Senator Martin Heinrich was in Albuquerque last week, and representatives of the New Mexico Brewers Guild were able to set up a meeting with him to talk all things craft beer in regards to the federal government.
Tractor Brewing co-owner/president Skye Devore spearheaded the event, which was held inside the brewery at Wells Park. The Senator certainly seemed to appreciate the informal nature of the event, which featured a sizable charcuterie tray and free drinks for all, not to mention being free of the usual political debate.
Over the course of a half-hour, numerous topics were discussed between the Senator and a group that included Skye, Tractor co-owner/brewmaster David Hargis, La Cumbre owner Jeff Erway, Hollow Spirits owner Frank Holloway, New Mexico Brewers Guild executive director Leah Black, Guild board members Jayson Wylie (Taos Mesa), Jamie Schwebach (Canteen), and Jess Griego (Bosque), and one beer writer who was there to chronicle it all.
The meeting featured both the Guild members asking questions of the Senator, and the Senator in turn asking questions of them.
“We’re definitely interested in the federal excise tax,” Skye said.
There has been an effort by the Brewers Association and others to modernize, modify, and ultimately lower the tax to help breweries and other craft beverage manufacturers across the country. Heinrich said he did not have any specific updates, and that whenever the Senate Bill 362 passes through the Senate Committee on Finance, it will not appear by itself in front of Congress.
“It will be part of a bigger bill,” said Heinrich, who is a sponsor of S.362. “The conversation is happening right now. You won’t see any committee hearings on it, or a floor vote, it will be packaged into something else.
“When things do move, it will move fast.”
Heinrich added that he did not know whether Chairman Chuck Grassley (R-Iowa) is for or against the bill, but that the ranking minority member, Ron Wyden (D-Oregon), is likely to be supportive.
The Senator then asked the room about how much of a burden the tax currently is, as well as how the tariffs on aluminum and steel have affected the brewing industry.
Skye said that Tractor saw a $20,000 increase on taxes, plus a 7-percent increase on the cost of aluminum cans. Even though some of those tariffs have been lifted, the cost is not going down.
“I assume (the cost of) aluminum is way bigger than steel,” Heinrich said.
“For four of us it’s an enormous, enormous cost,” Jeff said. “For us it’s a change of nearly $100,000.”
Jeff said that if the current pace holds, craft beer cans will outsell glass bottles by 2021.
Heinrich then asked if the cans were limited mainly to four- and six-packs, with specialty beers still mainly in 22-ounce bomber format.
“There’s things called crowlers now,” Leah said. “There are places in town that sell single cans, 19.2 (ounce) cans. There are single-use applications, and six-packs and cases.”
Skye pointed out that the popularity of cans extends to portability, as well as to recycling, as she noted that recycling glass in Albuquerque is difficult.
“It’s definitely hit a lot more sectors than I even realized when things first got announced,” Heinrich said of the tariffs.
Another major issue for the breweries was the partial government shutdown earlier this year. The Tax and Trade Bureau (TTB) was among the agencies that was shuttered, which left breweries unable to get approval for labeling, and kept new breweries from opening if they had not yet completed the federal process.
Making sure funding is there to keep TTB operational during a partial shutdown is a priority, Heinrich said. The Senator was curious about the labeling process.
“What are they evaluating those labels on?” Heinrich asked.
“There are things that they deem as criminal (or inappropriate),” Jeff said. “Santa Claus is not allowed on them. That’s been a big deal for some of the European breweries exporting them.”
Skye told the story of how Tractor wanted to export cans of its Haymaker Honey Wheat to West Texas. The label included a poem with a specific word in it that had nothing to do with the beer itself, but was still found to be objectionable.
“We’re sorry, the word strong could not appear anywhere on your label because it could be referring to the beer’s strength,” Skye said.
“If you have an American strong ale, you can’t call it that?” Heinrich asked.
“You can’t call it a strong ale,” Jeff replied.
“You can write Arrogant Bastard on there, but you can’t call it a strong ale,” Heinrich said. “Wow.”
To continue the trend of how ludicrous label approval can be, Jeff ran into a most unusual request from TTB.
“We tried to apply for From Putin With Love right after the election, and they said unless Vladimir Putin has endorsed this beer, you cannot call it that,” Jeff said.
Jeff did add that he sent a letter to the Kremlin asking for that endorsement, but never heard back.
After further discussion about labeling, the cost of aluminum cans, and the Senator telling Jess that Scotia Scotch Ale is still one of his favorite Bosque beers, the group moved onto the next major issue.
“This is not just about our industry, and I don’t know how much the federal government can do, but it’s about giving back more to our state,” Skye said. “Our breweries rely mainly on the piece of the pie that is New Mexico, and we can only get so much of the pie from a population that is not increasing, especially in the (Albuquerque) metropolitan area. It’s really hard for me to say that if my taprooms are going to be successful, then that’s because someone else’s taprooms are not going to be. We’re fighting for the same consumer dollars.”
Breweries from smaller towns, like Taos Mesa, rely almost as much on tourists as locals, if not more.
“I see that on a personal level,” Jayson said. “We’re a destination place. Our county has 30,000 people and it’s huge (in land area).
“We absolutely have to get more people into this state. We need other manufacturers, not just beer, wine, and spirits, but other ways we can get people to come here and live here, be here, and want to stay.”
The word is getting out, however, that the quality of New Mexico breweries are starting to draw in tourists who could be persuaded to move here in the future, as Leah pointed out.
“There’s people that said I decided to come to Balloon Fiesta with this person, even though I was that into it, but I knew you guys had great beer,” she said. “I wanted to come for the beer. That’s fun to know, that beer is bringing people here.”
Heinrich noted that when it came time to dedicate the Rio Grande del Norte National Monument, they did so at Taos Mesa, which was a good way to synergize the attraction of craft beer and the outdoors.
“I think there’s an opportunity for the craft beer and craft beverage business with the outdoor industry in New Mexico,” Jamie said.
“I’ve had a lot of conversations with the outdoor industry,” Heinrich replied. “We have a better quality of life and much supportive political climate than where a lot of products are manufactured. … We have not done a good enough job bringing some of those manufacturers and other businesses here, despite the fact that we have a better public lands/recreational setting.”
Heinrich said that New Mexico does have more to offer than people think, especially after Leah noted how many people she has met in the film industry have decided to take advantage of the low cost of housing here and buy instead of rent during productions.
“If people knew the combination of low cost of living, real estate prices, access to public lands, access to really a cultural uniqueness that does not exist anywhere in the United States, we would have the opposite problem,” Heinrich said. “We would be back where we were 10 years ago when too many people were moving in too fast.”
Layla S. Archuletta, a member of the Senator’s staff, added that the breweries have been a huge part in attracting out-of-state residents.
“You all have been really important, too, to that social fabric of the community,” she said. “As communities pull away from gathering spaces like churches, like all of our kids going together to the same school, as we sort of segregate according to socio-economic status, you’ve brought a lot of that back in Albuquerque, with all of the really cool events that you have going on, and creating communities again. That’s not your main calling, but you’ve done it really well. I think that’s what makes our scene unique. They’re not just coming for the beer, they’re coming for that community and the events that you’re having.”
Heinrich noted his own travels in Europe and how he sees the parallels of breweries and pubs overseas.
“It’s like a public house in Europe, right?” he said. “We got it so wrong for so long in the United States. We’re going to zone bars to be way over there so everyone has to drive to them, as opposed to having a brewpub in your neighborhood.”
Leah said that for much of the brewing industry in New Mexico, it is the people living closest to each location who are responsible for the bulk of the business.
“We’re community focused and being responsible with that issue in our state,” Jess added. “I think that we’ve provided an example for being responsible in our industry and the beverages that we sell without providing headlines as to what we’re doing. We’ve kind of monitored ourselves in that way, and through the Guild.”
Overall, the entire conversation seemed to be just as informative for Senator Heinrich as it was for members of the Guild. This sort of outreach between the industry and a high-ranking government official is exactly what New Mexico needs to help grow its economy.
Thank you to Skye and the other Guild representatives for allowing me to sit in on this discussion, and to Senator Heinrich and his staff.
Oh, and the Senator is a fan of Double Plow Oatmeal Stout, which is just fine in my book.