REJECT H.R. 1305

Statement of George A. Hacker
Director, Alcohol Policies Project
News Conference, April 16, 2002

It's springtime in Washington, and the beer wholesalers are back.  As usual, they're looking for handouts that will fatten their bottom line.  Unfortunately, too many members of Congress have already uncritically accepted their pleas, without having heard the full story or having considered the drastic health, safety, and revenue consequences of a beer-tax rollback.

The beer industry wants to go back to the beer-tax rate that existed more than a half century ago.  That's no more than a greedy, special-interest, money-grab.  For sheer chutzpah and overreaching, it takes the prize.  Why?

Today's federal beer taxes are low, by historical and international standards.  Even with the minuscule increase in 1991 B the first in 40 years B the tax amounts to only a small, and ever-decreasing, portion of the price of a beer:  Less than two percent on a beer bought at a bar and about six percent on the average six-pack.  Had the beer tax (now at $18 per barrel) simply kept up with inflation since Harry Truman's presidency, it would be more than three times that today.  The beer industry should be cheering, not complaining about being overburdened by taxes.

Even since the 1991 increase, the tax has already lost a fourth of its value to inflation.  The constant erosion to inflation over the years has meant billions in lost revenues that have been paid by the rest of us taxpayers.  Compared to other beverages and most consumer goods, beer is far cheaper today than it was during the 1970s.  Yet the disparity between revenues collected from beer and the massive economic harm caused by its consumption continues to grow.

The beer industry passes its product off as benign, almost magical; as the all-American "beverage of moderation."  In reality, of all alcoholic beverages, it's the one most consumed in large and hazardous amounts, and the beverage of choice in most cases of binge drinking, underage drinking, and drunken driving.  Most of the estimated $184 billion in economic costs due to alcohol consumption in this country result from beer guzzling.  Beer taxes fall far short of the revenue needed to clean up the damage caused by beer.

And there's no doubt how aggressively the beer industry promotes the use of its products. Each year, as much as two billion dollars worth of beer ads, sponsorships, and promotions glamorize drinking, linking consumption with success in sports, friendship, and sex.  And the industry's newest products, heavily advertised malternative "alcopops," resemble soft drinks, hide the taste of alcohol, and appeal strongly to teenagers.

The latest malt-beverage innovations tout liquor-brand names, such as Bacardi Silver, Skyy Blue, Sauza Diablo, and Stolichnaya Citrona, yet are taxed as beer.  They'll also be advertised as beer products, reaching large audiences of underage persons.  The industry's voluntary advertising guidelines specifically allow beer ads to reach audiences that may be half underage.  That anemic standard falls far short of even the NBC network's recent modest proposal to limit liquor ads to audiences that are composed 85% of adults.

The beer industry already goes after our kids.  Let's not make it easier for beer sellers to attract them with cheaper and cheaper beer.  Beer drinking causes more than enough harm.  Enough is enough.  Congress should not help the beer industry put young people at even greater risk.  The beer industry does not need a break, nor does it deserve one.  What it does deserve is a good grilling.

With that in mind, we offer Members of Congress and their staff a series of questions to ask when beer wholesalers come calling this week.  These questions are backed up by research findings and other evidence.  I'll mention just three of those we will provide every office in the House of Representatives.  The complete list is in the press materials and will be posted on CSPI's website.

  1. Why should we cut beer taxes in half when that would result in hundreds of additional deaths in drunk driving and underage drinking incidents?

  2. Why should the beer industry get a tax cut that is even bigger than the profits it makes on underage drinking?

  3. If most beer drinkers consume in moderate amounts, why is beer the beverage of choice in most cases of heavy drinking, binge drinking, drunken driving and underage drinking?

Congress deserves answers to these questions, before the list of beer-tax rollback supporters expands, and certainly before contemplating action on HR 1305.  The American people deserve better from their representatives than their blind support of the beer industry's request for a huge handout.

Thank you.  Now it's my pleasure to introduce Barbara Harsha, executive director of the National Association of Governors' Highway Representatives.

For more information on this issue, click here.

April 16, 2002