EagleTribune.com, North Andover, MA

New Hampshire

January 15, 2013

Beer tax plan raises border war concerns

Proposal would increase beer tax 33 percent

Opposition is brewing to a bill in the Legislature that would hike the state beer tax by 33 percent.

Reps. Charles Weed, D-Keene, and Richard Eaton, D-Greenville, proposed increasing the tax from 30 to 40 cents per gallon to raise an estimated $4.3 million for prevention and treatment of alcohol abuse.

Brewers, distributors and grocers are concerned House Bill 168 could hurt their sales and the New Hampshire economy, negatively affecting consumers, the workforce and state coffers in unintended ways.

They warn the big tax increase would cause cross-border shoppers who use stores in Southern New Hampshire to consider reserving their spending for back home in Massachusetts, a blow to both supermarket chains and mom-and-pop businesses.

“The real threat is to jobs and the economy long term,” said Scott Schaier said, executive director of Beer Distributors of New Hampshire. “This is bad timing and bad for business.”

Officials in the neighboring states of Massachusetts, Vermont and Maine are probably salivating over this bill, Schaier said.

“This means more money will be coming to their coffers, not ours,” he said.

The beer tax is 11 cents a gallon in Massachusetts, 35 cents in Maine and 27 cents in Vermont.

John Dumais, president of the New Hampshire Grocers Association, said grocers get 50 to 60 percent of their business from neighboring states so a beer tax increase is concerning to them.

Consumers, worried about the economy and their jobs, could choose to refrain from spending or spend out of state, Dumais said.

That would hurt New Hampshire grocery stores that might then decide they can’t expand or hire, he said.

“It would be a downward spiral,” Dumais said.

The tax hike could be a blow not just to a large brewer like Anheuser-Busch in Merrimack, but also microbreweries and craft brewers — and the tourist trade they attract. Portsmouth is home to two popular craft breweries, Smuttynose and Redhook.

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