A Brewing Controversy?: Incentives for New Belgium in NC

Asheville Plan Schematics from Beer Pulse

Tony Magee, owner of Lagunitas, tweeted a potentially inflammatory message (if you’re sensitive to that kind of stuff) regarding incentives that New Belgium is receiving from the local government of Asheville, NC to build their new brewing facility:


Whoa.

This is a topic on a lot of people’s minds. In fact, Beer Advocate just had an article devoted to it (Issue #66, “Location, Location, Location.”)

In the article, the author states

Sierra Nevada was awarded $3.75 million in Henderson County tax incentives and more than $1 million in state grant money. The city of Asheville put up $3.5 million in tax incentives and $500,000 in local infrastructure to entice New Belgium, and the state also gave the company a $1 million grant.

All of this information brings up an intriguing question; should governments give huge tax incentives to non-local, large craft brewers to move into town? (I’m not even going to get into the discussion of whether or not Sierra Nevada or New Belgium are “craft” based on their size; that’s for a different day). What about those local brewers who have been supporting and investing in the community since they started up? Franz Charen, director of the Asheville Grown Buisness Alliance states:

Oftentimes we feel that we need to look at the subsidies to bring in large corporations and companies, and balance that with our current locally owned businesses, which probably have a greater impact on our local economy. When a business comes in from the outside, they often take money from that community and invest it elsehwere. That is the risk any community runs when it brings in any large business.

Another blow according to the article is that local craft breweries are levied with a 61.7 cents-per-gallon alcohol tax. It seems pretty unfair to give an out of town company huge breaks, when you’re killing your local companies with taxes.

First off, if I was a local brewer who had been in the local scene all along, supporting the industry there and paying taxes, I’d be upset. Hell, I’d be livid. What gives them the right to give away tax incentives to out-of-towners, especially when those out-of-towners probably have plenty of money to foot their own bill and weather higher tax rates? Shouldn’t the job of local government be to prop up and support the people of that locality? It seems they would be better served (and better serve the people) to promote local businesses, to keep as much money in their city/state as possible.

On the other hand, you can see why a small(ish) local government would want a successful, established brand to move in. People already identify Sierra Nevada & New Belgium as good brands, and there is safety there in buying a product that people know, guaranteeing some tax revue to be produced. A smaller, local brewer may not have the reputation that the bigger guys (and gals) have, so success may not be a guarantee. When giving money away, it does make a certain amount of sense to go for the surer bet and if Asheville doesn’t give them breaks they may take off to a city that will.

Mr. Mcgee brings up a whole other point of view; that by positioning for these tax incentives and grant money, Sierra Nevada & New Belgium have become just like the BMC mega-companies. He’s pretty much saying he has the money to expand without exploiting the local governments, so he knows that the others do too. (Well, money, and a bank loan that he Tweeted about later in the day). These tactics, to him, go against everything the craft beer movement stands for, and is essentially turning it into the beast that all craft brewers despise.

So, is he right? Well, honestly, I don’t know. I’m not sure how I feel about these giant expansions many breweries are undergoing. On the one hand, it’s great, because that earns more market share and exposure for the breweries that I love and support. On the other hand, hey, even Budweiser started small. Who knows where this road will lead us. We are definitely on the cusp of a new dawn in the craft beer world.

My opinion, for what it’s worth (or my preference, I guess) would be to see the local guys who have been supporting their communities all along get the breaks. Sierra Nevada & New Belgium can afford it, and extra incentives or tax breaks can help those smaller breweries possibly become the next Sierra Nevada, generating huge revenues and tourist money for the city or even state. I have to agree with Mr. Magee in the aspect that I’d like to see Sierra Nevada and New Belgium not take those incentives. I hope they will give a ton back to the community, but it’s toeing a gray area that I’m not so sure I’m comfortable with exploring.

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One thought on “A Brewing Controversy?: Incentives for New Belgium in NC

  1. Pingback: New Belgium Responds to Lagunitas | That Brew Dude

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