The ongoing impact of the coronavirus on the brewing industry has been brutal. And a just released report projects that things are only going to get worse…
Here’s the deal…
On September 22, the Beer Institute, the Brewers Association, the National Beer Wholesalers Association and the American Beverage Licensees released a report they commissioned that quantified the economic cost of the pandemic on the beer industry and the businesses that supports it.
Conducted by John Dunham and Associates, the COVID-19 impact study looked at the change in sales, employment, wages, output, and tax collections for on and off-premises beer retailers, beer distributors, as well as for the industries directly and indirectly affected by them.
And based on three years-worth of data taken from the Alcohol and Tobacco Tax and Trade Bureau the study projects that 651,000 jobs supported by the U.S. beer industry will be lost by the end of the year.
These job losses include more than 3,600 brewing jobs, 1,800 distributing jobs and 400,000 retail-related jobs.
And given the dour predictions the beer trade organizations are calling are calling on Congress to take immediate legislative action.
“The beer industry has seen a dramatic decline both in sales and jobs that rely on our nation’s most popular alcohol beverage,” said Jim McGreevy, president and CEO of the Beer Institute….
“Members of Congress should pass legislation to ensure our nation’s beer industry does not face a $154 million annual tax increase next year, and state legislatures should not raise taxes on the beer industry to resolve budget shortfalls. These tax increases will only result in additional job losses for our nation’s brewers and beer importers and the millions of American’s whose livelihood depends on them.”
The report also forecasts that the COVID-19 pandemic will result in retail beer sales declining by more than $22 billion.
“Small and independent craft brewers, brewpubs, and tap rooms are vital contributors to their communities, and they directly employ more than 160,000 workers,” said Bob Pease, president and CEO of the Brewers Association….
“Right now, these small businesses are struggling under severe financial and operational limitations to make payroll, continue production and serve their customers. Making a bad situation worse, these businesses face a second looming crisis: an increase to their federal excise taxes in 2021 – less than four months from now!”
“The abrupt, forced shutdown of bars, restaurants, hotels, arenas and more during the busy spring season left at least $1 billion of perishable draft beer stranded in the marketplace and unable to be sold. ,” said Craig Purser, president and CEO of the National Beer Wholesalers Association.
If Congress doesn’t enact the Craft Beverage Modernization and Tax Reform Act (H.R. 1175/S. 362), businesses that are already struggling will face higher federal excise taxes, causing some businesses to close their doors permanently and threatening tens of thousands of jobs.”
Bottom line…If Congress doesn’t act in the next four months the beer biz as we’ve come to know it, and the hundreds of thousands of jobs it supports, will not survive…