Aug 112015

total employmentLong before the state of Oregon became famous for its craft beer, the state was known for being one of the first to put in place a container deposit.  During the 1980s, container deposit laws and recycling were top of the list of most conversations in Washington and state capitals.

Because I was the General Manager of one of the state’s largest beer distributors, I became involved in the political environment with the state association.   The creation of the state deposit law created a company, CRINC, which was owned by the beer distributors. CRINC was the state’s for-profit entity arm for deposit collection and recycling and was considered successful.

The national movement to create a deposit law, which Oregon supported, gained momentum during these years.  The Oregon beer wholesalers, led by the state association director, Paul Romain, went to Washington to lobby. Their focus was on consistent deposit legislation.  Ron Wyden, now a US Senator, was in the House of Representatives.  As we all know until this point, no federal law had been passed for container deposits.

Beer wholesalers have a long history of political activity.  If it were not for the U.S. brewing industry, led than by AB, the repeal of prohibition might not have happened during the early 1930s.  Wholesales convinced the federal government that thousands of jobs would be created and that the tax revenue would help during the depression era, thus convincing Congress to repel the 18th amendment.

Wholesalers also have a successful history of ensuring favorable legislation is passed on a state level. The franchise protection and cash laws are examples of such success.  It would be fair to say that almost every wholesaler has, in one way or another, supported local politicians through financial means or even by providing free beer for the politician’s rally.

The Beer Institute reports that the industry-supported Craft Modernization Act has 11 co-sponsors in the US Senate along with 73 co-sponsors in the House of Representatives.  Perhaps this act will actually pass, but only time will tell.

“I will likely be the last American owner of the Boston Beer Company,” said company founder Jim Koch at a Senate hearing last week.  In the WSJ editorial on August 5th, the publication states, “The man behind Sam Adams wasn’t saying that the foreign owners who now control nearly 90% of the U.S. beer production are better at running breweries.  Rather, they have an unfair tax advantage.” Koch goes on the state that “The Boston Beer Company is worth 16% more to a foreign owner simply because of the current U.S. corporate tax structure.”

Jim’s comments helped provide focus, not only to the brewing industry, but to the entire U.S. corporate structure.   The WSJ’s final commentary says it best, “The ultimate losers in all of this aren’t so much the owners, but it is the American workers who often lose their jobs when a company moves abroad.  Sometimes layoffs are necessary, no matter who is in charge.  But job losses are greater when the company is run, not by the most competent manager, but by the one most able to exploit a government-created advantage.  It’s well past time for our government to stop creating advantages for foreign competitors.”

Ask all the beer people who have lost jobs to foreign ownership over the last 10 years: In politics, stupidity is not a handicap.



 Posted by at 6:00 am

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