As you can imagine, alcohol laws in the United States are very strict, highly controversial and extremely wonky. Sadly, a significant amount of today’s alcohol legislation has deep roots to the post-Prohibition Era, making many alcohol laws irrelevant and simply stupid. But, as with many idiosyncrasies in our government, some of these stupid laws are still enforced — and for the life of me I will never understand why. (Disclaimer: These statements represent my opinion and my opinion alone).
For the most part, alcohol regulation and taxation is up to the States and the Federal Government stays out of the conversation. Each state has its own laws, system for regulating alcohol, and enforcement agencies. And even though California is more “lenient” than many other states in this union (don’t even get me started on bigotry in the South…), it is still subject to a lot of controversy when it comes to alcohol regulation and taxation.
The latest topic of debate is aging beer in barrels that previously housed spirits. Although wine and beer are often taxed and regulated similarly, spirits are considered to be an entirely different segment of the alcohol industry and are taxed much higher. Because barrel-aged beers receive some of their flavor from the alcohol in the wood, some believe that they should be considered distilled spirits and taxed accordingly — which makes very little sense when you think about it.
When evaluating the volume of individual ingredients in the finished product, distilled spirits make up a significantly small portion of the overall mass of the beer. It’s equivalent to a brewer adding vanilla extract to flavor a beer and the ABC taxing the beer as a spirit because a fraction of its overall recipe includes trace amounts of alcohol. I know this is a gross exaggeration, but you get my point.
Lucky for me and my fellow California-based barrel-aging brewers, the CA government agrees. On Friday July 13th, Governor Jerry Brown signed AB 1812 (Chesbro D-Arcata), a bill that ensures beer aged in used wooden barrels will continue to be taxed, licensed, regulated and labeled as “beer” throughout California. The bill was sponsored by the California Craft Brewers Association passed both chambers of the Legislature unanimously.
AB 1812 will provide clarity that beer aged in re-purposed empty wooden barrels will continue to be defined as beer.
“This is a very important bill to the growing craft beer industry in the state,” said Tom McCormick, Executive Director of the CCBA. “California craft brewers have become literally world renown for their unique interpretation and adaptation of ageing beers in wood barrels. AB 1812 will ensure that this exciting brewing process will continue to thrive.”
California’s craft beer industry has gained worldwide acclaim for their use of wooden barrels to age craft beers. These empty wooden barrels are expensive and are typically recycled by craft brewers from previous use by the wine or distilled spirits industries. The re-purposing of these empty wooden barrels imbues unique character and complex flavor profiles to the beer.
“This bill is common-sense legislation that will allow California’s craft brewers to continue to grow their businesses creatively, adding jobs and providing a bright spot in the state economy,” said Steve Wagner, president of Stone Brewing Co.
There are currently over 290 craft brewers in the state. The craft brewing segment has grown consistently despite the overall beer industry being down in recent years. Last year craft beer sales grew 13% nationally with similar growth reported in California.