The Senate Taxes Committee heard legislation Thursday that would provide help to Minnesota’s liquor industry as it recovers from the COVID-19 pandemic. The bipartisan legislation, SF 2064, would provide a temporary tax credit for Minnesota’s brewers, liquor retailers, and wholesalers who had to buy back or dump their products, or purchase Personal Protective Equipment (PPE) supplies.
“The COVID-19 pandemic caused major disruption and economic losses for our brewers, liquor stores, and wholesalers, who had to throw away large amounts of their product because it had no place to go when our bars and restaurants were asked to close,” said Senator Karla Bigham (DFL-Cottage Grove), chief author of the bill. “This tax credit would provide immediate financial support and help to our breweries and liquor industry across the state. It was an honor to testify alongside Hastings residents and community leaders Amy Fox and Jen Fox, co-owners of Spiral Brewery. Both are small business entrepreneurs that have contributed to the revitalization of downtown Hastings.”
“The biggest challenge Spiral Brewery’s distribution business has experienced is satisfying our customers who needed to let beer go bad at their bars and restaurants due to their closures throughout the past year. We have bought back, provided a credit, or traded at least ten barrels of old beer that we subsequently dumped, bearing the full brunt of the cost,” said Jen Fox, co-owner of Spiral Brewery. “S.F. 2064 would support breweries throughout Minnesota and help us continue our relief efforts through this global pandemic. It is creative solutions like Senator Bigham’s bill that will keep our local economies strong and continue to empower Minnesota.”
Many wholesalers in the liquor industry had to buy kegs back from bars and restaurants over the past 12 months. On average, between returned kegs (which would have been dumped) and dumping straight from the tank, breweries lost between $5,000 and $45,000 over the course of 2020. In addition, breweries currently spend anywhere from $300-$2,000 per month on PPE, as well as $10,000 and $25,000 on infrastructure and equipment to comply with the restrictions. This includes air filters, tables, partitions, tents, new point-of-sale systems to accommodate touch-less sales and reservations.
In a statement The Minnesota Craft Brewers Association expressed support for the bill, saying “The bill provides relief for breweries, other licensed beverage establishments, and wholesalers affected by the Pandemic. Brewery and other licensed beverage establishment employees have put themselves at risk during the pandemic to help make ends meet. We hope this bill moves forward to help ease some of the financial burden that these small businesses have faced over the last year to keep our communities safe.”
The legislation is also supported by the Minnesota Licensed Brewers Association and Teamsters Joint Council 32.
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