Thinking about Economic Development? Mull it over with a Beer.

by Erica Michel

Photo credit: nealhknapp.com

When legislators think about expanding jobs and their economies, most probably don't immediately think of their neighborhood brewpub. However, according to a recent report by the Leeds School of Business at the University of Colorado at Boulder and released by the Colorado Brewers Guild, they might want to think again.

The report found that the craft beer industry in Colorado was responsible for $446 million in economic activity in 2011. The industry generates 5,800 jobs in the state and $102 million in income. These jobs are often located in rural areas where other industries have been declining. The local breweries have also boosted Colorado's tourism industry. Colorado collects nearly $9 million from the Colorado beer excise tax, in addition to other business taxes the industry pays.

When speaking about the Colorado craft brewing industry, John Carlson, executive director of the Colorado Brewers Guild told the Denver Post, "Explosive growth [in the craft brewing industry] continues to have a huge economic effect on the state, with no signs of slowing down."

According to a 2009 report by the Connecticut General Assembly's Office of Legislative Research, some states regulate the craft or microbrewing industry separately from larger breweries. These laws determine how and where craft breweries may distribute and sell their beer and the amount they may produce to be considered a microbrewery. Microbreweries are generally defined as breweries that produce fewer than 15,000 barrels per year, although many states have a higher threshold for microbrewery status.

At least five states - Kentucky, Michigan, Minnesota, Montana and Wisconsin—offer tax exemptions for microbreweries. Wisconsin's exemption was the first in 1973. Interestingly, Colorado does not offer tax exemptions for microbreweries.

So what legislative actions do craft brewers say can help expand their industry? According to the Colorado Brewers Guild report, lower taxes and increased access to financing top the list, with access to distribution channels and brewing equipment also noted as important.