Testifying before the Maryland House Ways and Means Committee, Jim McGreevy, president/CEO, Beer Institute, said the proposal would result in a loss to the state treasury of $21 million over the next five years.
He challenged the fiscal impact statement published ahead of the hearing that assumed a decrease in revenue from liquor-based cocktails of about 5% a year. This implies, he said, growth of these canned cocktails would be only 5% annual. “This is extremely unlikely to be thecase, as the volume growth we saw in 2021 was 106% nationwide, according to Nielsen. It would be almost unprecedented for the rate to slow to 5% in 2023 from 106% in 2021.”
“Maryland ranks 24th in the country in the number of craft breweries, boasting 121 craft breweries,” McGreevy continued, adding: “Beer distributors, many of them family-owned businesses, are important economic contributors with distribution companies throughout the state. The beer industry accounts for $4.5 billion in economic contributions to the state and creates more than 31,000 jobs for Maryland families. More than $224 million in state and local taxes are generated from the consumption of beer. In addition, another $327 million in business and personal taxes are paid to the state and local communities because of beer.”
He cited beer’s long history of being “recognized as the beverage of moderation” and said that because “beer is fundamentally different from spirits, the tax code properly reflects the distinctions between the two products across the country.
“Beer is significantly lower in alcohol by volume (ABV) than hard liquor, and the aggregate amount of beer sold in the U.S. has an average ABV of 4.62%, while the average ABV of spirits products sold in the U.S. is between 36.9% and 38.3%. Per liter of pure alcohol, beer costs 2.5 times more than hard liquor to produce. Beer also has higher distribution costs than liquor.”
He contrasted the beer industry’s “decades and billions of dollars” spent on responsible drinking campaigns” with the liquor industry’s “millions of dollars pushing a public policy agenda that makes it easier for consumer to access high-risk, high ABV products. The liquor industry’s message to consumers dangerously suggests that all drinks are equal, which does a grave disservice to consumers and flies in the face of public policy.”