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Beer Today, Gone Tomorrow

Kelly Phillips ErbJuly 14, 2011

And dying in your beds, many years from now, would you be willin’ to trade ALL the days, from this day to that, for one chance, just one chance, to come back here and tell our enemies that they may take our lives, but they’ll never take… OUR BEER!

Okay, that was really from Braveheart. And I might have changed it a little bit. But said with a Minnesotan accent, you can imagine exactly how folks in Minnesota are feeling just about now.

You see, Minnesota is in the 14th day of a government shutdown. There’s simply no agreement on a budget. So, Gov. Mark Dayton (D) and the GOP-controlled legislature continue to hammer away at each other.

But that’s about that’s going on in the state. Twenty two thousand state employees have been furloughed. State parks are closed. Road construction projects have stopped. In fact, most non-emergency services are closing up shop. Those services considered critical, such as state police, prisons and nursing homes, remain open only by court order.

It’s dire.

And just when you thought it couldn’t get any worse, the state might be running out of beer.

Horrors!

The first nail in the beer coffin involves MillerCoors brewing company. The beer giant, which is as it sounds, a venture between SABMiller and Molson Coors, will be required to pull its beers from every restaurant, bar and liquor store in the state because they did not renew their brand label registration before the shutdown. Without a registration, they may not legally distribute or sell beer in the state.

For its part, the company claims they made an attempt to renew their registration but overpaid their fees. By the time they tried to make the correction, the shutdown had already started. The result? The application wasn’t processed.

What does that mean for beer drinkers in the state? MillerCoors claims a whopping 38% share of the beer market in the state. That’s a lot of empty shelves in the next few weeks if the government doesn’t re-open for business.

Fellow beer manufacturer Anheuser-Busch faces a similar fate in a few months if the shutdown rolls on.

And it’s not just brewers that have this problem:  bars and restaurants across the state did not get their paperwork processed before the shutdown. Without the proper papers, they can’t buy beer and hard liquor from wholesalers. The result? Empty coolers. And consequently, empty seats.

It gets worse. The state is no longer issuing tax stamps which allow for the retail sale of cigarettes. Without the stamps, retailers may not sell cigarettes.

No more beer and cigarettes? Is it just me or are you suddenly very afraid of the state of Minnesota?

I’m not a smoker but I am partial to an occasional beer (unless you’re my mother in which case, I’d like to reiterate that the beer that was in my fridge was, as I explained, simply for washing my hair), so I feel for the folks in the state. I think this is a classic example of those in government forgetting how their actions affect taxpayers.

As the shutdown continues, it’s easy for those in suits in the capital to talk a big talk about what’s best for the state. But what about the little things? It’s summer. What happened to cracking open a cold beer during a Twins game (see, I didn’t even gloat about my first place Phillies)? Or having a cigarette after a good meal if that’s your thing? Nope. You can’t wander down to the park. Heck, until a few days ago, you couldn’t even go to the zoo.

What makes it okay for the Governor and the legislature to hold its own state hostage?

The irony of the whole mess is that this is the equivalent of shooting yourself in the foot. All this talk about how best to raise revenue? How about keeping businesses open? The state is losing dollars by the day with the shutdown.

How much exactly? Minnesota takes in more than $600 million per year in state sales tax from the leisure and hospitality industry alone. Additionally, the industry employs more than 235,000 workers, which works out to nearly 5% of the population – not a number you want to see on the unemployment rolls.

And although a summer shutdown seems like a safe bet for those fighting over the budget in St. Paul, consider this: the number of tourists who travel to the Land of 10,000 Lakes is nearly five times the total population of the state. Tourism generates more than $25 million in gross receipts/sales per day in the state. But with no parks open and restaurants and bars shutting down by the day, Minnesota’s appeal as a tourist destination may be dwindling. The financial impact could be significant for the long term.

I get that there are some difficult choices to be made. But allowing the state to lose services by the day as a result of refusing to act is simply disgraceful. The people of Minnesota deserve better. Quick, someone pass them a beer!

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Kelly Phillips Erb
Kelly Phillips Erb is a tax attorney, tax writer, and podcaster.
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Anheuser-Busch, beer, government shutdown, MillerCoors, Minnesota

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