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Iron Horse Brewery in Ellensburg, WA
3 Comments

The Competitive Disadvantage

Greg Parker
POSTED BY
Greg Parker April 10th 2013

F*%!in’ Taxes.

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

Greg

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.

Some other good reads
http://www.washingtonbeerblog.com/
http://www.washingtonbrewersguild.org/
http://seattletimes.com/

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3 Responses

  1. Rob Lowry says:

    Along with the URLs you pushed above, concerned folks can head to:
    http://endthebeertaxnow.com/

    Here they can enter in their information and send pre-written letter to Gov.Inslee AND all of their Representatives, as determined by their address. Simple, fast, efficient and a great way to get the message delivered.

    Thought I would just share that URL to help folks out. The more that use it, or contact their reps through ANY means possible, the better. Hell, if I had a favorite watering hole with WiFi, I’d consider dragging my laptop there and letting everyone use it to send the message.

  2. Pete says:

    As a nano-brewery operator in Ballard, 100% of my output is sold to the local market. Specifically, the people who live on or travel to 49th st. across from Central Welding.

    I’d love to be big enough to think about revenue in terms of bbls, but I’m so small I have to think pints. How many pints do I have to sell to break even on this grain bill? To pay the rent? How many pints out of a keg do I need to sell just to pay the taxes on that keg? I filled a 1/6th keg today and thought, “that kegs for Olympia”.

    I agree with you, I want to pay taxes. Paying taxes means you actually made some sales. Not paying taxes means you are out of business. Also, I live in this state, and I want effective and well funded government to provide valuable services.

    But I can’t help but feeling like this is a selective sin tax. Why beer and not wine or spirits? Because beer is a stupid drink for stupid people. So it costs you 5 extra cents to fill your funnel/beer bong. Suck it up troglodytes. It’s the old class warfare written in spilled beer.

    Ok well…rant over.

  3. Tyler Sharp says:

    So I just finished sending a letter to our representatives on this and we shall see is such a thing is fruitful.

    For those reading, there are apparently only three days left to drop them a message. I will thank Rob Lowry for providing a link to such a method and welcome any of the other hypothetical 2.5 readers to use it presently.

    THAT said, and the depressing mess of things out of the way: I would note my continued appreciation for your usage of colloquy.

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Washington State Brewery, Iron Horse Brewery is the best local craft brewery located in Ellensburg, WA with Iron Horse Brewery beer being served in Seattle, Kirkland, Bellevue, Tacoma, Redmond, Spokane, Yakima, Richland, Moses Lake, Ephrata, and more Washington State cities.

As a local craft brewery, iron horse brewery believes that good tasting beer, such as, Quilters Irish Death, Mocha Death, Malt Bomb, 509 Style, Loco Imperial Red, Light Rale Ale, Cozy Sweater, High Five Hefe and our latest Black IPA should be served throughout the pacific northwest. It can supplement meals too.