E-Malt.com News article: 2200

USA, California: According to a report compiled by Beer Serves America, the beer industry is healthy economically for California's 1st District. The report says the beer industry creates some 3,870 jobs in the 1st District that produced more than $127 million in wages annually. Beer Serves America is sponsored by the Beer Institute and the National Beer Wholesalers Association, which represents American brewers and distributors of beer, Times-Standard revealed on February 17.

According to the report the beer industry generated $77.1 million in total business and personal taxes for the 1st District, $39.5 million of which was state and local. Total consumption taxes, the tax on what consumers spend on beer, from the beer industry came to $21.2 million, with $12.2 million of that state and local. The 1st District spreads from Del Norte and Humboldt counties in the north to Napa County in the south and includes Lake, Mendocino, Sonoma and Yolo counties.

For California as a whole, the report says the beer industry generated 88,100 jobsthat paid $2.2 billion in wages in brewing, wholesaling and retail in 2003. Another 94,850 jobs are related to the beer industry through agriculture, construction, manufacturing, retail, travel and others, generating about $3.78 billion in wages in 2003. Statewide, the report says the beer industry generates $1.7 billion in state and local taxes. But Bob Smith, founder and president of Mad River Brewery in Blue Lake, told a different tale about the so-called craft brewery industry. He defined craft brewing as "all malt beverages made by smaller breweries that produce a more robust beer." Smith said Mad River, which was established in 1989, has 21 employees. But he said in 1996 he employed 32.

"The craft brewery industry is under an incredible amount of economic pressure, costs have gone up tremendously and competition from other craft breweries" are making a significant impact on his firm, Smith said. Smith said whereas Mad River produces about 7,500 barrels a year, a brewery in Chico puts out 1.5 million annually. "The craft brewing has almost stopped growing and some breweries are trying to bleed other breweries into bankruptcy." Smith said three years ago Humboldt Brewery in Arcata employed 24 people, "but it is now shut down. The 1st District lost that brewery largely as a result of competition in the industry."

He said the bigger breweries have the money to invest in marketing "to tell the people what to buy. Nationwide, there were more than 2,000 breweries started and about 30 percent have gone under." Smith added, "The statistics show that the bigger you are the more likely you are to see a sales growth."


18 February, 2004