IDEAS home Printed from
   My bibliography  Save this paper

Beer Excise Taxes and the Craft Beverage and Modernization Tax Reform Act


  • Brester, Gary W.
  • McCullough, Michael
  • Atwood, Joseph
  • Graham Austin, Caroline


In December of 2017, the Craft Beverage and Modernization Tax Reform Act (CBMTRA) initially lowered Federal beer excise taxes for a period of two years. At the end of 2019, Congress extended the legislation through December 31, 2020. The Taxpayer Certainty and Disaster Tax Act of 2020 made the reduction permanent. The intent of the CBMTRA was to encourage investment in the craft (micro) brewing industry. We evaluate the ramifications of the CBMTRA on producers, consumers, and tax receipts, as well as quantify potential differential effects between the micro, regional, and macro brewing sectors. We also quantify the impact of excise tax reductions on input suppliers including barley, labor, non-labor, and equity capital providers. Although the per barrel excise tax reduction was supposed to primarily support the micro brewing sector, we find that the CBMTRA actually provided a larger benefit to the regional and macro brewing sectors.

Suggested Citation

  • Brester, Gary W. & McCullough, Michael & Atwood, Joseph & Graham Austin, Caroline, 2021. "Beer Excise Taxes and the Craft Beverage and Modernization Tax Reform Act," MSU Staff Papers 310391, Montana State University > Department of Agricultural Economics and Economics.
  • Handle: RePEc:ags:msaesp:310391
    DOI: 10.22004/ag.econ.310391

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    1. Victor J. Tremblay & Carol Horton Tremblay, 2005. "The US Brewing Industry: Data and Economic Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262201518.
    2. Olivier Bargain & Andreas Peichl, 2016. "Own-wage labor supply elasticities: variation across time and estimation methods," IZA Journal of Labor Economics, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-31, December.
    3. Caitlan Russell & Corne van Walbeek, 2016. "How does a change in the excise tax on beer impact beer retail prices in South Africa?," SALDRU Working Papers 162, Southern Africa Labour and Development Research Unit, University of Cape Town.
    4. Caitlan Russell and Corne van Walbeek, 2016. "How does a change in the excise tax on beer impact beer retail prices in South Africa?," Working Papers 573, Economic Research Southern Africa.
    5. Rojas Christian & Shi Tianji, 2011. "Tax Incidence When Quality Matters: Evidence from the Beer Market," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 9(1), pages 1-35, December.
    6. Caitlan Russell & Corne van Walbeek, 2016. "How does a Change in the Excise Tax on Beer Impact Beer Retail Prices in South Africa?," South African Journal of Economics, Economic Society of South Africa, vol. 84(4), pages 555-573, December.
    7. Christian Rojas, 2008. "Price Competition In U.S. Brewing," Journal of Industrial Economics, Wiley Blackwell, vol. 56(1), pages 1-31, March.
    8. Koen Deconinck & Eline Poelmans & Johan Swinnen, 2016. "How beer created Belgium (and the Netherlands): the contribution of beer taxes to war finance during the Dutch Revolt," Business History, Taylor & Francis Journals, vol. 58(5), pages 694-724, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stacey, Nicholas & Mudara, Caroline & Ng, Shu Wen & van Walbeek, Corné & Hofman, Karen & Edoka, Ijeoma, 2019. "Sugar-based beverage taxes and beverage prices: Evidence from South Africa's Health Promotion Levy," Social Science & Medicine, Elsevier, vol. 238(C), pages 1-1.
    2. Nelson Jon P. & Moran John R., 2020. "Effects of Alcohol Taxation on Prices: A Systematic Review and Meta-Analysis of Pass-Through Rates," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 20(1), pages 1-21, January.
    3. Ce Shang & Anh Ngo & Frank J. Chaloupka, 2020. "The pass-through of alcohol excise taxes to prices in OECD countries," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(6), pages 855-867, August.
    4. Jeff Luckstead & Stephen Devadoss, 2021. "Taste renaissance, tax reform, and industrial organization of the beer industry," Economic Inquiry, Western Economic Association International, vol. 59(4), pages 1702-1722, October.
    5. Ariel A. Casarin & Magdalena Cornejo & María Eugenia Delfino, 2020. "Market Power Absent Merger Review: Brewing in Perú," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 56(3), pages 535-556, May.
    6. Löffler, Max & Peichl, Andreas & Siegloch, Sebastian, 2013. "Validating Structural Labor Supply Models," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79819, Verein für Socialpolitik / German Economic Association.
    7. Don Freeman, 2009. "Beer in Good Times and Bad: A U.S. State-Level Analysis of Economic Conditions and Alcohol Consumption," Working Papers 0906, Sam Houston State University, Department of Economics and International Business.
    8. Dongling Huang & Christian Rojas & Frank Bass, 2008. "What Happens When Demand Is Estimated With A Misspecified Model?," Journal of Industrial Economics, Wiley Blackwell, vol. 56(4), pages 809-839, December.
    9. Arabsheibani, Reza & Kudebayeva, Alma & Mussurov, Altay, 2021. "Bride Kidnapping and Labour Supply Behaviour of Married Kyrgyz Women," IZA Discussion Papers 14133, Institute of Labor Economics (IZA).
    10. Kym Anderson & Giulia Meloni & Johan Swinnen, 2019. "Global Alcohol Markets: Evolving Consumption Patterns, Regulations, and Industrial Organizations," World Scientific Book Chapters, in: Kym Anderson (ed.), The International Economics of Wine, chapter 26, pages 671-712, World Scientific Publishing Co. Pte. Ltd..
    11. Pauline Affeldt & Elena Argentesi & Lapo Filistrucchi, 2021. "Estimating Demand with Multi-Homing in Two-Sided Markets," Working Papers wp1165, Dipartimento Scienze Economiche, Universita' di Bologna.
    12. Laurence Jacquet & Etienne Lehmann, 2021. "Optimal Income Taxation with Composition Effects," Journal of the European Economic Association, European Economic Association, vol. 19(2), pages 1299-1341.
    13. Hildegunn E. Stokke, 2021. "Regional payroll tax cuts and individual wages: heterogeneous effects of worker ability and firm productivity," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(6), pages 1360-1384, December.
    14. Stephan F. Gohmann, 2016. "Why Are There so Few Breweries in the South?," Entrepreneurship Theory and Practice, , vol. 40(5), pages 1071-1092, September.
    15. Johan F.M.Swinnen & Liesbeth Colen, 2010. "Beer Drinking Nations. The Determinants of Global Beer Consumption," LICOS Discussion Papers 27010, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    16. Charles J. Romeo, 2016. "Incorporating Prior Information into A GMM Objective For Mixed Logit Demand Systems," Journal of Industrial Economics, Wiley Blackwell, vol. 64(2), pages 336-363, June.
    17. Rolf Aaberge & Ugo Colombino, 2018. "Structural Labour Supply Models and Microsimulation," International Journal of Microsimulation, International Microsimulation Association, vol. 11(1), pages 162-197.
    18. Karen Mumford & Antonia Parera‐Nicolau & Yolanda Pena‐Boquete, 2020. "Labour Supply and Childcare: Allowing Both Parents to Choose," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(3), pages 577-602, June.
    19. Weiss, Christoph, 2020. "Preisbildung bei unvollkommener Konkurrenz," IAMO Discussion Papers 305467, Institute of Agricultural Development in Transition Economies (IAMO).
    20. Ryo Sakamoto & Kyle Stiegert, 2018. "Comparing competitive toughness to benchmark outcomes in retail oligopoly pricing," Agribusiness, John Wiley & Sons, Ltd., vol. 34(1), pages 44-60, December.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:msaesp:310391. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.