"Shelton Brothers lawsuit costs New York breweries millions" -- Brew York, New York

Sounds like NY brewers were saving a lot of money on taxes and fees. Were the beers correspondingly lower in price to consumers?

 

Hahahahahahaha.

I get that everyone loves it when they get special loopholes so they pay less in taxes, but it doesn't really make sense for the state of New York to subsidize local breweries over out-of-state ones. So I'm not going to cry for the NY breweries affected.

 

This is enormous news for NYS beer enthusiasts. It will mean less beer choice and selection and may cause some potential breweries to be to scuttle their plans and cause others to shut down. It made sense to give breaks to small breweries who do not compete on a level playing field with the big boys. The label costs are meaningless to them. They are far from meaningless to small breweries. And the excise tax will place a large burden on small breweries. How would you like it if you woke up one day and the cost of doing business for your small business went up dramatically.

If NYS truly cares about small business in this state, they will have to get involved promptly. We'll see what happens. It's unknown what the ultimate impact of this decision will be at the current time. What is not unknown is that this decision helps no one but the big boys.

 

The Shelton Bros: Making beer more expensive since the 1990's

 

As a craft beer consumer who lives in NYS...well, it is NYS...they are broke and handle their finances poorly. Any additional income that they suck out of an individual is great for them (in their minds). With that being said, any NY brewer that now has to pay this tax and will force them to close (as stated earlier) if probably a piss poor brewer to begin with and will not be missed. On the other hand, these new taxes will be built into the costs of beer and passed onto Joe Consumer. Cheers to me and my higher priced beer.

 

Total BS. screw shelton. Your markups weren't enough on the beers you sell here? They are cheaper to order direct from overseas with that brutal shipping bill. Tax breaks for small business that are supportingnyour economy are a good thing. It stimulates the economy and creates jobs. Nothing wrong with helping out those who already pay our ridiculous taxes. I just wish that shelton didn't handle some breweries that I love, but I disagree with this. Hopefully this won't shut down any of the up and comers who are actually making good beer.

 

This seems like a case of the Law of Unintended Consequences, at least to me. If I lived in NYS I'd be more upset with the SLA than with Shelton Bros.

 

Does anyone seriously believe this made beer cheaper on their end?

 

Perhaps they were hoping that the state would level the playing field by eliminating the tax for out of state beers instead of extending said tax to in-state ones. Pretty naive.

 

Was the tax break for in-state breweries illegal? Is that why the state is revoking it? Or did the state decide it was illegal to offer the break only to in-state breweries? Or did the NY State Liquor Authority simply say "Frack it" and get rid all the breaks for the hell of it?

 

A judge declared that the tax break for only in-state brewers was unconstitutional.

 

There it is.
SB's initial complaint was legit (nobody underage is going to want a Criminally Bad Elf even if they could get it). It was unfortunate that SLA looked at another aspect of the situation and said "oh, you know we should change that...."

 

NY could have circumvented this ruling allowing the tax/fee reductions to be enjoyed by all small brewers that sell beer in NY, or by all small brewers that brew beer in NY (regardless of where it's consumed). They chose not to.

This isn't about small businesses. It's about being a homer.

Also, these fees are still pocket change. Even in the more extreme example of the brewery that must pay $8.06 in excise tax per barrel, that amounts to a grand total of $0.15 per 6pk. That's about a 1.5% increase in price for a typical craft 6pk. The more typical case of a $4.34/bbl excise is $0.08/6pk.

Really? All this griping over eight cents?

 

So, not Shelton Bros. fault. The NYSLA could have gone the other way, not charging the fees & taxes to similar out-of-state small breweries, but they did not.

 

Well, it's their fault insofar as they brought the lawsuit that resulted in the change, and the result they wanted was either "everyone gets a break" or "no one gets a break" and the former wasn't going to happen, NY wasn't going to give up that much tax revenue for no reason.

That said, I think blaming them for a law that just distorted the market for no real reason and probably didn't actually lower prices for consumers is sorta silly.

(Incidentally, if you're wondering why I don't think it lowered prices for consumers, my thought process is that most craft beer sold in NY is produced outside of NY, just because most beer is produced outside of NY. NY breweries price their beers based on what the market can support, which will be dominated by the out-of-state breweries, so their prices don't actually factor in the tax break. What the tax break did was make them more money, which, best case scenario, just allowed them to expand faster. You can argue about whether or not this is a good thing, but I think most people can agree that allowing the state to distort the market for no real reason is stupid. Also, I am definitely open to being proved wrong about this, if there exists some way to demonstrate that in-state beer is cheaper than out-of-state beer.)

 

I believe it did to some extent. I am currently(maybe not after this crap) able to buy a 64oz growler of local beer for about $12 +/- $1 or $2 at a retailer, not the brewery. That to me is a great deal to me considering how much all of the other beers are on tap at retail stores, usually roughly $14-$16 for seasonal or regular lineup stuff.

But whatever, just give New York more cantillion and I won't care...

 

No, the Cantillon is all MINE.

Incidentally, I have no idea if that price is reasonable because CA doesn't allow off-site growler fills. Who's state has stupid beer laws NOW??

 

Touche sir, touche....

 

I'd disagree with one point merc - a small business just like other business has a financial plan in place that allows them to survive and thrive in the marketplace. If one day your whole financial situation was thrown a huge curveball and your costs increased significantly to run your business, it is not easy to make immediate changes to overcome this. Particularly the smaller you are. Responsible brewers will be caught up in this as well.

If the breweries had been given a reasonable lead time to make plans to adapt to this new situation, then they would be better able to cope with the impact the changes may have. As it is, they were given no lead time and now have to deal with the consequences.

I hope this situation is resolved quickly and no significant impact is felt. But I'm not holding my breath.