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Alcohol Tax Hike Will Hit Consumers, Opponents Say

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(credit: CBS) Pat Kessler
Pat Kessler knows Minnesota politics. He's been on the beat long...
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ST. PAUL, Minn. (WCCO) — Minnesota House Democrats are proposing tax hikes on liquor, wine and beer — and it has Minnesota brewers foaming.

At St. Paul’s Summit brewery, demand is so high that the company is building a $13 million addition.

Summit’s company founder Mark Stutrud never expected this latest struggle: House Democrats want to raise excise taxes on barrels of beer by 84 percent.

“It’s very unnerving. I’m still able to sleep at night, but I have more reason to get out of bed I guess,” Stutrud said.

Large Minnesota brewers now pay $4.60 on every barrel. House Democrats want to raise it to $27.75. The same tax on the same beer in Wisconsin is $1 a barrel.

Summit says the proposed tax bill will exceed its cost for labor, utilities and even basic raw materials: barley, hops and water.

“We’re ending up putting more taxes into that glass of beer than we are ingredients,” Stutrud said.

House Democrats, however, minimize their beer tax, with House Speaker Paul Thissen describing it as pennies a glass.

“It would be about 7 cents per 12 ounces of beer,” Thissen said.

But brewers, like Summit, say that’s deliberately misleading. They’re predicting at least 14 cents a glass, $2 a 12-pack and up to $4 a case.

“If we have to increase our prices by 12 percent to cover these costs, it going to come out of your pocketbook and everyone else’s who enjoys a glass of beer,” Stutrud said.

The House Democrats said they’ll carve out a tax exemption for small brewers, but Minnesota companies, like Summit and Schell’s brewery, said they don’t qualify.

So, they say they’ll be paying the same rate as the big brewers like Budweiser and Miller.

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