Those in favor of lowering taxes on RTDs say that it’s unfair to tax a 9% ABV canned cocktail much higher than a 9% ABV beer. “Allowing spirits-based RTDs to be sold at additional retail outlets like grocery and convenience stores will increase consumer convenience and provide additional tax revenue to the state.” “Ready-to-drink cocktails saw a huge increase in 2020 and show no signs of slowing down,” David Wojnar, senior vice president and head of state public policy for DISCUS, said in a statement. States including Nebraska and Michigan both lowered excise taxes on RTD cocktails in May, and in Pennsylvania, legislation has been introduced that would expand RTD cocktail sales beyond state-run liquor stores to bars and restaurants. National beer groups likely see the state as just the latest domino to fall in the campaign to make RTDs more available and more competitively priced. That means beer doesn’t enjoy the “access” advantage that it does in other states, where it’s able to be sold in more stores than spirits-based products. In New Jersey, packaged beer, wine, and liquor are all available only at liquor stores, not grocery or convenience stores. So it’s with a do-or-die mentality that beer is pushing back against SB 3452 in New Jersey. By 2024, beer will likely represent just a third of the U.S. According to data cited by alcohol industry newsletter Retail Untapped, the best-selling canned cocktail brand in the U.S.-which it did not name-increased volume sales nearly 4,000% from 2019 to 2020.Īs RTD sales are ascendant, beer has struggled: For two decades, beer has lost market share to spirits in the U.S. That’s about the same amount that Bud Light and Budweiser sold combined in chain retail outlets tracked by market research firm IRI last year. If hard seltzer is considered an RTD, the category becomes even stronger: According to figures from financial services firm Credit Suisse, seltzer- and spirits-based RTDs are expected to sell roughly 350 million cases (25 million beer barrels) this year. market for premixed cocktails, including RTDs, grew more than 39% in 2020 to $489 million last year, according to the Distilled Spirits Council of the United States (DISCUS), the spirits industry group advocating for lower excise taxes on such products. If these products were taxed like beer and could therefore retail at a price more in line with beer, it would only pour gasoline on the already white-hot RTD cocktail category. Jim McGreevy, CEO of the Beer Institute, which represents the U.S.’s largest beer companies, called lower excise taxes on spirits-based RTDs an “existential threat” to beer. If New Jersey does move to lower excise taxes on spirits-based RTDs, it could signal beer needs to find a new playbook. Whether these arguments successfully block SB 3452 will be a litmus test of the beer industry’s messaging on this issue. In the most recent data available, the NBWA tracked the average ABV of beer sold in the U.S. They argue that beer deserves its lower tax rate because it is generally a lower-ABV beverage and because beer makers typically earn lower margins than spirits producers. The lower tax has two potential consequences: Manufacturers of spirits-based RTDs could either price them lower than they are currently, or make better margins on their sales.īrewbound reports a coalition of large beer companies and industry groups, including the Brewers Association (BA), the Beer Institute (BI), National Beer Wholesalers Association (NBWA), the Brewers Guild of New Jersey, and the Beer Wholesalers’ Association of New Jersey, have all written to lawmakers expressing their opposition. The bill unanimously passed out of the Senate Committee on May 20 and is now in the hands of the Senate Budget and Appropriations Committee. Right now, the state taxes any spirits-based RTD cocktail at the same rate as liquor: $5.50 per gallon. SB 3452 would see New Jersey tax spirits-based RTDs below 9.9% ABV at the same state rate as beer: 12 cents per gallon. Big plays, smart moves, and otherwise curious indicators of beer's possible future. From Barons to Barrels with Captain Pabst.Message in a Bottle with Brewery Ommegang.Beer is Labor with East Brother Beer Co.Let Go or Get Dragged by Jerard Fagerberg.Ferments at Low Temps by Stephanie Byce.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |