House Bill 2461, would impose a $49.61 tax on each barrel of beer produced by Oregon brewers.” As the headline of the article cites, that would be an increase of about 1,900%!

Oregon is widely renowned as home to some of the United State’s highest quality and most adventurous producers of microbrews—that is beer from craft beer companies, usually a small group of people producing less than 15 thousands barrels a year. The legislators proposing the gargantuan tax increase probably didn’t think about the consequences such a move would ultimately have on the whole state’s economy and the beer industry in Oregon (without question they didn’t give modicum of consideration for the individuals in the industry).

As I posted a few weeks ago, the cost of ingredients are drastically rising and a tax on these companies will hurt more than just the drinkers or producers of such beverages. In this case, the result is likely to be even more extreme because, unlike California, Oregon brewers are not tied to the state by their product. Unlike vineyards, brewers can move and still produce a basically comparable product.

Right now, Oregon has three of the top 21 producing breweries in the states, ( #7 Deschutes, #9 Full Sail , and one of my favorites #21Rogue Ales). Leeching some money from the veins of these larger companies probably won’t kill them (though it definitely will hurt). But for the smaller brewers it very well could be the end. They would have to substantially raise the price of their product, fire workers, cut back on production, or close shop all together.

Right now Oregon has one of the highest concentrations of microbreweries in the country , but that might quickly change with this proposed tax. If legislators are deluded enough to think that the reason there are so many breweries in the state is because of Oregon’s fresh air or wealth of outdoor activities, they are about to get a rude awakening. A more likely reason so many brewers set up shop in the state could be the fact that, of the States, Oregon has the 49th lowest taxes on malt beverages.

With open arms other states should welcome and actively pursue these Oregon-based brewers. Please, bring your talents and innovation to DC where there is currently a proposal to lower the per-barrel tax to $9 . Show legislators that you aren’t their personal keg of money in the basement just waiting to be tapped to make up for their incompetence as legislators. Shrug off these mooches and relocate to places where your achievements are celebrated and respected.