The Beer Institute (BI) continued to urge President Joe Biden’s administration to lift Section 232 aluminum tariffs, in a statement released Monday.
The statement was written in response to comments by U.S. Secretary of Commerce Gina Raimondo in an interview with CNN’s Jake Tapper. During the eight-minute interview, Raimondo was asked if the Biden Administration would consider lifting tariffs such as those on steel and aluminum, implemented by former President Donald Trump, to help with continued inflation.
Raimondo entertained the idea of lifting tariffs on items such as household goods, but said the administration will likely keep Section 232 steel and aluminum tariffs “because we need to protect American workers.”
However, Raimondo noted that “President Biden gets up every day, goes to bed every night, thinking about what can we do to get a lid on inflation, and anyone who brings him a good idea that he thinks will help American families, he’s open to doing it.”
Section 232 of the Trade Expansion Act, imposed by Trump in 2018, set several tariffs, including a 10% tariff on imported aluminum. Although President Biden has since removed nearly half the imports listed in Section 232, replacing tariffs on European and Japanese steel with a tariff rate quota system, he has not made any changes to the aluminum tariff.
“We are disappointed the administration continues to overlook the harmful impact of the Section 232 aluminum tariffs on American families and consumers, and especially American brewers,” Alex Davidson, BI director of public affairs, said in a press release. “We agree with U.S. Commerce Secretary Gina Raimondo that tariff relief results in inflation relief, which is why we urge the administration to lift the Section 232 tariffs and provide critical relief to American workers and domestic job creators.”
The U.S. beverage industry has paid $1.4 billion in Section 232 aluminum tariffs since their implementation, but the majority of that money (92%) has gone to U.S. and Canadian rolling mills and smelters, rather than the U.S. Treasury, according to the BI.
BI Urges Lawmakers to Fight Lower Spirits Tax, Hours Before Vermont Legislation Signed into Law
The BI released a blog post Monday urging state lawmakers to “stand up” against “pro-liquor” tax bills.
The BI had prioritized the fight this year against efforts by spirits companies and lobbyists, who have attempted to lower state excise tax for spirits-based ready-to-drink canned cocktails (RTDs) which have a similar ABV to beer and other flavored-malt-beverages (FMBs).
So far in 2022, related bills have failed in Alabama, Arizona, Hawaii, Kentucky, Maryland, Washington and West Virginia. “Several other states” also chose to “let the clock run out on similar proposals” according to the BI.
“It’s a strong message from state legislators nationwide: proposals to reduce taxes on liquor products are a bad idea,” the BI wrote. “Local beer businesses are too valuable to local economies to hurt them just to increase out-of-state liquor company profits.”
The BI also noted that liquor lobbyists’ argument that reducing RTD taxes “will lower prices for consumers,” may be flawed. In Nebraska and Michigan – two states that have passed legislation – the price of spirits-based RTDs have increased +2.3% and +2.1%, respectively, in IRI-tracked off-premise retailers during the 12-week period ending February 20. During that same period, the price of spirits-based RTDs nationwide declined -1.3% in tracked channels.
“These two states will realize less tax revenue as the citizens in those states pay more,” the BI wrote.
“Let’s bring this debate to an end: tax cuts for spirits are entirely unnecessary, do nothing for consumers and hurt local beer business,” the trade group continued. “Local beer businesses bring significant economic value to communities across the country. There is no good reason to increase liquor profits and threaten millions of good local beer jobs.”
Just over 24 hours after the BI’s post, Vermont Gov. Phil Scott signed H.B. 730, reducing the tax rate for spirits-based RTDs from $7.68/gallon to $1.10/gallon and expanding where said items can be sold from 81 state-operated stores, to more than 1,000 retail outlets, effective July 1.
“With this new law, Vermont consumers will be able to visit beer and wine retailers to get their favorite ready-to-drink cocktails, and distillers will no longer be burdened with such an excessive tax rate,” Jay Hibbard, senior VP of state government relations at the Distilled Spirits Council of the United States (DISCUS), said in a press release. “States across the nation are looking at ways to create a more level playing field for spirits-based ready-to-drink products, and Vermont is now one of the leaders in that area. Treating products with the same or similar alcohol-by-volume fairly just makes sense, and this measure increases consumer convenience while supporting local businesses.”
BI Launches Digital Platform to Encourage Sharing of Beer Stories
The BI has launched “Building Bridges with Beer,” a new online platform for “beer lovers across the country” to read, watch and share “beer-related memories, stories and experiences,” according to a press release.
Launched in time for the 160th anniversary of the founding of the U.S. Brewers’ Association (now the BI), the platform invites participants to share 15-60 second videos, or still images with a two-to-three sentence description, detailing their favorite beer stories.
Stories can be read, watched and submitted here: https://buildingbeerbridges.com