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Beer kicks in over $1 billion to Utah's economy

Published June 4, 2014 6:00 pm

Revenue • A new report only measures the brewing business.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Beer does more than just quench your thirst, it's also big business.

In Utah, making, distributing and selling beer provides 10,600-plus jobs, generates more than $179 million in federal, state and local taxes and has a total economic impact topping $1 billion, according to "Beer Serves America," a report that offers a snapshot of beer business in the U.S.

Beer actually has a more powerful effect on the national economy.

In 2012, the U.S. beer industry put more than 2 million Americans to work, according to the report, commissioned by the Beer Institute and National Beer Wholesalers Association. Beer also contributed $246.6 billion to America's economy and generated $49 billion in local, state and federal taxes.

That means more than 40 percent of what consumers pay for a beer goes to taxes, "making taxes the most expensive ingredient in beer today," the report points out.

Summer is the busiest time for beer. In 2013, the 15 weeks between Memorial Day and Labor Day, beer and malt beverage sales topped $11 billion, making it one of the largest selling categories of all food and beverage channels.

As the popularity of craft beer increases in Utah, the impact of ales and lagers on the economy also will increase, said Peter Cole, co-founder of Squatters Brew Pub in Salt Lake City.

Since 1986, the number of craft brewers in Utah has grown from zero to 20, and more growth is expected.

"Most people would be surprised that the beer industry has such a direct economic impact on the state," said Cole. "I think about all the vendors we use. There are loads of companies on the list and we try to find local suppliers."

Cole said the report takes into account only the brewing business, not brew pubs.

"If you take the brewing industry and the brew pub industry, it is a massive number," he said, noting that the Utah Brewers Cooperative, which produces and operates Squatters and Wasatch breweries and pubs, employes 372 employees. When the new Wasatch Pub in Sugar House opens in August, that number will jump to 447 employees.

The growth of Utah's beer industry has come despite having some of the strictest liquor laws in the country.

Utah breweries and bars can only serve beer that is up to 4 percent alcohol by volume (3.2 by weight) on tap. (Higher alcohol beers can be served in bottles.)

Pubs that operate as restaurants and allow minors must pour beer and other alcoholic beverages behind a barrier, known as a Zion Curtain, to prevent minors from seeing the mixing and pouring.

And Utah brewers also are restricted from serving more than two drinks at a time — eliminating beer flights, which are a popular option in many other states.

Cole and other brewers say simplifying the laws — especially for tourists — could help improve Utah's image and the state's economic bottom line.

"So much of our revenue comes from tourism; anything we can do to simplify those laws would make it easier for people who are here for a short time," he said. "We want people who visit the state to have a good impression and have an enjoyable visit. But because of the clumsiness of the regulations, it's too easy to have a negative experience and report that to friends or family when they get back."

Sen. John Valentine, R-Orem, had not seen the "Beer Serves America" study when contacted Tuesday by The Salt Lake Tribune. But the lawmaker, who, more than any other legislator, has shaped alcohol policy in recent years, said he is concerned whenever there is an economic impact report that does not also contain the "negatives" to society and the marketplace.

"With alcohol, there are social costs: DUIs, intoxication, underage drinking, lack of productivity in the workforce," he said. "All those have costs to society that have to be calculated when we deal with a product. I'd have concerns if the study fails to recognize that aspect."

kathys@sltrib.com

Economic benefits of beer in Utah

Brewers and beer wholesalers • 41

Industry-related jobs • 10,630

Total tax contribution • $179,745,800

Total economic impact • $1,029,172,800

Source: "Beer Serves America" report