All but 10% of our total beer produced is sold in Washington. We are proud of this fact. Years ago a friend of mine at Bozeman Brewing told me “take care of your local market, if you let that go, you will likely fail”. I took that to heart and we have attempted to carefully expand our coverage in a way that would allow us to always maintain what we have established.
Who knew that a politician could make that a foolish endeavor with the stroke of a pen?
Allow me to explain; hopefully you are aware of the Governor’s tax proposal. http://www.ofm.wa.gov/budget13inslee/revenue.pdf Under his proposal, Washington would have one of the highest beer barrelage taxes in the nation. For a small brewery such as Iron Horse or the other 250 or so other Washington breweries that are smaller than we are, this poses a competitive handicap. Nearly all of our beer will be sold into the heavily taxed Washington territory. We have no ability to cost average across territories which have lower taxes.
Do you know who does?
A bunch of much larger out of state breweries from states with much lower tax rates (such as Colorado, California and Oregon) that sell in a dozen western states. Specifically: Deschutes (33X Larger than Iron Horse), Widmer (33X, or more, larger) Ninkasi (16X), Sierra Nevada (116X), New Belgium (100X) Lagunitas (28X larger, and whom I have a man-crush on).
For those of you who think I am just whining, I would encourage you to consider why we would want to give the opportunity to out of state breweries to benefit from a cost advantage allowing them to undercut Washington brewers prices. I am not saying they will, but they certainly could and a few of them are ambitious enough that I believe they would consider it.
For those of you who say “free market!” or “you don’t deserve to be around if you can’t make it”, I encourage you to consider the value and diversity that all these small Washington breweries bring to their communities.
The question that keeps spinning around in my mind is this: Why would would any state NOT go to the extra effort to support businesses formed IN their state where those business primarily sell goods IN that State, and whose success leads to more jobs, more revenue and a better culture and economy? Governor Inslee’s beer tax proposal is the antithesis of this.
If you agree that this is an ill-conceived tax, I plead with you to contact your legislator http://app.leg.wa.gov/DistrictFinder/. and tell them we will throw them out of office next election cycle if they support this tax.
If you disagree with me and I have been unable to convince you, I kindly request that you shut your mouth.
hugs and kisses
p.s. I love paying taxes; ask anyone that knows me, taxes are the price of civilization, but a 328% increase to one industry is too much, even for me, who loves to ‘make it rain’ on tax day.
p.p.s. my favorite phrase right now is ‘make it rain’ so i had to figure out a way to fit that in.