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Schumer, in Buffalo visit, pushes tax-cut bill to boost craft-brewing industry

Sen. Charles E. Schumer stopped at Pearl Street Grill & Brewery on Tuesday to detail proposed tax-cutting legislation that would boost Buffalo’s burgeoning craft-brewing industry.

“Small breweries throughout Buffalo, like Pearl Street Grill & Brewery, not only brew great beer, they also pour jobs into the community,” the New York Democrat said.

“By cutting taxes for these small businesses, we can help breweries buy new equipment and hire more people to boost business, and truly allow them to capitalize on the growing craft beer culture in Western New York.”

Under the Small BREW (Brewer Reinvestment and Expanding Workforce) Act, the current excise tax rate of $7 per barrel would be cut to $3.50. The tax applies to the first 60,000 barrels brewed each year.

Schumer joined Earl Ketry, owner of the Pearl Street and Pan-American breweries; Ethan Cox, owner of Community Beer Works; Tim Herzog, owner of Flying Bison Brewing Co.; Jeff Ware, owner of Resurgence Brewing on Niagara Street; Matt Kahn, owner of soon-to-be-opened Big Ditch Brewing on Ellicott Street; and Doug Swift, owner of RiverWorks Brewing Co.

Pearl Street produces 2,800 barrels of beer annually, according to Ketry, who hopes to boost that number to 3,500 barrels. In addition, Ketry said, Pearl Street employs 325 workers.

Under the Small BREW Act, the brewery would save more than $9,800 per year in excise taxes.

“Sen. Schumer’s legislation not only gives a boost to our business, it also helps lift the entire Buffalo economy,” Ketry said. “Every dollar we can save in federal excise tax we can reinvest in hiring more employees and growing our business.”

Herzog, a veteran of the craft-brewing scene, described the small-brew industry as a capital-intensive business for a number of reasons.

“The equipment is expensive, employees must be specifically trained to work in a brewery, and fresh brewing ingredients can break the budget,” Herzog said. “When you add sales tax and excise tax on top of that, it’s tough to keep the doors open.”

Craft brewers also would be getting a shot in the arm from the state budget proposed Tuesday by Gov. Andrew M. Cuomo.

To increase the availability of locally grown hops for the state’s growing craft-brew industry, the spending plan would continue $40,000 for a program to evaluate and test hop varieties throughout the state.

As of last summer, there were 131 licensed breweries in New York State. More than 100 are microbreweries, defined as having an annual production of less than 15,000 barrels.

Nationally, according to trade publication Beer Marketer’s Insights, barrels shipped have more than doubled in the last decade. Craft beer now makes up nearly 7 percent of the U.S. beer market.

The Small BREW Act also would cut the tax by $2 on the next 1,940,000 barrels produced.

Ware, a native of Orchard Park, is opening Resurgence Brewing in a former factory at 1250 Niagara St.

“As a startup brewery, we have limited resources,” Ware said. “Cutting the excise tax would put money back in our pocket that we can spend on equipment and staff. This is what we need to grow our business.”