Frederica Freyberg:
First, a state lawmaker wants to raise the tax on what some say is one of Wisconsin's natural resources, beer. Assembly Rep. Terese Berceau says her bill would raise the tax on brew from $2 per barrel to $10. She says that boils down to three pennies per bottle. Brewers say it's closer to $3 per case. Revenue generated from the tax would be used for alcohol treatment and to combat drunk driving. Rep. Berceau joins us now as does the co-owner of the New Glarus Brewery, Deb Carey. First to you, Rep. Berceau. Hiking the cost of beer in Wisconsin is against the grain. Why take on a tax in the beer tax?

Terese Berceau:
I’ll mention, in Kentucky, bourbon is sacred, and they did raise the tax on it last year. I took it on because we are absorbing so much of the cost in the system. You and I and every taxpayer is absorbing the fact that we are 48th in the nation in terms of per capita health care costs that we're absorbing in our state taxes. It costs over $70,000 to clean up after a drunk driving accident. We, as you know, have incredibly bad statistics. We're highest in the nation on almost every indicator, such as binge drinking, binge drinking amongst college kids, the pregnant women drinking more than the national average. So the idea really was, we need to find a funding source because we can pass all the laws we want, but if we can't start addressing the problem, there's nothing that the laws are really going to do.

Frederica Freyberg:
How much would your tax raise?

Terese Berceau:
It would raise about $48 million. There are many people, frankly, who have said that I should try and raise it higher. Now, to make it clear, I am very willing to sit down with the small craft breweries and figure out what we do so that we don't impact them, because we did hear at the hearing about this roll-over, which I'm sure Deb will talk about. The roll-over effect in terms of what happens by the time the price gets to them. And I do want to talk about that with you and what we might do to change that in my proposal.        

Frederica Freyberg:
Because, Deb, what would an increase in the beer tax mean to your business?

Deb Carey:
It starts out as a nickel a bottle, which is not that much. The way our Wisconsin beer distribution is regulated is by the state. It's a three-tier system. We don't generally refer to it as a roll-over because our wholesalers and retailers are partners in our business. It's also important to Wisconsin that you have retailers that are checking IDs and things like that. But anyway, by the time you're done, it is a couple dollars at least a case. What it would mean to me is I paid about $150,000 in beer taxes alone. You know, it's important for everybody to know that actually brewers in Wisconsin pay the fifth highest tax overall of breweries in the nation. And while Terese is quite right that the beer tax alone is quite low, but we also provide jobs and things that many other states don't have as many breweries giving back to their community as Wisconsin does. But overall because we are actually in the state, you know, we pay property tax, which we're all well aware of, and income tax and things like that. But it would be an increase of about $800,000 next year, which certainly is quite a bit of jobs and a little bit of a kick in the teeth for any of our economic recovery.

Frederica Freyberg:
So would it mean that you would have to cut jobs?

Deb Carey:
Well, I really am — my husband and I have always worked. And, you know, cutting people's jobs and hours I really wouldn't do, you know, unless I absolutely was on the verge of going out of business. But what it would mean is I would no longer — I've been adding jobs at a rate of five to 10 a year and that certainly would come to a halt. Any future construction, paving the parking lot, things like that, would end. All the things we’re trying to do for energy recovery. We have a state of the art sewage treatment plant. We want to put in solar panels. All of those things would go on the back burner.

Frederica Freyberg:
What about the economic argument about the impact of any kind of increase on a beer tax to the brewers, whether they're large or small?

Terese Berceau:
Well, this is where we need to get down to what is the absolute truth in terms of impact. For the viewer, I want to put it in perspective, that if my tax is implemented, just as my tax, and now I guess the phrase they use is roll-up, which is a phrase that people used in the hearing which we can discuss, but if you drink a six pack a day seven days a week, under my proposal you'd pay an additional dollar in taxes. Now, the brewers are saying that it's actually going to be more. But I have talked to the Department of Revenue. I've been working with them. And the issue really is that beer is only supposed to be taxed once. So if the beer producer is taxing, if that's supposed to be the point of tax, if the producer decides that they want to account — they don't want to affect their profit margin and they up it, that's for that — there's no more cost of production. It is a cost for them to maintain the profit margin they want and pass it on.

Frederica Freyberg:
Deb, go ahead.

Deb Carey:
Well, I think the thing is here is that Terese and I could probably, you know, discuss math all day and view brewers to death. But the fact of the matter is that I am an adult child of alcoholics, and I understand alcoholism. And my husband was a firefighter, full-time resident firefighter, before he was a brewer. And, you know, I have nurses in my family and, you know, I really do understand the impact of drunk driving. And so I just have some philosophical issues with this bill. I think Terese and I probably agree that it's the climate or culture for drinking in Wisconsin. You know, it's time to have a change. However...

Frederica Freyberg:
You just don't think it should necessarily be on the backs of people like you?

Deb Carey:
Well, I think that there are a lot — for one thing, it's driving under the influence. Like look at the representative that just got pulled over again and he's under the influence of pharmaceutical drugs. There's vodka that's in martinis. That's 40 percent alcohol. Beer is 4 percent. We are the beverage of moderation. Just because we're here and handy doesn't necessarily mean we should bear the brunt of it. But I think really what I'm speaking toward is that we are part of the solution. You know, that really is the thing. Craft brewers in the state of Wisconsin. They did a little economic study of my brewery construction, and we're impacting our local economy at a rate of about $65 million a year. You know, you'd be hard-pressed to replace us if you drive us out of business.

Frederica Freyberg:
Rep. Berceau, what about that?

Terese Berceau:
I have to stop you. First of all, you're not the beverage of moderation.

Deb Carey:
We are. Yes, we are.

Terese Berceau:
Well, you might be — national studies from — and I have everything cited on my Web site. I have researched this. I've had help researching it. I have national statistics. Beer is the drink of choice for binge drinkers and addicts. So to say it's a drink of moderation for people who...

Deb Carey:
Well, I would take to task that research.

Terese Berceau:
Fine. But I will cite it and everyone's welcome to go to my Web site. Now, I'd like an opportunity to respond because Deb is talking about me driving her out of business. I've already said I want to work with the small craft breweries. One of the reasons there's a wider spread in terms of people who are drinking beer is because of the craft breweries. It's not just, as many people have said, the blue collar drinker or whatever. Everybody across the spectrum is drinking. Craft breweries are very important to Wisconsin. But we don't have the highest number of micro-breweries here. There are more in other states with higher taxes. I just don't want to continually listen to this “I'm going to drive them out of business.” I've said I will work with them and figure out what we do. They're taxed at half the amount now. How many barrels do you brew?

Deb Carey:
We'll do probably 80,000, 85,000 this year.

Terese Berceau:
So 300,000. If you brew less than 300,000, 50,000 of those barrels are already only taxed at half of what other breweries are.

Frederica Freyberg:
We need so much more time for this, and we will have it. We will revisit this issue and have you both back. We'd like to do that. Deb Carey and Terese Berceau, thanks very much.

Deb Carey:
Thank you.

Terese Berceau:
Thank you.