Beer Institute: One Brewery Job Supports 45 More in Other Industries

A new study from the Beer Institute has found that for every one job created by a brewery, an additional 45 jobs are supported in other industries, ranging from agriculture to transportation.

To conduct the analysis, the Beer Institute commissioned the economic research firm John Dunham & Associations to look at the state-by-state excise tax collections on beer and compared those figures with the number of employees in any given business.

“For instance, if you have a tavern that has 20 people employed and half the alcohol excise taxes are related to buying beer, then you can say 10 of those people are employed because of the beer industry,” explained Chris Thorne, vice president of communications at the Beer Institute.

The Beer Institute also looked at all 50 states and assessed how many people were employed throughout a number of related industries including packaging, business services, distributing, transportation, and agriculture to support its findings.

“When you look at the grains to glass jobs chain, these are all the people that are at work,” Thorne told Brewbound. “Literally from farmers to commodity specialists. Then you’ve got distributors, warehouse men, truck drivers, grocery clerks, concession workers, bartenders, you know? There’s a lot of things.”

The numbers are also being read by the institute as an argument in favor of government action, particularly the bipartisan Brewers Excise and Economic Relief (BEER) Act which is currently pending in Congress.

The BEER Act aims to roll back the federal excise tax rate from $18 to $9 for every 31-gallon barrel. Further, for brewers that produce less than 2 million barrels per year, the rate would drop to $3.50 on their first 60,000 barrels. For those brewing less than 15,000 barrels annually, the federal excise tax would be nixed entirely.

“Most consumers are surprised to learn that, on a national average, taxes are the most expensive ingredient in their beer,” added Jim McGreevy, president and CEO of the Beer Institute, in a news release.

A lowered excise tax rate, said Thorne, would provide another boost in economic activity.

“It’s just one additional tax that a lot of businesses don’t have to pay,” he said. If the excise were reduced, then it opens up the opportunities for new initiatives in the marketplace.”

It’s worth noting that many craft brewers are lobbying behind a competing piece of legislation, which is supported by the Brewers Association and would reduce the excise taxes for only small brewers. Short for the Small Brewer Reinvestment and Expanding Workforce Act, the Small BREW Act seeks to cut the excise tax rate on a brewery’s first 60,000 barrels by 50-percent, from $7 to $3.50 per barrel. If passed, the bill would also reduce the excise tax rate from $18 per barrel to $16 barrel for production between 60,001 and 2 million barrels. Breweries that produce less than 6 million barrels would be eligible for the reduced rates.

A separate economic study jointly commissioned by the Beer Institute and National Beer Wholesalers Association in 2012 found that the beer industry employs more than 2 million people, both directly and indirectly. Beer, the study found, contributed $246.6 billion to the nation’s economy, while also generating $49 billion in local, state, and federal taxes.