Yesterday was the 11th Anniversary of Kenai River Brewing first opening for business, and the 1 year anniversary of the opening of its new brewery. To celebrate, Kenai River brought in the band Denali Cooks and invited everyone in Soldotna to stop by from 5 to 8 PM. I was there for the first hour or so and snapped a few pictures.
It was a great celebration, well attended by the local residents. Since moving into its new home, Kenai River Brewing has become an even more integral part of the community than it was before, plus its kitchen is serving some fantastic food. My only regret is that as tourist season ramps up, it's likely to be impossible to get in the door! So congratulations to Doug Hogue and the rest of the team; I'm looking forward to the next eleven years!
May 6th was National Homebrew Day. Here's a video I came across that celebrates the international side of homebrewing. It's worth a look:
On a less pleasant note, Rep. Paul Seaton of Homer has proposed tripling the excise tax on craft beer. Here's what Ryan Makinster, the executive Director of the Brewers Guild of Alaska had to say about it:
"In a memo dated March 6, 2017, Rep. Paul Seaton, R-Homer, asked the House Labor & Commerce Committee, chaired by Rep. Sam Kito, D-Juneau, to consider legislation to repeal or amend the small craft brewer exemption. The exemption pertains the first 60,000 barrels of beer sold in state by a brewery that meets the federal definition of a small brewery.
If this suggestion is adopted, the excise for small craft breweries will leap from $.35 a gallon to $1.07 a gallon, effectively tripling the tax Alaska craft breweries pay. In his memo, Paul Seaton states that that this change will equate to $2.6 million in tax revenue to the state. What isn’t mentioned is that $2.6 million will do nothing to address the state’s fiscal gap of over $2.5 billion dollars. In addition, he fails to mention that it has the ability to stifle expansion in a growing value-added manufacturing industry, something the Alaska desperately needs as it tries to diversify its economy.
What is also overlooked is the economic benefit this industry plays in Alaska and the much greater positive effect a vibrant craft brewing industry has on the state’s overall economy. In 2015, the year of the most recent economic impact study, the industry was responsible for approximately 1,400 direct and 2,300 combined direct and induced jobs. In the same year the industry generated $340 million in direct income as well as a combined income of $492 million. This economic engine was responsible for $47 million going into the pockets of Alaskans who work in the industry while contributing $33 million to Alaskans who support the brewing industry and $16 million to Alaskans through induced spending.
In addition to the substantial economic impact these businesses play in the Alaska economy, these small businesses are an important part of Alaska communities. Alaska craft brewers are good community members who donate cash, beer, and merchandise to local and statewide causes and organizations. Many breweries in Alaska have and continue to win national and international awards, bringing acclaim to Alaska and its brewing industry. In addition, the brewers advertising and distributing outside the state, showcase Alaska and its residents to the nation and the world.
“Amending and updating this statute would create a level playing field for the alcohol industry,” Seaton said in his memo to the committee. What this proposal actually does is give large out of state brewers a leg up when competing with small Alaska businesses. Besides not having the economy of scale large outside breweries have, the cost to produce beer in Alaska is substantially higher. Out of state breweries ship the finished product for distribution in state, effectively paying for shipping of the final product once. Alaska breweries on the other hand must ship in their main ingredients like hops, barley and malt as well as their bottles and cans; a much larger amount of shipping by weight than the finished product. In addition, almost all of their heavy industrial equipment is shipped from out of state suppliers. For anyone that has ever paid for shipping from the lower 48, you know how expensive it can be. Imagine how expensive it is for the tons of ingredients and equipment required for a brewery to operate in Alaska. Due to this fact, Alaska breweries operate on a smaller margin than outside breweries and if the excise tax is tripled, the price of Alaska craft beer will have to rise to accommodate the new taxes. As with all products, there is a pain point for consumers and eventually they will choose a lower priced product rather than indulge in the higher price craft products, although they would prefer to support local.
Finally, as has been pointed out by many members of the industry including brewers, wholesalers, retailers and customers, the excise tax paid is not a 1-to-1 correlation to the final price of the product. Although the tax, in the proposed case of an additional $.71, is assessed on the product, the wholesalers will adjust their markup based on a percentage of the total cost to them including the tax, not just add $.71 to their cost. Repeat this again at the retailer level and the increase to the consumer will be substantially higher than the proposed $.71.
The craft brewing industry is one of the only growing value-added manufacturing industries in the state of Alaska. To risk harming this successful and vibrant industry for little financial gain to the state which will not make a dent on Alaska’s fiscal crisis is not only short-sighted, but misplaced."
As a representative of the BGA, Ryan has to be fairly diplomatic toward Representative Seaton; as just a private citizen of Alaska, I don't. For example, I can say that anyone who says he seeks to "level the playing field" between Ab-InBev and Homer Brewing Company, or between Coors and Grace Ridge Brewing Company, is either a fool or a liar. I realize that money is tight in Juneau and Seaton never met a tax he didn't like, but the state of Alaska already collects over $40 million a year in alcohol taxes. Trying to squeeze another $2.6 million out of the citizens of Alaska who want to support a local industry by drinking local craft beers hardly seems proper, especially if the stated goal is to make things "level" for large Outside corporations. Personally, I'm fortunate enough not to be represented by Paul Seaton, but if you happen to live in his district, you might want to keep this crap in mind when the next election rolls around...
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| The man who wants to tax your beer even more than it already is. |
In happier news, there's been an announcement about the 7th Annual Kenai Peninsula Beer Festival. The festival is put on each year by the Soldotna Rotary Club, with all proceeds going to support local charity projects. This year's festival will take place on Saturday, August 12th, and will again be held at the Soldotna Sports Center. There will be a change in the event's hours this year, with the general admission session running from 6 to 9 PM. There will be a VIP Session (limited to 200 tickets) from 5 to 6 PM, with breweries being asked to bring a special beer that will only be offered during this session. As always, there will also be live music, food vendors, and People's Choice Awards for the Best Beer and Best Brewery. So mark your calendars and make your plans to attend what's sure to be another great festival!
I'm still on the radio. My Drinking on the Last Frontier radio program on KDLL FM 91.9 FM is broadcast the last Saturday of every month at 11 AM. If you missed last month's show, you can listen to a podcast of it on KDLL's website or just follow this link. The next broadcast will be Saturday, May 27th.
Midnight Sun Brewing has released the commercial version of last year's Big Fish Homebrew Contest Winner, Blackhawk Bock. Here's the information on it:
Midnight Sun Brewing also celebrated its 22nd Anniversary earlier this month, so congratulations to them for that.
St. Elias Brewing has a couple of new brews on tap. Here's its most current tap list:
Finally, I've seen several breweries across the state make posts indicating that they are looking to hire additional staff, either permanently or for the summer. If you're in the market for a new job, you might want to check with your local craft brewery to see if they are hiring.
That's it for news, let's do some beer reviews. Once again, I've got two reviews this time round.
Denali Brewing's Big Dipa Double IPA: This is the latest seasonal release from this Talkeetna-based brewery. It poured a dark honey color with a big, cream-colored head. The nos was loaded with the aroma of citrusy American hops. Carbonation was excellent and the mouthfeel was fairly light. The bitterness of its initial attack is strong, but not nearly as strong as you'd expect from a beer with 100 IBUs, making it much more drinkable than your typical palate-wrecking hop-bomb. The intial bitterness is followed by plenty of hop flavor and aroma. Overall, I thought it was an outstanding brew and very tasty. Plus, I love the label design! ABV 8.6%.
Trinity Brewing's Koelorado Golden Sour Ale: I've had this beer in my stash since last fall when it was gifted to me by the man, the legend James "Dr. Fermento" Roberts. Trinity Brewing is located in Denver and we don't get its beer here in Alaska, but the good doctor hand imported this one for me. Knowing it was a sour beer, I decided to let it cellar for a bit, assuming the wild/sour flavors would intensify, and finally opened it a few days ago. It poured a cloudy gold with a small white head that dissipated rapidly. The nose had all the sour notes you'd expect in a wild ale. Carbonation was low (in spite of the wax seal on the crown cap), and the mouthfeel was light. On the palate, there was plenty of tart and sour notes, but they seemed to drop off a bit abruptly, without a true finish. Not a bad beer, but certainly not as complex and interesting as many other sours out there. 5% ABV.
Well, that's it for this blog. Next weekend I'll be in Haines for the 25th Annual Great Alaska Craft Beer and Home Brew Festival, the oldest beer festival in Alaska. I believe it's all sold out, but if you've already made plans to attend, be sure to say hello if you see me. I'm always interested in hearing from anybody out there who actually reads this stuff I write. For my next blog, I should have lots of pictures and information about the festival.
Until Next Time, Cheers!
