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Shelton Brothers issue statement regarding New York's repeal of beer tax and fee exemptions

Discussion in 'Beer News' started by Todd, May 1, 2012.

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  1. You say you're for treating people equally. . . then you say there's nothing wrong with giving preferential treatment to your neighbor over out of state people? That's cute.

    Every company in the world is run by and for people. . . and go read the Citizens United opinion. . . sorry, companies are people (hence the decision that your system of inequality was stricken down on equal protection grounds).

    You can't say you support equality, and then support a system of inequality, and be taken seriously, or logically etc. . .
  2. So start lobbying the legislature (the ones who imposed the fee, not Shelton) to change it. I don't see what's unfair about treating everyone the same though.

    I was actually looking for objective data, not what an interested, biased party "says" about their own bottom line (much less with no citation or rationale behind the hype/propaganda). Now, if they can show a half million dollars in increased taxation payments via whatever tax form they file under in NY, specifically traceable to this change in fees, I'll believe it. But just "saying" it? I can say they'll make a windfall of $500 trillion, doesn't make it true.
  3. stupac2

    stupac2 Initiate (0) California Feb 22, 2011

    States definitely can favor local businesses, they do it all the time. I think that you just need to do it via giving them grants, instead of waiving taxes (or it needs to only go to certain ones, I'm not a lawyer but I know that individual businesses quite often get perks to locate in a certain spot, see Delta buying that refinery in Pennsylvania or EVERY BREWERY EVER building a second location in North Carolina).
  4. cosmicevan

    cosmicevan Champion (790) New York Dec 13, 2009

    not sure how much stock people put into the local news, but this morning while getting ready for work, this story was mentioned and they said that the net expected impact to the consumer is a $1 increase per pint for any locally made beer.

    all you out-of-staters who complain about how expensive it is in NY well, now you'll have another buck tagged onto each pint you order to bitch and moan about. all this talk about pennies per pint in costs to the brewers ultimately ends us as $1 more to us. we are the ones who will suffer from this. calling out brooklyn brewery or other big guys is silly since they are big and known and can afford these costs (not that affordability makes it any less of a reason to be pissed about), but a major driver to try a new local brewery's beer is that it is usually priced at a discount. this will go away which will ultimately hurt the little guys in the end.

    i just find it comical that this all started from shelton bros...as if you can ever find the beers that they distribute in NY. so now that the playing field is leveled, does this mean that we'll see more product coming into NY? doubtful. i'm very glad that you are concerned about raising tax revenue for our public services as opposed to additional job creation and wider selection of local options letting these tax breaks help little guys get started, since we all know that our taxes are wisely spent and these changes will make a big difference in our school and public services. so what was really accomplished here?

    i also find it funny how all the out-of-stater's think this is no big deal. i guess you guys also don't think that it is a big deal that gas prices go up either...since you can afford those extra few pennies per gallon? maybe we should start a lawsuit to get gas prices to be the same in every state? everyone is so worried about what NYers pay...and granted we aren't even the highest in the country, but i bet a lot of people would not be happy to pay our gas prices. from here, looks like we are #6 most expensive. alright all those in defense of this, let's start ponying up those extra pennies per gallon.
    grandq and ssteigerwald like this.
  5. How many people here complaining about this have contacted their local legislator and lobbyist?
    Vav and chefkevlar like this.
  6. cavedave

    cavedave Champion (930) New York Mar 12, 2009

    Everything Shelton did is legal, all they complained about in their filing was justified, and the resultant decision is fair and constitutional. All Shelton does to make sure foreign breweries get as little of the profit from their brands sold in this country is legal, and contractual. They are out to make the most money they can, and that is how capitalism works.

    Wish I could reference the posts from foreign brewers who stated right here on this site their fervent desire to be rid of Shelton as their distro, and let those posts make the points of how they are such and such so and so's, but I can't. Leave it to say I cannot wait for the day I don't have to read their now-even-more-hated name after the words "distributed by" on some of my favorite beers.

    And that day is coming my friends, and it will be a good day indeed.
  7. emannths

    emannths Savant (390) Massachusetts Sep 21, 2007

    If you look at the cost, it's about $0.08 per pint, tops. Even if it's subject to some markup along the way, it's still about an order of magnitude less than $1/pint. "They" no doubt got their numbers from someone with a stake in this game rather than simply doing the math for themselves.
  8. It just needs to be done in a non discriminatory manner generally speaking. North Carolina for example, doesn't discriminate against out of staters in the perks they offered for bringing business there. CA/CO breweries, come on in, we don't discriminate in our perks. . .

    Waiving taxes is perfectly legal. Waiving taxes for your bros, but not your out of state bros, is what gets governments into trouble.

    Of course, the biggest exception here is the natural resources/education thing . . . you can charge out of staters more for your state parks, fishing licenses, tuition. . . maybe an innovative NYer can find a way to get beer to fit into that exception.
  9. dam_paul

    dam_paul Aspirant (25) May 2, 2012

    WOW! I have read some self-justifying crap in my time, but that rubbish from Shelton Bros. takes the cake.
    Next time (and there will be a next time) please don’t try and defend the indefensible, just keep your mouth shut. You f#%ked up, big time. But instead of say ‘MY BAD!’ you try and justify your actions by saying that ‘IT’S NOT FAIR.’
    I come from Australia, where our craft beer industry is growing and developing, where the industry is doing its best to battle the giants of the industry. I just hope that the Australian craft beer scene doesn’t end up with such selfish douches dragging the industry backwards just because they think someone else has it easier than them.
    BOO F#&KN’ WHOO Shelton!
    And as far as things being fair? Many countries and communities implement protection measures for things such as meat producers, car manufacturing and grain production, to name but a few. It can help foster growth and confidence in an industry, save and/or create jobs, make business more viable, etc. External, international, interstate taxes have always been a part of business. Why shouldn’t a state help or protect its people and businesses?
    But then people like the Shelton Bros. come along, wanting to make just a little more profit. It doesn’t matter that this comes at the expense of others. There are very few level playing fields in the world of business, the selfish dogs as Shelton need to stop their bitching and moaning , and get on with selling beer.
  10. emannths

    emannths Savant (390) Massachusetts Sep 21, 2007

    Because the law says it's illegal to do so? Seems like a decent reason.
    Beerandraiderfan likes this.
  11. This only went into effect a weeks ago, so the empirical data isn't out there, yet. All we have at this stage of the game are financial projections.

    And just to be clear, I don't blame Shelton Brothers for this. I think they acted without regard for other businesses, which doesn't sit well with me considering how close knit the craft beer community is, but they didn't do anything wrong. This is entirely the doing of New York State.

    But that being said, I still have to disagree with the "everyone being treated fairly" rationale. This legal change far and away puts more strain on New York breweries than out of state breweries because it forces them to pay the fee for every single beer produced, regardless of quantity, which essentially eliminates the idea of one-off beers.

    Take, for example, Port Jeff brewing, a fairly new brewery out on Long Island. They have a 7BBL system in a TINY space, by far the highest output per square foot of any brewery I've seen. They have a single 53-gallon bourbon barrel in front of their brewery because it's literally all they have the space for, and filled it with some Porter from their inaugural batch of beer when they opened. Moving forward, they'd have to pay $150 to NYS for that beer, which is absurd considering the quantity.

    Out of state breweries will never have to deal with that burden on their experimentation, because projects that small will never cross state lines. People seem to overlook the mandatory nature of things for local businesses when discussing this topic, which, in my opinion, makes the current law far from fair.
    beertunes likes this.
  12. I don't think you have anything to worry about.

    As the walls of the discriminatory-protectionist good ol' boy system come down (still many to go) largely because of equal protection principles, I can't help but notice the amazing explosion of choice and quality in America related to the beer scene.

    I just don't think any other locale has that amount of freedom and choice options.

    Think of the amazing things that have happened when we adhere to principles of equality. America is ideally about getting the best of the best, no matter where the best originates. Equality begats opportunity, choice and success.


    http://www.youtube.com/watch?feature=player_detailpage&v=kaHkEH3nk8w
  13. Its the people of NY's legislature. They voted for this. Will the people of NY hold their legislators accountable?

    Or are they more likely to complain about it here, but not where it counts (moreso)?
  14. emannths

    emannths Savant (390) Massachusetts Sep 21, 2007

    Maybe NY brewers should export the entirety of their small batches in protest so that they can avoid paying the registration fee. You don't need your label approved in NY if you're selling it in MA.
    rlcoffey likes this.
  15. rlcoffey

    rlcoffey Savant (480) Kentucky Apr 20, 2004

    $150 fee per label is insane.

    Does any other state charge anywhere near that?
  16. cannonbill

    cannonbill Initiate (0) May 2, 2012

    So yes, the law in NY were favorable to NY Brewers, as NY has recognized the potential economic benefit of building a local industry that has proven to support local tourism among other things, and yes Shelton Brothers brands claimed that they were at a disadvantage, but hey, they knew this getting into the business. Also, and to keep it all in perspective, not even A-B or Miller/Coors sought to get this NY anomaly changed, essentially they could have if they wanted to be difficult, but they didnt (and lets not pretend that they were unaware, because they are aware, very aware).

    Let this paint the picture of why Shelton Brothers are being lauded as jerks. They dont produce a thing, they dont incur the incredible expenses of having to build, own, or manage a brewery. They just carry and distribute brands. So no, this is not about a level playing field, it is about business, Shelton Brothers may sell a lot of imported craft brands, but they do not produce any of it.. They are not craft or micro-brewers, they are a distributor of brands.. They are about business first and saw an opportunity in craft ales, not about craft ales and an interest in turning a hobby into a livelihood...

    Simply put, they may be passionate about thier business, but they put no passion into producing the product.
    beertunes likes this.
  17. I'm sure there will be plenty of contact with NY legislature, from brewers and beer drinkers alike, and I intend to do my part to contribute. But I'm not sure what that has to do with this particular discussion. This is a forum. The sole purpose of it is for people to converse. I see no error in debating the merit of the legal decision that this very thread is based upon.
    cosmicevan likes this.
  18. GarrettOliver

    GarrettOliver Initiate (0) New York Jul 25, 2003

    Leaving aside the legal questions, I feel that I should point out that these actions have large consequences for actual people. A few people here have referred to Brooklyn Brewery as "big", and said that we could "take the hit". Whether you feel that we're big is up to you (you will not be surprised to hear that I think we're small, but thankfully growing), but I do think that I should point out that Brooklyn Brewery is a company with 58 employees. Anyone who does not believe the $500K number is welcome to do the math themselves - it isn't hard to figure out. Any growing business that incurs a sudden expense of more than $8500 per employee is going to be hurt. Things may be even worse for breweries smaller than us. To some extent, though the discussion is interesting, we are discussing the "morality" of a forest fire. Things look a little different when the fire is rushing towards your house.
    tronester, grandq, adkbrewer and 2 others like this.
  19. cosmicevan

    cosmicevan Champion (790) New York Dec 13, 2009

    at the end of the day this is an opportunity to raise prices to the consumer and that is what seems to be the end result. whether the costs to the brewer are increased $0.08 a pint or $0.50 a pint i could care less. all i care about is what the pint will cost me...and from the sounds of it, those $5 pints are not going to now be $5.08...at minimum, i would expect this to result in a $5 pint going to a $5.50 pint, but more realistically it will be a $6 (and finding a $6 pint in NY without it being happy hour or some promotion before this was an impossible dream).

    i'd think it was crappy if the costs went up for the brewers and they just absorbed them and kept prices where they are at, because it wouldn't affect me...but this chump change is going to result in higher local beer prices for the consumer. i wouldn't be surprised if some establishments just raise their prices on pints in general, not just the local stuff.

    you can argue all day about how this is insignificant, but as a non-resident it doesn't affect you one bit. if the cost of pints went up in your state due to an $0.08 surcharge that some non-resident initiated you'd be singing a different tune my friend. $0.08 cost at the brewery level creeps up every step of the way until it hits your bar bill at a buck.
    beertunes likes this.
  20. cosmicevan

    cosmicevan Champion (790) New York Dec 13, 2009

    can't wait! now that the post office wised up and is allowing shipping of alcohol perhaps we'll start to see some of these breweries get out of their contracts and just ship direct to us.
    cavedave likes this.
  21. emannths

    emannths Savant (390) Massachusetts Sep 21, 2007

    Some bars may increment the price in different ways, but the average increment will be something more like $0.10-0.20, not $1. Or if it's $1, blame the bars, not the tax.

    I'm all in favor of cheaper beer prices, and I think the right way to go in this case would have been to change the law so that exemptions for small brewers extended to all brewers regardless of their location. AFAIK, there's no reason that NY could not have done this. So while the Shelton's may have catalyzed this change, I have a hard time really vilifying them for pointing out an unconstitutional tax. Instead, I'm inclined to point the finger at NY SLA.
  22. A few things:

    Firstly, that is a pimpin' hat in your BA picture.

    But more seriously, I don't think anyone intended to suggest that a half million dollar surprise from Uncle Sam (or Lady Liberty?) is a small feat for any business. Brooklyn Brewery is sizable by microbrewery standards, but in the grand scheme of American business is most definitely tiny. I think more accurately, the intent was to point out that Brooklyn does enough business and has high enough demand that these changes won't be terminal in the way that they might be for recently opened firms or those in the process of opening.

    Deciding who NYS screwed the hardest, though, isn't really the point. At the end of the day, I think New Yorkers are pretty loyal consumers, particularly when it comes to local brands, and we're opinionated as hell when it comes to legal issues. I think we could get these laws reworked with enough noise from brewers and consumers, and most importantly, if we can't, the price increase won't stop guys like me from keeping a steady stock of Black Chocolate Stout in my cellar.

    If you keep making it, I'll keep buying it, and things will be okay.
  23. emannths

    emannths Savant (390) Massachusetts Sep 21, 2007

    Ok--how many barrels did/will you sell in NY City?
  24. New York State > New York City.
  25. And New York City excise tax on beer (26¢/gallon) > New York State excise tax on beer (14¢/gallon)

    ...and probably why "emmannths" asked.
  26. emannths

    emannths Savant (390) Massachusetts Sep 21, 2007

    Yeah, just curious what a back-of-the-envelope calculation looks like for the breakdown of NYC/NYS/ex-NYS sales, which is doable if you know that the total sales will be 180,000bbl and if you get a number for NYC sales.
  27. Irrelevant. The claim was this new tax associated w/ Shelton Bros suit would cost $500,000 for Brooklyn alone. Not the total tax impact.
  28. stupac2

    stupac2 Initiate (0) California Feb 22, 2011

    Well, I think the NYC tax was waived too, so knowing the breakdown between the two is important for estimating the tax that now has to be paid.
  29. Irrelevant? Brooklyn sells its beer in the city, in the rest of NY state and also out of state. State beer excise tax is paid based on where the beer is sold.

    "The (former) exemption applies to the first 200,000 barrels (6,200,000 gallons) of beer that is both brewed and sold or used in New York State in each calendar year...Exemption also applies to the New York City beer tax"
  30. I am always amused by the outrage that the long understood legal principle of corporate personhood has evoked in people.
    Beerandraiderfan likes this.
  31. Why are we talking about the former exemption if it is no longer the case? Maybe I'm missing something. . .

    Wait, no I'm not. People are just wanting to backpeddal from new tax to total tax burden.
  32. ? The loss of the exemption is what the Brooklyn Brewery is claiming is going to cost them the $500,000.
  33. stupac2

    stupac2 Initiate (0) California Feb 22, 2011

    People are trying to check Brooklyn's assertion that the tax they will now pay because of the removal of the exemption will be around $500,000.
  34. Mebuzzard

    Mebuzzard Champion (875) Colorado May 19, 2005

    The more I read this Shelton response, the more it irks me. Yes, NY brewers should be taxed (at least to some extent, maybe not on the levels of imports. I understand that lower tax rates help new and small businesses). I agree. But the way Shelton attacks this is ugly. It is a total effort to shift away ANY blame (real or perceived) by making excuses, hypotheticals and personal attacks, not to mention 'lawyer' tricks. If they just stuck to the issue, it would have been a nice response. Instead, the slime just oozes.

    Yet, initially Shelton wanted to do away with ALL taxation--they said that. So, really they would vote 'NO' on these. But they're appealing to emotion. And being quite defensive.
    nanobrew, ssteigerwald and beertunes like this.
  35. OK, let's assume Brooklyn's representations are true: So Brooklyn then saved $.5~ million every year that out of state brewers had to pay under that rationale of what it is going to cost?

    Why can't they just raise their price by the 2-3 cents per pint to cover this 'new to them' expense (like their out of state competitors have been, and will continue to have to pay)?

    I mean, Brooklyns loyal customers will understand right? Its not like Brooklyn has been keeping that good ol' boy exemption $$$ they enjoyed every year prior to 2012 right? They passed those savings on to the customer this whole time, right?
  36. Their position is based in logic, the law and a fundamental notion of fairness and equality. New York's attorney general and court system agreed.

    In terms of appealing to emotion. . . I would have to say the people who fail to hold their own government accountable for the back slapping favoritism and the taxation scheme it implemented, might be the ones relying on emotion more than anything else.
  37. Mebuzzard

    Mebuzzard Champion (875) Colorado May 19, 2005

    I agree with ya.

    Shelton's response was more than an effort to 'put things straight'
    Shelton strays from this sharply and decides to play innocent (remember, they wanted NO tax....but then support it) and find villains to deflect others' anger. They have good points, and a poisonous message.
  38. emannths

    emannths Savant (390) Massachusetts Sep 21, 2007

    Fwiw, if Brooklyn sells 180,000bbl this year, the "new" taxes of $500,000 account for a price increase of $0.011/pint (aka, one freakin' penny), $0.018/25.4oz, or $0.05/6pk. Something tells me consumers won't know the difference (even marked up 400% at the bar)--it certainly doesn't sound like a "forest fire" getting ready to burn down the brewery.
  39. I can't read this without putting in my two cents.

    I really don't understand the argument that Shelton Brothers are just a business, have no love of craft beer, have invested nothing in producing anything, and are just in it to make squillons. We're a tiny brewing business at very bottom of the world... our beer is expensive to make, and really expensive to ship all the way to USA. The Sheltons have spent thousands of dollars coming down here to meet us (three times) and then patiently waited 2 years for us to be in a position to send them some beer. To say these guys are just in it to make a fast buck is ludicrous. Wake the fuck up, please.

    The first comment at the following link sums up the situation better than anything else I've seen written on the matter... http://beerstreetjournal.com/shelton-brothers-issues-statement-on-new-york-ruling/

    Slainte mhath
    Stu McKinlay
    Yeastie Boys, New Zealand

    ps. to Mr Oliver - I'm one of the overseas brewers who will be attending The Festival in June. It would be an ideal time to round us all up, put us in that bag and throw us in the lake... but, as many of us are fans of your beer and brewery, it would be far more productive for you to come up and have a few beers with us. Bring some of the lawmakers too, if you can, and we'll show them how great it is to have a craft beer scene with diverse brands, unique beers and amazing flavour. A scene where people celebrate flavour and having a blast, rather than blindly sinking piss for the buzz. Lets use it as an opportunity to put an end to any bickering and to show how poorly thought out the label fee is. Surely that fee is most poorly thought out and removing it would be the simplest way to quickly help small brewers. From there you can work on the taxes... we'd be happy to add our minds to the discussion if there is any way we can help. I'm sure many other brewers would too.
  40. Agreed. Their position is logical. The manner in which they went about it enflamed passions. I would not have mentioned anyone by name, especially the most popular brewery in the state you're now being vilified in. Good legal points, poor public relations.

    Bottom line though, if there is an entity that deserves scorn, its the legislature. They came up with the system of favoritism, and they pulled the rug out on their constituents.
    yalnikim75 likes this.
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