Two big beer bills have been floating around Congress for some time now, focused on America’s beer excise tax laws. These beer taxes for brewers (determined on production numbers) have not been adjusted since 1991, and a lot of folks want that changed, but not necessarily in the same way. For a big dog like Anheuser-Busch InBev (AB InBev), the results of these excise tax bills might be the difference between hundreds of millions of dollars, at least according to this excellent article on The Motley Fool.
News outlets have been quick to point out that lobbying in Washington has trended down in recent years. Someone forgot to clue in beer giant Anheuser-Busch InBev (NYSE: BUD ) on that, however, as the beer behemoth is spending more money lobbying politicians than ever before, plunking down $4.3 million in 2013. In contrast, MillerCoors (the SABMiller and MolsonCoors joint venture) forked over $2 million, while Sam Adams manufacturer Boston Beer spent a measly $130,000 on lobbying in 2013.
The article notes that AB InBev is spending the majority of that $4.3 million lobbying Congress about the two bills mentioned above. AB InBev is an especially big proponent of the Brewers Excise and Economic Relief Act of 2013 (BEER Act), which would reduce the federal excise tax on beer for “all brewers and beer importers.” This legislation is foiled by the Small Brewer Reinvestment and Expanding Workforce Act of 2013 (Small BREW Act), which is supported by the Brewers Association, which supports craft and small-scale breweries around the United States. What’s the difference? Why, taxes of course. Learn about both here.
While the article doesn’t note whether AB InBev is lobbying for or against each bill, it does suggest that neither has very much chance of being passed.
According to the website govtrack.us, the BEER Act and the Small BREW Act have approximately a 0 percent chance and a 2 percent chance, respectively, of being enacted by Congress.
Then why lobby? Well, the huge payoff for AB InBev is apparently worth the gamble.
According to its full-year results released on Wednesday, Anheuser-Busch produced roughly 104 million barrels of beer in North America last year. Even if you graciously grant Canada 25 percent of that volume, you’re talking about paying well in excess of $1 billion a year in federal excise taxes at the current rate. If passed, the BEER Act would cut that number in half, resulting in hundreds of millions of dollars in savings, which, again, is a substantial return on a $4.3 million lobbying investment.