Brewnotes

Great post on the HoCo Rising blog.    Sen. Joan Carter Conway’s fundraising reports are dissected and attribution is placed on the portion from the alcohol lobby (at least the ones that can figured out).

Couple this with the informative article from the Washington Post.

“The industry’s network of political action committees, 120,000 employees, and powerful distributors and wholesalers have contributed more than $1.3 million to state lawmakers since 2000, according to campaign finance reports.

They have also spent nearly $900,000 in the past five years to maintain a stable of lobbyists and lawyers in Annapolis whose firms have represented the industry for more than three decades, according to state ethics reports.

General Assembly sessions are kicked off with a roughly $16,000-open-bar reception for lawmakers and their families, and the industry’s wining and dining usually continues, such as with a $2,500 steak dinner Feb. 3 at Lewnes Steakhouse, an Annapolis institution. “

If you are still wondering why the Direct Wine Shipping Bill isn’t going to pass anytime soon, look no further.   

Ben Brouse Beer, Food & Drink, Wine

Delegates Malone & DeBoy,

I would like to understand your position on House Bill 832.   I am concerned that this is an easy target to raise taxes without looking at the source of Maryland’s budget woes.   While I am not opposed to raising taxes, I take great exception to the following passage of the bill:

"Comptroller shall distribute the remaining alcoholic beverage tax revenue to the General Fund of the State".

If this bill was intended to raise funds for health concerns, why would any funds at all make it into the general fund? Beyond this, the rate of increases for the different beverage areas are astronomical.   My intelligence is being mocked when I’m told its $0.10/beer.  In actuality, the percentage increases are obnoxiously and ridiculously high:

MD proposed tax rates ($$/gal):

	beer	1.16  (1,288% increase)
	wine	2.96  (740% increase)
	spirits	10.03 (668% increase)

If the tax increase passes, our state alcohol beverage taxes will be four times the
national average for beer (highest in the nation; 2nd place Alaska at $1.07/gal), over three-and-half times the national average for wine (highest in the nation; 2nd place Alaska at $2.50/gal), and just shy of 50% higher than the national average for spirits (eleventh-highest in the nation; 1st place Washington state at $26.45/gal) [Source: the Jernigan paper referred to in the House bill preamble].  Please take into consideration the true impact of such a bill.  Any way you slice it, this bill is bad fiscal policy and doesn’t solve any aspect of the looming budget crisis.   The only true way to solve the budget crisis is to reduce spending.

Looking forward to your response,

Ben Brouse

Update #1: I added the link to the figures that were cited.

Update #2: Both Delegates responded that they were opposed to this bill.    I will be watching.

Ben Brouse Beer, Food & Drink, Wine

Tom Wark writes the Fermentation blog.   In it, he describes the absolute mockery of testifying before a committee that isn’t going to do anything regardless of the testimony.  Yes, this is how democracy really works in Maryland.  Too bad it was regarding the proposed Direct Wine Shipping bill (HB 716)  that I’ve talked about so much before.  

Ben Brouse Beer, Food & Drink, Wine

Ben Brouse Food & Drink, Wine

Ben Brouse Food & Drink, Wine

Interesting chatter over the last few days about a new alcohol tax bill in Maryland.   Over the past weeks I’ve outlined Maryland’s Wine Siege.    Now this gem.   Deceptively named the “The Lorraine Sheehan Health and Community Services Act of 2010”.     The house bill is here.  The senate version is here.

Synopsis:

Increasing the State tax rates for alcoholic beverages sold in Maryland from $1.50 to $10.03 per gallon for distilled spirits, from 40 cents to $2.96 per gallon for wine, and from 9 cents to $1.16 per gallon for beer; providing for the distribution of the additional revenue to special funds to be used only for the purpose of providing additional funding for specified health services; etc.

Brandon Miller-Millhouse summarized as following:

“A Maryland Brewery" Brews 40 Barrel batches
40 bbl = 1240 gallons presently taxed at $111.60
with bill passed that same single batch would be taxed $1,438

…So lets say a brewery right now sells a gallon of beer for $5 (just an example) this tax makes them to have to raise the price of their product to say $7.50-$8 per gallon. The Distributor has to mark it up to retain their profit margin ($10-$11)and the retailers have to mark it up retain their profit margin ($13-$15) and WE are left paying Stone Six-Pack Prices for everything…oh and I almost forgot the 6% MD sales tax.

BTW – Brandon reads this blog, so if you’d like to leave him feedback, do it here.  I won’t be handing out his email address.

Conclusion

Just another example of how clearly broken Maryland’s three-tier distribution system remains.  I completely understand wanting to raise the taxes to be more in-line with other states, but don’t provide that comparison to me regarding states that don’t have a bogus three-tier distribution system in place.   The reality is, the distributors don’t care because they are going to add their costs on regardless of what this bill does just as Brandon has previously outlined.

Opinions and comments welcome. 

Ben Brouse Beer, Food & Drink, Wine

Ben Brouse Food & Drink, Wine

At what price point does a bottle of wine leave you thinking “Is this really worth it?”  This article on MSNBC is fascinating.   “Napa Valley is facing the worst wine downturn since the early 1980s. Premium wines priced between $50 and $125 were "a dead zone" in 2009”    Not only are the values of the finished product going down but so are the costs of the raw materials.   “Grapes he would have paid $5,000 a ton for in 2008 cost him only $1,000 in 2009”

I know many wine collectors and connoisseurs alike that claim they can taste the difference in a ~ $100 bottle but I’d say that most would fail a blind taste test if it was put together correctly. 

Mitchell Pressman, owner of Chesapeake Wine Company in Baltimore’s Canton neighborhood, describes this very situation.   “The folks at Black Ankle Vineyards (Mt. Airy, Maryland) invited me to a blind tasting on Sunday. The theme was "Crumbling Rock ‘07 vs, The World" – at which they pitted their Bordeaux blend against similarly priced Bordeaux blends from France, California and South Africa. It is the third such event they have staged and it speaks volumes about their goals and aspirations. Oh, by the way, their Crumbling Rock ‘07? It won, with 18 out of 30 first place votes (runner-up wine received 8 first place votes)!”

Moral of this story – There are plenty of really nice bottles to be had in the $20-40 range.   Branch out and be a little more adventurous.  

Ben Brouse Food & Drink, Wine

In this article, MD Senate President Thomas V. Mike Miller cites “institutional inertia” regarding the city of Annapolis’ inability to remove snow.    He also says “This city is stuck in a time warp".  

I read both of these quotes and nearly landed on the floor laughing.   You do understand that institutional inertia is one of the very tactics that he utilizes to govern.    The fact that he won’t allow wine & beer to be shipped to Maryland is not only stuck in a time warp but also draconian and neo-prohibitionist.    Not allowing the bill to get out of committee when 106 out of 188 legislators support the bill is institutional inertia.

This article depicts the liquor lobby’s stranglehold on our elected officials:  “But Maryland’s liquor wholesalers won’t give an inch. Until now, neither have their (handsomely rewarded) champions in the legislature. “

Mr. Miller should begin choosing his words a little more wisely as he has become a hypocrite to cite institutional inertia as it is a tactic for which he is very familiar.

Please support Marylanders for Better Beer & Wine Laws.   They have an on-line petition that I urge you to sign.    Yes – Maryland’s Wine Siege Continues.

Ben Brouse Beer, Food & Drink, Wine

Background:  I’ve talked about this stupidity before:

• Maryland Direct Wine Shipment
• Maryland’s Arcane Liquor Laws

Looks like the bill is held up again according to this story.   A Senator, Joan Carter Conway, chairwoman of the Education, Health & Environmental Affairs Committee won’t allow a vote even though 6 of 9 sitting on that board are co-signers of the bill. 

Carter Conway says “Her chief concern, she said, is that underage drinkers will tap the Internet for wine. There’s no way, she said, to force delivery agencies, whether the U.S. Postal Service or a private carrier, to verify the age of the person accepting a package.”   With all due respect, when is the last time a bunch of underage kids wanted fine wine?   I’m guessing she never attended college with a statement like that.

“Conway said her concerns are shared by Senate leadership. Senate President Thomas V. Mike Miller, a Prince George’s County Democrat, has not traditionally supported the direct-shipping bill, either.”    Hmmm, think about it.   Miller’s family OWNS A LIQUOR STORE!   Why do you think he is against the bill?    

Maybe she is concerned because she is a little too close to the issue.  “Her husband, Vernon "Tim" Conway, is a city liquor inspector since 1995 who made $67,000 in his position last year, according to city records.”

In 1933, Prohibition was repealed, unless of course you live in Maryland and enjoy fine wine.

Ben Brouse Food & Drink, Wine