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NEWS RELEASE

For Immediate
Release:

April 16, 2002
 

For More
Information
Contact:


Neal Hanks (MADD), 214-744-6233, x4567

Kim Miller (CSPI),
202-332-9110, x338

Jonathan Adkins (NAGHSR), 202-789-0942

Stop the Beer Tax Rollback
Reject HR 1305

 Mothers Against Drunk Driving • Center for Science in the Public Interest • National Association of Governors’ Highway Safety Representatives • Consumer Federation of America

SAFETY AND CONSUMER GROUPS, AMERICAN PUBLIC JUST SAY NO
TO BEER INDUSTRY’S “ROLL BACK THE BEER TAX” BREAK

WASHINGTON, D.C. (April 16, 2002) – As members of the beer industry roam the halls of Congress this week to seek passage of legislation (H.R. 1305) to cut the national beer tax by 50 percent, a coalition of health, safety and consumer groups today warned of dire consequences if the beer industry gets its way. 

Mothers Against Drunk Driving (MADD) and the Center for Science in the Public Interest (CSPI) were joined by the National Association of Governors’ Highway Safety Representatives (NAGHSR) and the Consumer Federation of America (CFA) to urge Congress to reject H.R. 1305.   They also released a national public opinion poll showing that by a 2 to 1 margin, Americans oppose rolling back the federal excise tax on beer.   The majority of Americans – 71 percent – would support increasing the national beer tax a few cents per bottle to equal the tax on liquor if the funds were used for substance abuse prevention. 

The National Beer Wholesalers Association is spearheading H.R. 1305, a bill to roll back the federal beer excise tax to its 1951 level.  Since that time, the beer tax has been increased only once, in 1991.  Today, the beer tax amounts to $18 per 31-gallon barrel or approximately 33 cents per six-pack.  Had the tax kept up with inflation since 1951, the rate today would be more than $50 per barrel or more than a dollar per six-pack.  The beer industry's proposed rollback would restore the 1951 tax rate of $9 per barrel or about 15 cents per six-pack.

Economic reports estimate that the 1991 increase in beer taxes saves more than 600 young lives in alcohol-related crashes each year.  In 2000, alcohol-related traffic deaths rose to 16,653, which was the largest percentage increase on record.   Research shows higher beer taxes result in fewer alcohol-related fatalities.

The health and safety groups warned that alcohol is already a major public health and safety crisis among the nation’s youth:

  • Alcohol kills 6.5 times more young Americans than all other illicit drugs combined. 

  • Alcohol is the No. 1 drug problem among young people, who consume 10 percent of all beer sold in the U.S. or 1.1 billion cans of beer annually.

  • Beer is the drink of choice in most cases of heavy drinking, binge drinking, drunk driving and underage drinking. 

  • An estimated 1,400 college students (ages 18 to 24) die, 500,000 are injured, more than 70,000 are sexually assaulted, and 400,000 engage in unprotected sex while under the influence of alcohol each year.  Last year alone, 2.1 million drove under the influence.

Millie I. Webb, national president of Mothers Against Drunk Driving (MADD) warned that, “Lower taxes and prices will likely mean that price-sensitive young people will drink more and will die more in crashes and by other alcohol-related causes.” 

The beer industry claims that the federal excise tax on beer is a burden for consumers.  But the MADD-CSPI poll shows that the majority of Americans (62 percent) feel that the current federal excise tax on beer is about right or too low.

The poll also found that 75 percent of all Americans believe that a beer tax cut would economically benefit the beer industry – more than consumers.   About 77 percent of drinkers agreed.   When told that the average American who drinks beer consumes only about two beers per week, and pays around 11 cents per week in national beer tax, 86 percent of drinkers did not think this was too high a burden, even for moderate drinkers.

“Passage of H.R. 1305 will line the pockets of the beer industry and reward heavy drinkers and teens with cheaper beer,” said George A. Hacker, director of the Alcohol Policies Project at the Center for Science in the Public Interest (CSPI).   “The beer industry claims that beer taxes hurt working and low-income people the most, yet producers boost prices whenever they want to maximize profits."

Last fall, for instance, Anheuser-Busch increased U.S. beer prices and recorded an 8.9 percent jump in fourth-quarter profits.  In four months the company made $228 million in profits, revenue grew 2.6 percent, but sales were up only 0.3 percent.   “Clearly, the beer-tax rollback is only one component of the industry’s strategy to gain profits, regardless of the health and safety hazards it would impose on the American people,” Hacker said.

Alcohol problems cost American society more than $184 billion in 1998 in health care, criminal justice, social services, property damage, and loss of productivity expenses.  Alcohol is a factor in as many as 105,000 deaths annually in the United States and a primary contributor to a wide array of health problems and human suffering.  These include various cancers, liver disease, alcoholism, brain disorders, motor vehicle crashes, violence, crime, spousal and child abuse, drownings, and suicides.

NAGHSR Executive Director Barbara Harsha said, “One of the major causes of death and disabling injury on our highways is drinking and driving.  Teens make up a disproportionate number of these tragic deaths with more than 2,300 killed nationwide in 2000 alone.  Given this, why lower the beer tax, which will make it easier for youth to drink and drive? H.R. 1305 is simply bad policy that will only make the problem worse."

CFA Assistant Director Art Jaeger charged that the beer industry “misleadingly claims that taxes represent 44 percent of the retail price of beer.  What they don’t tell you is that this calculation includes sales and excise taxes, federal income and payroll taxes, state and local income, payroll and other taxes collected from producers of all products.  The fact is, the federal beer excise tax amounts to less than 7 percent of the average price of a six-pack, Jaeger said.  “A beer tax rollback would also rob the U.S. treasury of about $1.75 billion each year at a time when federal funds fall far short of addressing the nation’s massive alcohol-related problem.”

The group also said that beer industry spending on “prevention” messages and programs is far outweighed by what it spends promoting, glamorizing, and normalizing the use of its products.  Anheuser-Busch, the world’s largest beer producer, says that it spent some $300 million on alcohol education and awareness efforts between 1982 and 2000, or about $15 million per year.  In the year 2000 alone the company spent more than $355 million advertising its products, and likely more than double that on promotions, sponsorships, and discounts.   For every dollar it spends on alcohol education, the company spends at least $50 promoting beer.

For more information, please visit the following web sites:

MADD: www.madd.org
CSPI: http://www.cspinet.org/booze/
NAGHSR: www.statehighwaysafety.org