Three trade associations representing the US beer industry – The Beer Institute, the National Beer Wholesalers Association and the American Beverage Licensees – released a report this week positing that some 651,000 jobs in the US beer industry will be cut before the end of 2020 because of the ongoing COVID-19 pandemic.
“Although millions of Americans continue to enjoy beer responsibly every day, because of the COVID-19 pandemic, the beer industry has seen a dramatic decline in both sales and jobs that rely on our nation’s most popular alcohol beverage,” Beer Institute President and Chief Executive Officer Jim McGreevy, said in a release issued jointly by the groups on Tuesday. “We hope policymakers consider that our nation’s brewers and beer importers are having to make difficult decisions to adjust for the impact of the COVID-19 pandemic.”
The report, conducted by John Dunham and Associates, estimates that beer sales will dip by over $22 million during the outbreak. National Beer Wholesalers Association President and CEO Craig Purser noted that during the shutdown of the US economy this spring about $1 billion worth of draft beer went unsold as arenas, hotels, and bars were shuttered. Workforce reductions are expected to involve 3,600 brewing jobs, 1,800 distribution jobs, and 400,000 retail positions.
While the coronavirus is causing disruptions in the industry, the authors of the report also point out that companies will face additional pressures due to an excise tax increase of $154 million next year.
“Right now, these small businesses are struggling under severe financial and operational limitations to make payroll, continue production and serve their customers,” said Bob Pease, president and CEO of the Brewers Association, in a statement. “Making a bad situation worse, these businesses face a second looming crisis: an increase to their federal excise taxes in 2021 – less than four months from now!”
Pease urged officials to enact the Craft Beverage Modernization and Tax Reform Act (HR 1175/S. 362) to limit the brewing industry’s excise tax burden. The trade groups also urged Congress to provide additional COVID-19 relief.
To see a summary of the report, click here.