September 13, 2012

What Ales You: Sen. Collins visits breweries, finds out lawmakers can help


Susan Collins spent about two hours touring three Portland breweries last week

click image to enlarge

Rob Tod of Allagash and Sen. Susan Collins during the senator’s brewery tour.

Tom Atwell photo

While the U.S. senator from Maine did enjoy some beer at Allagash, Maine Beer Co. and Geary's -- nowhere near a full bottle at any one of them -- her primary purpose seemed to be to pick up some information about what is becoming a major business in Maine.

Part of what she learned is that federal tax policy can have a big effect on helping Maine businesses grow.

Both Rob Tod, founder of Allagash, and David Kleban, one of the founders of Maine Beer Co., said that federal legislation allowing accelerated depreciation on equipment was a major factor in allowing them to undertake major expansions.

Allagash did some major expansions within the past year, and within a week or so is going to begin construction on a new 75-barrel brewhouse located in front of its existing plant, where there is now a parking lot. A new parking lot will be built on the side of the Allagash plant closer to Riverside Street.

Tod told Collins that demand for the beer requires construction of the new brewhouse, and that the company plans to keep its current 38-barrel brewhouse in operation.

Allagash has also installed a new bottling system capable of bottling 10,000 bottles an hour, although it is running it at 5,000 bottles right now because that is as fast as the manual packers can keep up with it.

Maine Beer has also done some expansions in the past year, but the big news is that it has broken ground on a new brewery in Freeport, which is expected to be completed in March.

Alec Porteous, who works in Collins' Portland office, said two depreciation laws that Collins has supported for a long time have benefitted the local breweries.

One lets smaller companies write off up to $125,000 in equipment purchased this year rather than spreading it over time. The other lets larger businesses depreciate half of the expenses this year, and the rest must be depreciated over time.

"It is great to see how federal tax policy can help make Maine businesses grow," Collins told me and Hollie Chadwick of Yankee Brew News, the two reporters tagging along on the tour. "These breweries are great Maine businesses. Not only do they employ Maine people, but they help bring tourists to the state and improve the economy that way."

Accelerated depreciation is not the only federal legislation in which the brewers were interested.

Daniel and David Kleban said a federal stimulus program that had the Small Business Administration guarantee 90 percent of Maine Beer Co.'s start-up loans allowed them to get the business started.

David Geary said Geary's has also installed a new bottling system, which is more efficient, eliminates waste and improves the quality of the beer.

But he did not specifically tie that in with the accelerated-depreciation program. He was more interested in an excise tax bill that has yet to be approved.

"Let me tell you what the excise tax bill would do for me," Geary said. "It would allow me to hire a sales representative for (areas outside New England), and that would allow me to sell more beer and hire more people here."

"I'm on it," Collins replied immediately -- meaning that she is a co-sponsor of the legislation.

Porteous said later that the Brewer's Employment and Excise Relief Act would lower the federal excise tax for small breweries from $7 to $3.50 per barrel for the first 60,000 barrels of beer brewed each year, and from $18 to $16 for every barrel thereafter, up to 2 million barrels. This would save breweries up to $45 million a year, he said.

(Continued on page 2)

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