Oregon breweries worry alcohol tax hike would cost jobs; bill backers disagree

Supporters claim proposal would create 1,000s of jobs in addiction treatment

BEND, Ore. (KTVZ) -- On Tuesday, House Bill 3296, known as the Addiction Crisis Recovery Act, was introduced in Salem. And like many bills this session, it's already resulting in intense debate over its potential positive or negative impacts.

Supporters say it will reduce harmful underage and binge drinking by raising the wholesale price of all alcohol by 20%.

"Teenagers have less money to spend on alcohol, so the minute you raise the price they are going to buy less, and the same is true for binge drinkers," Mike Marshall of Oregon Recovers said Tuesday.

According to the group, a similar model in Maryland, which increased prices by 3%, resulted in a 26% decline in underage drinking and a 17% decline in adult binge drinking.

"According to the Oregon Health Authority on Friday, we have an alcohol problem too, that excessive alcohol drinking is costing the state economy $4.8 billion annually," Marshall said.

Oregon Recovers says the money raised from the taxes will be invested in more than 2,000 treatment and detox beds and about 3,000 outpatient openings, creating more than 5,000 jobs across the state.

But those in the alcohol industry say it could be very detrimental to them.

Christina LaRue, executive director of the Oregon Brewers Guild, said, "It's disappointing enough to hear of any tax increase during a pandemic, but you put that on top of an industry that is one the hardest hit during the last 12 months, and you're looking at devastating effects, if this were to pass."

According to Oregon Recovers, the bill would result in, on average, a 21-cent retail price increase in the price of a 12-ounce beer, a 31-cent price hike for a glass of wine and an 18-cent increase for a cocktail.

"When you raise prices, then people buy less, and therefore every brewery has to cut expenses, which means jobs," said Deschutes Brewery President Michael LaLonde.

"When we struggle through COVID, most craft breweries, they sold 60 percent of their product through their tasting rooms and bars and restaurants. With those being shut down, there's been huge losses in employment in craft breweries already," LaLonde added.

But Mike Marshall disagrees.

"I would argue that it would create jobs in the restaurant industry," he claimed. "Because if the economy is growing as a result of alcohol not having adverse impacts on the economy, you're going to see more people going out, more people drinking -- moderately. "

The Oregon Beverage Alliance, which has launched a petition in opposition at https://donttaxmydrink.org, issued this statement:

"This appears to be the single largest beer, wine and cider tax increases ever proposed. If the goal is to kill the Oregon beer, wine and cider sectors, this bill is a great start. Beer, wine, cider and spirits are an essential part of Oregon’s economy and identity. House Bill 3296 would eliminate these local jobs with a nearly 3,000% tax increase on beer and cider and almost 2,000% tax increase on wine at a time when these businesses are battling a pandemic recession. This is tremendously insulting and would be an unprecedented blow to a sector that has put Oregon on the map."