Earlier this month, the annual craft brewing industry hill climb went online to practice advocacy at a safe social distance. More than 120 small and independent craft brewers and state brewers guilds from 47 states participated in the virtual hill climb, meeting with members of Congress and staff to advocate on issues ranging from the impact of coronavirus to federal excise taxes.
Participants shared stories about the impact the coronavirus has had on their breweries and the industry as a whole. Small and independent breweries have been hit hard by the pandemic; in a recent survey of Brewers Association members, breweries on average have seen a 43% loss in revenue with some of the smallest breweries experiencing even larger losses. They also shared stories of innovation, highlighting how the industry pivoted to curbside pickup and to-go sales, while also taking steps to keep their customers and employees safe.
The event was held at a busy time in Washington, D.C., with congress beginning work on their next coronavirus relief (or stimulus) package. Breweries were one of the many small businesses that needed the assistance provided in the CARES Act. The Small Business Administration’s records on Payroll Protection Program (PPP) loans showed that more than 75% of production breweries received the PPP loans between April and July of this year. Participants asked Congress to include additional support for breweries in the next bill to help them continue on the road to recovery:
- The Craft Beverage Modernization and Tax Reform Act (CBMTRA): Enacting a permanent extension of the CBMTRA, an issue seen as critical to the recovery of the industry. Encouraging congress to support passage of the popular bipartisan bill (which has bipartisan support from 74 senators and 347 representatives) and making the current FET rates permanent, before the savings sunset in December would provide certainty to the more than 8,300 small and independent breweries across the U.S at a critical time.
- Payroll Protection Program (PPP): Replenish and expand the uses of PPP funds, and who can have access to the funds. Allow past borrowers to apply for a second loan and allow 501(c)6’s, like state brewers guilds to apply for the loans. Ensure loan forgiveness for the smallest businesses who acted in good faith to comply with current PPP guidance, and expand the use of funds to cover reopening costs to support employee and customer health and safety. Congress should also make PPP loans tax-deductible to eliminate additional tax liability.
- Provide a tax credit for Perishable Goods: Support a credit for businesses like breweries that have seen losses due to out of code and perishable goods. Thousands of kegs of beer in the marketplace have expired due to brewery, restaurant, bars, and entertainment venue closures. Breweries that buyback their out of code product for disposal will experience an extraordinary business loss.
Participants also successfully advocated for specific inclusion of the brewing industry in the House and Senate RESTAURANTS Acts, which would create a revitalization fund for eligible food and drinking establishments to keep workers employed, maintain operations, and meet financial obligations.
As Congress works on the next large legislative package, the Brewers Association staff continue to advocate for the inclusion of the above items. Many states are experiencing a second round of shutdowns and small and independent breweries are not out of the woods. We remain committed to working at the state and federal levels for the relief needed to help the brewery industry survive and thrive.