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In order to generate funding to address behavioral health issues, like substance abuse prevention and treatment in the state, the Oregon Health Authority has released a budget request that includes a proposal to raise $293 million by increasing the tax on beer, wine, and cider by 800%.
Not staggered, not introduced in stages to ease the blow, but an immediate 800% increase on beer, wine and cider sold in Oregon.
Responding to the proposal Michael LaLonde President and CEO of Bend, Oregon-based Deschutes Brewery penned the following letter that was featured in the Bend Bulletin…
And here are some key excerpts from LaLonde’s thoughtful piece…
When brewpubs, tasting rooms, restaurants and bars were ordered by the state of Oregon to close, overnight our business models were destroyed. Deschutes lost 45% of its business over the course of one week. With restaurants and brewpubs reopening, there are still limitations on seating, meaning margins are thin. We cannot afford a tax increase.
True, the sale of packaged beer through grocery, convenience and drug stores has increased during the pandemic; this increase has not nearly offset the decline in our sales at our pubs and tasting rooms as well as our draft sales to restaurants, pubs and bars . And we are the lucky ones who have the capacity to sell more packaged beer. The vast majority of craft brewers in the state sold only draft beer and those sales were cut by more than half.
Prior to the COVID-19 pandemic, Oregon was home to 400 breweries, which helped create 43,000 good-paying jobs and $2 billion in annual wages for Oregonians. Unfortunately, a recent economic report from the Beer Institute and Brewers Association estimates 25% of those Oregon beer jobs will be lost by the end of 2020 because of the COVID-19 recession. We’re already experiencing it at Deschutes. We employ 325 compared to 500 before the pandemic started.
We know things will only get worse this winter when outdoor seating is no longer an option and restaurants will be forced to reduce capacity. We also want to ensure our businesses survive until we have a vaccine or treatment and things can return to normal.
In order to survive, Oregon’s breweries, wineries, cideries, distilleries, restaurants and bars need the support of our elected officials. We hope Gov. Brown and other lawmakers in Salem realize now is not the time to be raising taxes on our businesses.
Please don’t kick us while we’re down...
As the always excellent Tara Nurin writes in Forbes, Oregon “collects $40 million in taxes from alcohol every two years. That makes it the third largest contributor to the state’s coffers, after taxes and the lottery.”
With breweries already struggling thanks to the impact of COVID-19 the timing of this tax increase couldn’t be worse, or it’s consequences more devastating…And we hope that Oregon’s beer, wine and cider taxation holds steady, at least until COVID-19 becomes a memory and the beer industry has time to recover.
