Oregon bill would hike beer, cider and wine taxes by more than 2000%

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Oregon bill would hike beer, cider and wine taxes by more than 2000%

By Elizabeth Hayes – Staff Reporter, Portland Business Journal

A bill to increase alcohol taxes to raise hundreds of millions of dollars for prevention and treatment of substance abuse is drawing staunch opposition from the Oregon Beverage Alliance and strong support from recovery advocates.

House Bill 3296, sponsored by Reps. Tawna Sanchez and Rachel Prusak, would raise the wholesale beer and cider tax from $2.60 a barrel currently to $72.60. The wine tax would increase from 65 cents to $10.65 per gallon.

The Beverage Alliance called the tax increases unprecedented: a 3000% hike on beer and cider and 2000% hike on wine. If the bill passes, Oregon would have the highest beer, wine and spirits taxes in the nation, according to the alliance.

“If the goal is to kill the Oregon beer, wine and cider sectors, this bill is a great start.”

HB 3296, dubbed the Addiction Crisis Recovery Act, would also require biennial increases in the markup prices for distilled liquor sold in the state.

Mike Marshall, executive director of Oregon Recovers, said raising taxes is the best way to reduce harmful consumption of alcohol. The legislation itself notes that Gov. Kate Brown declared addiction a public health crisis in 2018 and that Oregon has the third highest untreated addiction rate in the nation. The state loses $6.7 billion per year to untreated addiction.

“The legislators understand the cost of addiction,” Marshall said. “The business community understands it. The people of Oregon understand it.”

The bill is really about increasing the wholesale price of alcohol by 20%, similar to how the state treats tobacco, he said. The net impact at the retail level would be just 21 cents for a 12-ounce beer, while the retail price of a glass of wine would rise by an average of 31 cents per glass and a cocktail would go up by 18 cents, according to Marshall’s calculations.

The bill would require revenue from the increased taxes to be set aside in a fund used at the direction of the Alcohol and Drug Policy Commission for prevention and substance use treatment. All told, the bill would generate $746 million in new revenue per biennium, Marshall said. It would fund 1,010 more resident treatment beds and 1,240 detox beds, in addition to thousands of outpatient openings and new jobs.

“Every county has to have a certain number of treatment beds and recovery housing, an actual plan statewide,” Marshall said. “This will require not only that there be more money in the system but that it be distributed in such a way to ensure the continuum of care at the local level and be culturally specific.”

He said he expects opposition from the two major beer conglomerates: Anheuser-Busch and Molson Coors Beverage Co.

“They’re going to try to put the kibosh on it here, we already know that,” Marshall said.

The bill comes as closures due to the Covid-19 pandemic and wildfires last fall have dealt a blow to the beer, wine and cider sectors, as well as bars and restaurants. The Oregon Beverage Alliance estimates that 20,000 jobs related to beer and wine in Oregon were lost in 2020.

The Covid pandemic has also worsened the state’s addiction crisis, Sanchez said in a statement.

“As we recover from the pandemic, it’s critical that we adopt strategies to protect our families and increase prosperity,” Sanchez said. The bill “will significantly reduce that economic damage, require national alcohol companies to pay their fair share of the cost of damaging alcohol consumption and lift thousands of Oregonians out of active addiction.”

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