The Barometer Online

Issue date: 5/27/09 Section: News

Media Credit: Barometer Photo File

The beer industry in Oregon is thriving with 96 breweries that contribute to 5,000 jobs, but if Oregon legislators pass House Bill 2461 some of those breweries may not be around much longer.

The proposed HB 2461 would raise the beer excise tax (production tax) in Oregon from its current rate of $2.60 per barrel (one barrel equaling about two kegs) to somewhere around $50 per barrel. The tax would be increased by 1,900 percent in order to raise funds for state drug and alcohol prevention, treatment and recovery services.

If the bill passes, Oregon will become the most taxing state on beer behind Alaska. As of right now Oregon's state tax on beer is less than a penny a glass and among the lowest in the country, which hasn't been raised in 32 years.

Laura Bryngelson from Calapooia Brewing Co. in Albany is very much against the new bill.

"Small breweries like us will most likely end up going out of business," Bryngelson said.

Calapooia Brewing Co. has joined in the efforts that the Oregon Brewers Guild has been actively organizing. "Everyone is getting together to write to their legislator," Bryngelson said. "Right now our monthly privilege tax bill we pay the OLCC is around $280, but if the bill is passed, we will end up paying $3,000 in privilege tax for the same amount of beer."

Oregon is the second largest microbrewery producer in the U.S. behind Colorado. The Oregon beer industry fears what this bill could potentially do to local Oregon businesses that sell or produce beer.

Rob Widmer of Widmer Brewing Co. from Portland said the tax would "devastate breweries in Oregon." Companies like Widmer are taking time to head to Salem and speak with Oregon legislators in hopes to help them understand what is being proposed and the impacts the bill will have.

"Most breweries in the Oregon Brewers Guild are meeting with representatives from where they are from," Widmer said.

Rep. Ben Cannon, D-Portland, the chief sponsor in the House of the bill, said the bill would raise $300 million toward alcohol and drug addiction treatment. The state views the new tax as a way to help pay current funds during the current budget deficit. Most organizations that take action against drug and alcohol abuse, like the Oregon Partnership, are fully supportive of the bill.

Local businesses that sell beer will be feeling the pressure too. "It will change the face of beer on tap if this bill passes," Stephanie Mather, owner of Tom's Peacock Bar and Grill, said. "It will be extremely unfortunate, and for us retailers we will have to react and try to be creative. For a bar with 20 taps it would mean less diversity of beers available to the customers."

Continued...

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