Financial ruin could be brewing for U.S. craft breweries

Washington-DC

WASHINGTON, D.C. (Nexstar) — Craft breweries around America were going gangbusters — until the pandemic hit.

Now, these small businesses are struggling to stay afloat.

The Brewers Association predicts almost half of their craft breweries will be forced to close because of coronavirus lockdowns.

Bob Pease, CEO of the Brewers Association, says many of the 8,000 small and independent craft breweries in the U.S. quickly shifted their businesses models to delivery and to-go sales.

β€œThey went from 60 miles an hour to zero. Like that overnight,” says Pease. β€œFor those businesses, it hasn’t been devastation, but it has been close.”

On top of that, breweries are facing another uncertainty with tax breaks on beer production set to expire at the end of the year.

β€œIt is very difficult to operate a small business if you don’t know what your tax rates are going to be,” adds Pease.

Texas Republican Congressman Roger Williams is working to make the lower rates permanent.

The current tax rates were part of the Tax Cuts and Jobs Act of 2017. If they expire, the taxes breweries pay are set to double — something Pease says many businesses can’t afford.

β€œIt is a collective $80 million in savings to small and independent brewers to pay those lower rates,” says Pease.

Meanwhile, Williams says the bill already has bipartisan support. He’s calling for his colleagues to quickly send the bill to the House floor for a vote by the end of July.

Copyright 2020 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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