Politics bubble up
"We are members of the California Small Brewers Association and have a lot of contact with people who are working to change not only California law, but federal law to make a better business environment for craft brewing," Manley says. "There are a lot of small things like municipal nickel-a-drink taxes that can affect the beer industry as a whole and add dollars to the price of a six pack."
After facing a flurry of legislation aimed squarely at their businesses, craft brewers have determined it's in their best interest to protect their special interest. In Massachusetts, Boston Beer joined smaller brewers including Ipswich-based Ipswich Brewing, Southampton's Opa-Opa and the rest of the Massachusetts Brewer's Guild in a bid to let small brewers switch wholesalers to better promote their beer -- amending a law on the books since 1971, when the state had only one local brewery, compared with the 40 it has today. That same guild was influential in getting Sens. John Kerry, D-Mass., and Mike Crapo, R-Idaho, to craft legislation that, if enacted, would reduce excise tax rates on brewers producing 6 million barrels or less.
The House has offered up a similar bill, with the California Small Brewers Association and the Brewers of Pennsylvania's influence evident from the inclusion of co-signers including Reps. Jim Gerlach, R-Pa., and Duncan Hunter, R-Calif. Bill Covaleski, co-founder and co-president of Downingtown, Pa.-based Victory Brewing and president of the Brewers of Pennsylvania, has spent the past 15 years growing his brewery from a small operation trying to sell itself out of a brewpub to one that increased its maximum capacity to 100,000 barrels just last year. That has given him a lot more interest in legislation that affects not only him and his fellow craft brewers, but the 185 employees dependent on their jobs at his brewery.
"We're kind of in a bright, shining moment because we're a locally based, American manufacturer with jobs, so we're a lot better able to get the attention of legislators than we were a few years ago," Covaleski says. "Conditions are still pretty good for brewers to be respected as employers."The new economy
It's also making disparate brewers more respected as colleagues. Yuengling's Casinelli remembers his brand being "ostracized" from craft beer events such as Philly Beer Week as craft brewers formed their own subculture and looked at Yuengling "like we were Anheuser-Busch, Miller or Coors." Because many craft brewers went into business at the same time and, as Covaleski says, "we envied the big guys to some extent because of what they had accomplished and they just sort of mocked us because we were never going to amount to anything," there was a greater sense of kinship among the newcomers. "We helped one another when somebody's yeast died, we sold used equipment to one another, we transferred each other's beer to beer festivals and helped each other out at beer festivals, so it was like a bunch of kids who grew up together and were just happy to do what they did, which is make beer," Covaleski says. "I think the camaraderie on the craft level cause the large brewers to take a different look at how they might play with their brethren." In reality, mutual interests helped bring regional brewers into the craft fold and created an alliance where Covaleski says there were once two noncommunicative sides "from seemingly different worlds." Two years ago, a bill moving through the Pennsylvania legislature that threatened to take away small brewers' right to self-distribution helped bring those two sides together. "In December 2009, I got a call from Dave Casinelli, who I never spoke with before, and he left a message saying 'I have something I think you may or may not know about that I'd like to share with you, give me a call,'" Covaleski says. "It was this House Bill 291 here in Pennsylvania that I hadn't been paying attention to at all, and he was reaching down to say 'I don't know if you read this, but it could be significant to you.'"
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV