by Bea Peterson
On Tuesday, February 22, U.S. Senator Charles E. Schumer visited Brown’s Brewery in Troy to announce his support of a bill to reduce by fifty percent the excise tax charged small breweries. For Brown’s Brewery owners and Hoosick residents Garry and Kelly Brown, such a tax reduction couldn’t come at a better time. After almost four years, they finally have all the federal and state permits they need to expand their beer brewing into the former Flowmatic Valve building on the Walloomsac River in North Hoosick.
In 1993 the Browns opened the first brewpub in the Capital Region. They purchased three vacant and dilapidated buildings in Troy and renovated them into what is now Brown’s Brewing Company.
It is a full service restaurant, bar and micro-brewery. Gregg Stacy, the Brewery’s marketing and sales director notes that it has grown into one of the busiest restaurants in the Capital Region, and its creation was instrumental to the revitalization of blighted downtown Troy’s historic waterfront. “Troy is now home to a vibrant restaurant and entertainment corridor,” he said. Brown’s currently employs about 100 people and continues to grow despite the tough economic landscape. “Brown’s has demonstrated continued annual restaurant sales growth, and continued wholesale beer business growth, producing approximately 3,500 US barrels of beer in 2010,” Stacy said.
Move To Wholesale
Brown’s Brewing began wholesaling bottled beer for retail grocery and beverage center distribution in 2007. It was the beginning of Brown’s transformation into a full scale craft brewery. Brown’s beer is currently available in 20 Hannaford Supermarkets, seven Price Chopper Stores, Capital District area Beverage Centers, Thruway Beverage in Greenwich, the Eagle Bridge Inn, the Fire House Restaurant, Man Of Kent and the Cambridge Hotel. Garry Brown said they are holding off expanding into Vermont, Massachusetts and the New York City area until the new brewery is up and running.
Expansion
Work to turn the well built old factory in North Hoosick into a brewery will begin in the spring. Installation of the vats and assembly of all the equipment will take place through the summer. Brown anticipates brewing will begin in the fall. He expects to produce 15,000 barrels this year and increase production by 20,000 barrels a year until capacity is reached at 60,000 barrels.
The plan for 2012 is to open the plant to the public for tours, with a tasting room, showroom and retail space. The eventual goal is to hold special events at the Hoosick site.
Community Support
Hoosick residents have long been familiar with Brown’s beer. The Browns make it available on tap at almost every fund raising event in the community where alcohol is sold.
Home Grown
The Browns have been growing hops on their property in West Hoosick for four years. The staked hops grow over 20 feet tall. “Last year we grew enough for two batches of beer,” he said. They intend to grow hops in North Hoosick as well. In an effort to be more “green,” what is left from the beer making process is used locally as animal feed.
Excise Tax Bill’s Potential
The 65 small brewing operations throughout NYS employ nearly 60,000 people. The twenty-seven Senators supporting the reduced excise tax bill believe such a reduction would allow these businesses to expand and to hire more employees. According to a Schumer release, “Currently, brewers pay a seven dollar excise tax for the first 60,000 barrels they brew per year. Under the BEER Act that Schumer will introduce, that rate is slashed to $3.50 per barrel, resulting in potential savings of $210,000 per year for the brewer. The bill also cuts the tax by $2 on the next 1,940,000 barrels produced, resulting in potential savings of $3,880,000 each year. This totals over $4 million in potential savings for these brewers. Allowing small breweries to reinvest in their companies is good for the surrounding communities, as many build state of the art structures or renovate existing buildings, preventing blight and creating good-paying jobs.”
“Small breweries throughout Upstate New York not only brew great beer, they also create great jobs,” Schumer said. “By cutting taxes for these small businesses, we can help grow the economy and put more New Yorkers back to work in stable, good paying jobs. Breweries are the crown jewels of so many of our communities, and many of them have renovated charming old warehouses in downtowns across the state. Putting more money back into these businesses will be good for economic development, good for jobs and good for New York.”
Any brewery that produces fewer than 6 million barrels of beer per year is eligible for the tax cut. That will allow brewers to reinvest in workers, new equipment and new space as they expand their business. According to the Brewers Association, this tax cut would have saved small brewing companies over $13 million nationwide in 2008. Microbreweries would have saved nearly $3 million, and brewpubs would have saved nearly $2 million just on the initial 60,000 barrel tax cut for that same year. When the tax break for the additional 1,940,000 barrels is factored in, small breweries throughout the country would have saved over $26 million in 2008, on top of the tax savings from the first 60,000 barrels produced. That represents nearly $40 million dollars in tax savings for an industry that employs New Yorkers throughout the state.
The legislation was introduced last Congress by Senator John Kerry (D-MA), and earned 27 co-sponsors and broad bipartisan support.
The approximately 650 small breweries across the country combine to employ nearly 100,000 American workers. In New York, the beer industry directly supports approximately 8,000 jobs through brewing and distribution and nearly 60,000 jobs overall when retail sales are factored in. These jobs paid nearly $1.7 billion in wages in 2008 and accounted for almost $5 billion in economic activity.
A Harvard study of the proposal predicts that passage of the proposal would increase economic activity in the small brewery sector by over $115 million in the first year and by over $733 million over the first five years. Every dollar saved by cutting the excise tax would result in nearly $11 in economic activity, providing an immediate and substantial boost to the economy. According to the study, the proposal would generate over 2,700 new jobs in the first year and an additional 375 jobs per year for the next four years.