millstreambrewing.com

This session of the legislature in Iowa is going to be a very scary one for us beer lovers. Its has already started off on the wrong foot. I was hoping that passing .08 last year would let our industry have a reprieve this year, but that is not what is happening at all.

Yesterday there was a demonstration on the capital in favor of Keg Registration. We here at Millstream do not like this idea. We distribute most of our beer ourselves and Keg Registration is going to be another burden (and cost) for us, and very likely will not curb underage drinking at all. Teenagers will just go buy case beer or hard alcohol instead. We favor education about alcohol, not restriction from it. Actually, if you read the non-baised scientific studies, you will find that underage drinking is actually decreasing in this country. But that is an issue for another day.

If that is not bad enough, check out this little bit of news courtesy of the IWBDA:

“Senator Veenstra (R-Orange City) introduced a bill (SF 2050) that proposes doubling the beer excise tax to $11.78 per barrel. The bill is in a Senate Ways & Means Subcommittee of Senators Putney (R-Gladbrook), McKinley (R-Chariton) and Seng (D-Davenport). It is likely that this bill will also be around for most of the session. The bill, or a different version, will be a “live round” this session.”

If you are in the district of any of these guys, or if the idea of doubling the beer tax upsets you, I’d suggest contacting them and telling them that raising the Iowa tax on beer (doubling it at that!) is not going to help anything. Here is the info:

Senator John Putney (R-Gladbrook) (Home) 641.473.2129
(Capitol) 515.281.3371
john.putney@legis.state.ia.us

Senator Paul McKinley (R-Chariton) (Home) 641.774.5784
(Capitol) 515.281.3371
paul.mckinley@legis.state.ia.us

Senator Joe Seng (D-Davenport) (Home) 563.391.1627
(Capitol) 515.281.3371
joe.seng@legis.state.ia.us

The tax on beer in Iowa is 19 cents a gallon, or .43 cents a case. That works out to be 11 cents a 6pack. That doesn’t sound like much, but in the competitive world of beer, margins are slim. Combined with federal tax, the tax on beer is .93 cents a case. We sold 1140 barrels of beer last year, and paid a total of 14,700 dollar in beer taxes. If this tax becomes law we will pay 21,400 in taxes for that same amount of beer. That means we will have to make 6000 more dollars just to break even here at the brewery, and we did not even manage to break even this year.

Raising prices higher for beer like ours will bring it over the 7 dollar a six pack mark. This can turn off potential buyers, and turn them over to relatively cheaper products. This ‘avalanche’ effect is very scary for us here in the small brewery business.

I will be writing them all of these senators a long letter this weekend, I suggest you do the same. Sin taxes are not the way to solve our budget problems in Iowa. They do little to curb the problems that they are ‘taxing’, and do much to make the lives of average people more expensive.

This is all a part of what we are calling the ‘back door to prohibition’. If you would like to read more here is a link to a large (30 page) .pdf document explaining it in detail. Its a MUST READ.

Aaron

Chris and I took last Thursday and Friday off to tour five breweries in Wisconsin. We had a great time. The first day we went to Huber Brewing in Monroe, Tyranena in Lake Mills, and The Great Dane in Madison. The second day we went up to Steven’s Point and saw the Steven’s Point Brewery and Central Waters Brewing Co.

Huber Brewing is one of the oldest breweries in the country. It was truly an enormous and amazing place. Started in 1848, it has been in Monroe for over 150 years. They are one of the last regional breweries making light lager beers at very reasonable price. I have often wondered how they managed to stay in business. It was clear when we went there that their business is really turning around. Their own brands, such Huber Bock and Berghoff, are lagging, but the recent closure of several other regional size breweries, such as Minnesota Brewing, has increased their contract business.

Big news to me was that Hans Kessler, the great but stubborn German Brewmaster, has retired. The new Brewmaster, Kristopher Kalav, was really pushing the brewery into new directions. They have installed a state-of-the-art canning line, that lets them do all sorts of sizes of can packages (like 24 packs). I saw plenty of canned beer in the warehouse that was destined for Canada. The have installed some very nice upgrades to their bottling line and brewhouse in the last year. Most importantly, they have gone from brewing once a week(!) to brewing 3 to 4 times a week. A vast improvement. We had an extensive tour. I was amazed at the number of rooms that brewery has ‘abandoned’. It obviously used to produce much more beer. I was equally impressed by the lab and the amount of quality control that they put into their product. Thinking about it, I can’t remember ever having a bad bottle of Huber beer! They are done with returnable bottles, selling most of them off to the Steven’s Point Brewery. People just don’t bring the bottles back like they used too, and the brewery was really losing money on it. Hopefully Wisconsin’s oldest brewery will be around for quite a while longer.
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The first batch of Johns Grocery White Ale is on tap. I compared it to a bottle of Stone City brewed beer, and was pleasantly surprised to find that they tasted nearly identical. But that is not what I was aiming for, I would like a beer a little closer to Hoegarten/Celis. So we are fermenting a second batch down stairs right now. I am fermenting it warmer, with a stronger culture of yeast. Also, I nearly doubled the orange peel/coriander. We’ll know in two weeks…

In the meantime we are still waiting on label approval. The ATF decided that White ale is wierd and demanded we submit a process approval form. I guess they want to know if we are adding orange flavored liqour to the beer like Smirnoff!! Well I wrote up the recipe, noting all the addition times of orange peel. We will see, I didn’t explain mashing or lautering… I sure hope someone at the ATF understands what those words mean!!

They are promising a speedy approval.. Hopefully we will have this beer in bottles by February.

Thurday and Friday Chris and I are taking a trip to visit some brewer friends in Wisconsin. I’ll be sure to give you a nice update of what we see up there.

Aaron

I had a bad restaurant experience this weekend. It shall go unnamed, but its a high end steak serving establishment in the Iowa City/Coralville area. We sat down to eat, and started to look at the menu. If you are like me, the first thing you do is flip the menu over, and look at the list of beers. If there is a bar in the restaurant, you might even walk over to it and glance at the tap handles. At this restaurant, there was nothing about beer on the menu. Then I saw they had a Wine list at the table. I flipped to the end of that, and was disappointed to see there was nothing about beer there, either. It was not a good omen of what was to come.

Finally the waitress came by and asked us what we would like to drink. I asked her what beers they had. She look at me like I was from another planet, and mumbled that they had ALL THE beers, domestic AND imported, and that if I wanted one, she could go all the way over to the bar and fetch me one. Now this place has a separate facility for the bar, like in hotel, so it really is a walk to go there. She made it sound like it would be a total hassle. I tried to get her to be more specific, but it was obvious that she really did not know what beers they had, and what a ‘micro’ beer was.

I caved in to expedience and got a bottle of wine. Its a shame, because everyone I was eating with was interested in beer, and would have preferred one. But we did not want to saunter over to the other side of the restaurant to figure out what was on tap or in bottles.

Its true that these restaurants make more on a bottle of wine, than on a bottle of beer. But what is also true, is that the customer is happy when he can get what he wants. I refuse to give in this haughtiness. I good piece of steak is a great match with, say our amber beer. As beer become more respected, these old restaurants will have to change their ways. I’m surely never going back to that place, and neither will anyone I was with.

Oh, and it was a bad omen. The food was tough and overcooked, and heavy on grease. I have never paid so much money for such awful food.

One more hint, this place has a great view of the Iowa River.

Well we had a good year, despite the crappy economy. For cash flow, it was basically break even. November and December were suprisingly good, which really helped us out. The numbers:
Year 2002 2003
total barrels of beer sold: 1078 1147
total barrels of root beer: 845 958

As you can see our root beer grew 12%. Wow! And we hardly promote it. In 2001 we made 1007bbls of beer, so we have been growing at 7% production-wise a year. Not as fast as I would like, but better than nothing! Or the fate of some of our fellow brewers in this state.