The first goal of incoming Beer Institute (BI) chairman Anheuser-Busch CEO and North American zone president Brendan Whitworth is to continue delineating the differences between beer and hard liquor.
In his address to the annual meeting of the trade group representing the country’s largest brewers, Whitworth highlighted three goals for his term leading the BI board of directors.
First, the BI “must continue to educate policymakers about the differences between beer and hard liquor.” This includes spreading the word about the beer industry’s “commitment to responsibility and the provision of low- and no-alcohol products.”
“Now is the time for the Beer Institute, along with its other industry partners, to get together and lead the effort to ensure that hard liquor is regulated and taxed appropriately at the federal level and at each and every individual state level,” Whitworth said.
This goal comes as spirits have steadily stolen share from beer for decades – accelerated in recent years with the rise of spirits-based, ready-to-drink (RTD) canned cocktails – and as the Distilled Spirits Council of the United States (DISCUS) works toward its own stated goal to expand market access and attain tax equivalence for RTDs at the state level.
At the federal level, Whitworth urged the BI to continue its advocacy efforts to repeal aluminum and other tariffs and trade restrictions, which “can stifle domestic investment and job creation.”
“We’ve made some progress in the area in the last few years. But it still remains a massive topic and eliminating unfair and discriminatory taxes on aluminum must be a top priority in Washington,” he said.
Since 2018, U.S. beer producers have spent “well over” $1 billion on aluminum tariffs, Molson Coors CEO and outgoing BI chairman Gavin Hattersley told members yesterday. Those tariffs have come “instead of investing that money in our businesses, instead of investing that money in our people, and instead of investing that money in our future,” he said.
“Worst of all, in 2021, less than 3% of that money landed with the Department of Treasury,” Hattersley added.
Aluminum tariffs and pricing policy must remain “a top priority in Washington,” Whitworth said.
The third goal for Whitworth’s tenure is to maintain the beer industry’s “vibrant, competitive environment.”
“That includes working with policymakers to ensure they understand the realities of our industry and the dizzying number of choices that consumers have available to them,” he said.
This goal comes eight months after the U.S. Treasury Department’s release of a 64-page report on competition in the beer, wine and spirits industries, following an executive order from President Joe Biden. At the time, former BI president and CEO Jim McGreevy said the Biden Administration had engaged in “mischaracterization of the thriving American beer industry.”
“Despite being one of the most regulated industries in the United States, the beer industry is experiencing an unprecedented level of healthy competition,” McGreevy said at the time. “It will continue to grow and innovate so it can best serve the millions of Americans who make beer America’s favorite beverage alcohol.”
New BI President: Alignment Needed to Fend Off ‘Existential Threats’ to the Industry
Incoming Beer Institute president and CEO Brin Crawford stressed the importance of the trade group’s members banding together to fend off the “existential threats” facing the beer industry.
In introducing Crawford, Molson Coors CEO Gavin Hattersley highlighted Crawford’s experience leading government affairs for the American Hotel and Lodging Association (AHLA) and helping that industry survive the COVID-19 pandemic.
“He worked on behalf of an industry that experienced a massive threat over the past two years just as we do,” Hattersley said. “And this gives him a unique insight into our next chapter and positions him really well to lead our organization into the future.”
Crawford noted that no industry was impacted more than the hotel industry by the COVID-19 pandemic.
“That’s where my former association really sprung into action in providing the leadership that the industry needed in its most difficult time, and I believe that that is the role that the BI can play in partnership with certainly the National Beer Wholesalers Association and the Brewers Association.”
Crawford said he has met with both BA president and CEO Bob Pease and NBWA president and CEO Craig Purser.
“I’m really looking forward to learning from them and learning more about the industry,” he said.
The stakeholders from the four largest beer manufacturers in the U.S. — Hattersley, Whitworth, Constellation Brands Beer Division president Jim Sabia and Heineken USA CEO Maggie Timoney — were unanimous in their support of Crawford to succeed former president and CEO Jim McGreevy, Hattersley shared. McGreevy exited the job after nearly eight years to take a role in government affairs for Coca-Cola.
For his part, Crawford said his conversations with the BI’s stakeholders centered around “the need for alignment and for us to come together and tackle the existential threats that face the beer industry.”
“I look forward to working on those issues with not only the BI team, the incumbent team, but all of you in this room,” he said. “I have a lot to learn. But I commit to you that I’ll give great effort.”
Federal Tax Equalization Bills Not Expected Until 2023
Beer Institute senior director of federal affairs Annie Lange said she doesn’t believe the spirits industry has “had much luck finding a champion” for federal tax parity due to the lack of legislation in Congress.
“Without a champion, you don’t have a position,” Lange said.
After hearing about DISCUS’ federal motivations, the BI, Brewers Association, National Beer Wholesalers Association and the wine industry trade group mobilized “to start meeting with our friendlies on the hill, the tax writing committees and leadership,” to establish their opposition.
“I don’t think there’s a lot of time left to get something passed in the year-end package,” Lange said.
Nevertheless, Lange said “never say never, especially before an election.”
“We’ve done a very good job at talking to people who matter in Congress on this issue, and they understand exactly what we are,” she said.
Most likely, Lange said, the federal tax equalization effort will be “something we’re going to be looking at in the 118th Congress.”