Craft brewing regulations hard to swallow

10 years ago

    Maine has a robust and growing craft brewing industry, which employs more than 1,200 people. Our state is home to nearly 50 breweries producing quality beer from Bangor to Bar Harbor, Portland to Skowhegan, Biddeford to Whitefield and many communities in between. This growing industry has the potential to create even more new jobs in the future.

    Yet, many small brewers are concerned with a proposed rule by the U.S. Food and Drug Administration (FDA) that they say could threaten this promising industry by unnecessarily increasing costs.

    The FDA has proposed changing the way small brewers handle what are known as “spent grains.” This is the leftover product after a brewer heats grains to extract sugar, protein, and other nutrients that are used in the beer-making process. This waste serves no useful purpose for the brewer. For centuries, rather than throw this product away or haul it to a landfill, many brewers have sold or donated it at no-cost to local farmers to be used as feed for livestock. A recent study indicated that nearly 90 percent of spent grains produced by craft brewers around the country is used for animal feed. The FDA-proposed rule would effectively end this centuries-old practice.

    While I certainly recognize the importance of ensuring the safety of our nation’s food supply, this is a classic example of a solution in search of a problem.

    Sen. Angus King and I recently sent a letter to the FDA Commissioner outlining our concerns. The cost of compliance with the proposed rule would effectively prohibit brewers from providing spent grains to farmers for animal feed. These include costs to identify potential food safety hazards, estimate how likely they are to occur, predict how severe the effects would be, identify and implement preventive controls, monitor spent grains for any hazards, and develop a written recall plan. Inevitably, limiting a source of free, or nearly free, animal feed would mean additional costs also for the farmers who use spent grains.

    The effect of these additional requirements would be particularly pronounced among the small business owners who make up the American craft beer industry. Nationally, small and independent brewers employ more 108,000 full- and part-time employees, generate more than $3 billion in wages and benefits, and pay more than $2.3 billion in business, personal, and consumption taxes.

    As a member of the Senate Agriculture Appropriations Subcommittee, I raised this issue with Commissioner Margaret Hamburg during a hearing on the FDA’s Fiscal Year 2015 budget request. I am encouraged that she indicated that the FDA understands our concerns and that it will work to find a sensible and reasonable solution that benefits farmers and brewers alike.

    I have also introduced legislation in the Senate, cosponsored by Sen. King, which would provide an economic boost by reducing the excise tax on each barrel of beer brewed by small brewers. By reducing the amount of federal excise taxes that small brewers pay, our bill would help these businesses grow, prosper, and create more jobs. One national study found that our proposal would increase economic activity by $1 billion over five years, create 5,000 new jobs in the first year to 18 months after passage, and create approximately 400 new jobs annually thereafter.

    Maine is proud of its thriving beer-making industry. It’s critical that Washington do all it can to support the entrepreneurial spirit that drives innovation, economic growth, and most of all, creates new jobs.