Your Guide to #MABeer is Here!

Mass Brewers Guild Launches New Mobile Application & Beer Trail Map Available for download on iPhone and Android

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Attention craft beer lovers - your next #MABeer is closer than you think. The Mass Brewers Guild, the state’s nonprofit organization that works to protect and promote the interests of craft brewers, has launched “Mass Craft Beer,” a new mobile application and beer trail map.

The free app, now available in iTunes and Google Play stores, includes every visit-able brewery across the Commonwealth in its passport program. Users can now carry their passport on their phone to tour, taste, check-in and never miss another stamp.

Features include: finding breweries near you via your geo location, check-in to breweries you visit and add them to your passport, earn rewards and merchandise by collecting stamps, get the latest event news with links to purchase tickets, create your own brewery tours with an interactive brewery map and directory, save your favorite beers to purchase later, and more. 

Mass Craft Beer launches just in time for the Mass Fermentational, the organization’s upcoming beer festival and fundraiser set to take place on Saturday, Sept. 16 on Worcester Common. The festival tab within the app holds the event map, food vendor information, parking details, the list of participating breweries and where to find them, along with what they are pouring at the event.

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“Massachusetts needed a beer trail map that could evolve and change as quickly as its craft beer scene,” says Katie Stinchon, executive director of the Mass Brewers Guild. “Consumers have been asking for an updated map of breweries, and brewers wanted a guide that could help drive traffic to their doorstep. This new mobile application does both.” To date there are 120 breweries across the Commonwealth with more than 30 in-planning slated to open before the close of 2017.

Paying homage to Massachusetts’ rich colonial history, app adventurers can earn ranks (private to major general) as they travel and explore MA craft breweries. Incremental badges are earned after visiting five breweries, and regions can be conquered after checking into 15 or more breweries from that part of the state. Collect all of the regional badges to earn the Beer Trail Commander Badge and a Mass Brewers Guild Prize pack which includes a pint glass, T-shirt and your name glorified on the Mass Brewers Guild website. Collect 100 stamps or more and have your name entered to win a beer dinner with Sam Adams’ Jim Koch, Harpoon’s Dan Kenary, and Night Shift’s Rob Burns. Five entries will win. The runner up will receive a private guided beer tour from City Brew Bus with 10 friends.

“Visiting our breweries is the best way to support the craft beer community in Massachusetts,” says Stinchon. “Breweries employ locals, drive traffic and tourism to the state and pour world-class craft beer to thirsty locals and travelers. We hope this new program helps craft beer lovers find their next favorite beer.”

The mobile application was developed by Brewers Marketing, and made possible thanks to the generous support of the Mass Brew Bros who assisted with data collection, Fat Basset Design who created all of the badge artwork, and to New England Label for financial support. Funds raised through the Mass Brewers Guild’s festivals, Power Beer Fest and the Mass Fermentational will help to launch and maintain this program.

For more information about the Mass Brewers Guild, visit MassBrewersGuild.org.

About the Mass Brewers Guild:
The Mass Brewers Guild is the state’s nonprofit organization and trade association that works to protect and promote the interests of craft brewers across the Commonwealth. Founded in 2007, by a group of committed and passionate brewers, the association is membership based, and open to all Massachusetts breweries licensed by the Federal Tax and Trade Bureau and the Commonwealth’s Alcoholic Beverages Control Commission.

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Follow the Hop

Four Star Farms, a second-generation family farm, is working to meet the demand of the growing hop market across the Commonwealth suppling more than 30 breweries with wet, whole-leaf and pelletized hops. 

Despite the fact that hops haven’t been a viable crop in New England since the 19th Century, the L’Etoile family in Northfield is looking to change that.

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Since 2007, at Four Star Farms, 17 acres of its 280-acre property have been dedicated to growing and harvesting budding green cones used to make some of Massachusetts most renowned liquid, beer.

While New England can be tricky for any farmer to grow anything -- extreme weather and unpredictable seasons being a large factor -- hops in particular are difficult to nurture in this humid and often rainy climate.

“Similar to tomatoes, hops are susceptible to mildew and insect pressures,” says Liz L’Etoile, director of sales and marketing at Four Star Farms. “They want a difficult combination of a desert like environment, yet a lot of access to water. The whole plant does not want to be wet, just the roots. You have to have a strong program in place to control for these challenges or the overall flavors, aromas and hop quality can be affected.” 

Four Star Farms offers their hops to brewers three ways; wet hops, which are picked fresh and need to be brewed with-in 24-hours, whole-leaf-hops which have undergone a drying process and pelletized hops which are ground and pelletized for ease of use and better storage.

Hops are a perennial plant which is a benefit to the L’Etoiles, which also grows sod and grain on its farm. However, as with any farming there is still a great risk. “We can’t harvest a hop plant until its second year, and it won’t be fully mature until year four,” says L’Etoile “So unfortunately, if there’s a high demand for a variety of hop that we don’t have, we can’t be as nimble as we’d like to be in that moment. We also won’t know the yields that we will get from a particular variety until we’ve invested four years of time and resources. We rely heavily on our brewing customers and our knowledge as farmers to hand select each variety we grow for the characteristics that we need.”

Shipping in wet hops from the West Coast is costly, and due to the work involved, only a handful of brewers in Massachusetts grow their own hops, namely Hitchcock Brewing Company in South Deerfield and Start Line Brewing Co. in Hopkinton, MA.

Four Star Farms harvests more than 12,000 lbs. of hops a year that are sold to 30 different breweries in the state of Massachusetts. They also supply breweries in neighboring states, Vermont and Maine.

Wormtown Brewing Co., in Worcester MA has been one of Four Star Farm’s biggest and longest customers, with their hops featured in every “Be Hoppy” batch brewed, a left coast style IPA.  

Abandoned Building, Aeronaut Brewing, Bone-Up Brewing, Exhibit ‘A’, Lamplighter Brewing Co., Medusa Brewing Co., People’s Pint and True West are among the breweries that will receive wet-hops this year from Four Star Farms. 

"We are grateful to be able to work with Four Star Farms and utilize ingredients in our beer that were grown and produced in the state in which we are operating," says Keith Sullivan, co-founder of Medusa Brewing Co.  "That makes these particular beers that we are doing even more special."

Newly Appointed Chair Gets a Taste of What It Takes to Run a Brewery

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Tackey Chan House Chair of Committee on Consumer Protection and Professional Licensure visits Barrel House Z with Massachusetts Brewers Guild members

 Joined by brewers from Moon Hill and Castle Island, Chairman Tackey Chan met with the Massachusetts Brewers Guild at Barrel House Z in Weymouth to discuss the challenges and successes facing the modern-day brewer.

“Craft beer is one of the fastest growing industries in Massachusetts with thirty new breweries slated to open this year alone,” said Katie Stinchon, Executive Director of the Guild. “However, the Commonwealth’s policies are made for a different era. We are grateful for the opportunity to share our story with Rep. Chan as he now takes the lead on craft policies that will directly impact our membership’s ability to thrive in Massachusetts.”

In the efforts of promoting license and franchise law reform, the Guild has elevated their presence by testifying during Massachusetts State Treasurer Debora Goldberg’s Alcohol Task Force meetings. This session, the House Bill 183 and Senate Bill 136 look to promote a level playing field for all craft brewers and empower them with the ability to make strategic business decisions.

Founded in 2007 by a group of committed and passionate brewers, the Massachusetts Brewers Guild, is a nonprofit that exists to protect and promote the interests of craft brewers across the Commonwealth. In 2016, there were 122 active brewers including 91 Farmer Brewers, 7 Manufacturing Breweries and 24 Pub Breweries.

Ryan Daigle, MBG Board members and head brewer at Moon Hill, Adam Romanow, co-founder of Castle Island, Russ Heissner, founder of Barrel House Z and Chair Tackey Chan talk about the booming craft beer industry in Massachusetts. 

Ryan Daigle, MBG Board members and head brewer at Moon Hill, Adam Romanow, co-founder of Castle Island, Russ Heissner, founder of Barrel House Z and Chair Tackey Chan talk about the booming craft beer industry in Massachusetts. 

Sending your craft beer abroad? Here is a tax benefit Uncle Sam wants you to use

By: Robert Babine
Edelstein CPAs

Thinking of selling your brew abroad? Did you know there are some tax benefits available for exporters?

Uncle Sam wants you to send your delicious American craft beer across the sea, so he made available to you a tax exempt entity known as the IC-DISC, which is relatively inexpensive to setup and maintain.

Intro to the IC-DISC

Its long name is the Interest Charge Domestic International Sales Corporation (IC-DISC). There are two types of IC-DISC entities: a commission agent and a buy/sell DISC. This article will focus on the commission only DISC as it is the simplest and often most cost effective. The commission only DISC acts as a commission agent on behalf of your business. It runs in parallel to your existing operating business and comes into play when your beer is exported. Even if you indirectly export your brew by utilizing a distributor, as long as you know your beer is going abroad, you may qualify for this tax saving opportunity.

What is the incentive and benefit?

By acting as an export agent on your behalf, the IC-DISC entity is entitled to a commission, which is a deduction to your main operating business at ordinary income tax rates. The commission received by the IC-DISC, which is tax exempt, is then paid out as a dividend to its shareholders. Therefore, the IC-DISC is converting a portion of your export net income subject to ordinary income tax rates to qualified dividend rates on the dividends being paid to its shareholders.

How do you determine the commission and dividend? There are two primary methods. The first method is 4 percent of the qualified export receipts and the second method, 50 percent of export net income. The first method is simple, a straight 4 percent on foreign sales. However, while the second method requires some more work, it often results in a higher commission paid to the IC-DISC and therefore more export income converted into dividends.

Illustration of the benefits

Pat is the owner of a brewery who wants to grow his brand abroad. At the advice of his accountant, he created a commission only IC-DISC entity. Pat’s current brewery is as an S-Corp. The beer Pat plans to ship abroad will be his flagship brew that is currently priced to yield a 60 percent gross profit margin. At the end of the year, Pat’s business had international revenue of $300,000.

First, we need to determine the commission to be paid to the IC-DISC. You can see from the table below that using the 50 percent method results in a commission amount of $90,000 which provides a much greater benefit versus the 4 percent method as illustrated below:

Second, because Pat’s brewery is an S-Corporation, the business income flows through to Pat. By utilization of the IC-DISC entity, you can see how a portion of his reported business income is converted into qualified dividends, however total taxable income remains the same.

You will notice that in total, taxable income is the same. But, business net income is subject to higher tax rates than qualified dividends received. Now, assuming Pat is in the highest tax bracket of 39.6 percent with a qualified dividend rate of 23.8 percent, his savings at the end of the day is:

Is it worth it?

At the end of the day, Pat saved $14,220, and this is assuming he is in the highest tax bracket! For most, if not all brewers, $14,220 is a lot of cash that can be put to good use. Also, remember this is a fairly cheap way to save cash with very little paperwork or effort.

There are other benefits as well. These include giving key employees or sales team members an ownership interest in the IC-DISC entity, motivating them to sell more abroad and grow those untapped markets. Or, you don’t want to take the dividend and rather keep the cash in your business. Not a problem: The IC-DISC entity can loan the proceeds back to the operating entity, effectively deferring tax. However, the IRS requires that you pay interest, but not to worry — the rates are low because they are tied to U.S. Treasury bills.

Bottom Line

If you are sending your beer or equipment manufactured here in the states to another country, it is worth looking into setting up an IC-DISC entity to reduce your tax burden. There are also more complex IC-DISC planning methodologies that may offer greater savings in cases where the benefits outweigh the additional costs as well. It is important to note that these vehicles cannot be used retroactively and need to be established as soon as possible to start utilizing and taking advantage of the savings offered.

This article was as originally published on Craftbrewingbusiness.com.


Robert Babine, CPA, a principal in the Boston accounting firm Edelstein & Company LLP, advises craft beer industry leaders, as well technology, retail, professional services, manufacturing and other privately held entities with complex accounting and operations issues.

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Punishing Innovation, the Entrepreneurial Spirit and the Consumer

By: Drew Brosseau
Owner of Mayflower Brewing Co.

Massachusetts residents have already shown their sentiments about increasing taxes on alcohol.

In the 2010 state election, the effort to repeal the state’s newly-imposed 6.25 percent sales tax on alcohol was the only ballot measure to prevail, and it was overwhelmingly backed by Massachusetts communities bordering New Hampshire.

As a brewery owner, I pay federal and state tax on the craft beer we produce. Increasing taxes at the state level would cause brewers to raise prices on the consumer, which would ultimately mean less beer bought by patrons, and a resulting loss of business for all those involved in the industry - craft brewers, barley farmers, hop growers, equipment and supply manufacturers, distributors, truck drivers, retailers, restaurants, and pubs. 

A higher tax burden would also stifle innovation by brewers and result in fewer products in the marketplace. Today, there are 122 breweries across the Commonwealth that employ nearly 3,000 locals and contribute to travel and tourism to our state. In 2014, according to the Brewers Association, Massachusetts craft beer had a $1.4 billion economic impact with brewers producing about 611,341 barrels. An additional 30 breweries are slated to open later this year, and the Massachusetts Brewers Guild reports that it is constantly fielding calls from towns and cities looking for entrepreneurs and brewers to bring a brewery or brewpub to their neighborhoods. 

The craft beer industry is helping to revitalize downtown communities and bring back manufacturing jobs. My company, Mayflower Brewing alone employs more than 25 locals at our brewery in Plymouth.

A higher taxed product will only send craft beer lovers across the borders to neighboring states. The consequence will be more businesses closed, more jobs lost, and less revenue collected in the form of income, sales, use and alcohol excise taxes. It is not effective way to encourage responsible consumption or to support a growing industry in Massachusetts.

Overconsumption of alcohol is a societal problem that has always existed.  But tax policy is not the appropriate way to change behavior.  Raising taxes will not prevent bad actors from consuming too much.  It will only punish responsible drinkers with higher prices.

Drew Brosseau is the owner of Mayflower Brewing Co. in Plymouth, MA and a board member of the Massachusetts Brewers Guild. The Massachusetts Brewers Guild is a nonprofit organization that works to protect and promote the interests of craft brewers across the Commonwealth. For more information, visit MassBrewersGuild.org.

 

Mass Brewers Guild Hosts First New Brewery Bootcamp

60 attendees sell out Conference to Learn from Experts 

Yesterday, at the Springdale Barrel Room in Framingham, MA, a crowd of 60 new breweries and breweries in-planning gathered at the "New Brewery Bootcamp," a full day seminar offered through the Mass Brewers Guild. 

The afternoon covered topics such as employee law, insurance risks, taxes, distribution, real estate leases, waste water management and more. Experts from Bowditch and Dewey Attorneys, Bernstein Shur Law Firm, Edelstein & Company CPAs, GHM Insurance, and Weston & Sampson shared their best practices and advice for navigating the industry. 

Co-founder of Jack's Abby Craft Lagers and Mass Brewers Guild treasurer, Sam Hendler, presented on the challenges of getting beer to market, and president of the Mass Brewers Guild and co-founder of Night Shift Brewing, Rob Burns, spoke candidly about his growing pains as an experienced brewer and entrepreneur. 

"This conference was born out of popular demand and a need in the Massachusetts craft beer industry," says Rob Burns, co-founder of Night Shift Brewing and president of the Mass Brewers Guild. "There are 30 breweries in-planning slated to open this year and we want to provide these budding entrepreneurs with the resources they need to remain successful, independent businesses. Opening a brewery is about more than brewing great beer." 

The sold out, ticketed event helped to raise $1,000 for the Mass Brewers Guild, a nonprofit organization that works to protect and promote the interests of craft brewers across the Commonwealth. Due to its success organizers say it will become a yearly program. 

To date, more than 122 breweries exist across the state and employ more than 3,000 locals. MA craft breweries drive traffic and tourism to the Commonwealth and pour world-class craft beer to thirsty locals and travelers. Massachusetts’ breweries are ranked among the best in the world, country and region, with accolades and awards being announced weekly.

For more information about the Mass Brewers Guild, or its upcoming events, visit MassBrewersGuild.org. 

 

Tips on Tap for Breweries on the Journey from Passion to Profit

Verrill Dana’s Breweries, Distilleries & Wineries Group Presents Tap Tips Podcast Mini-series

As the number of craft breweries across the country continues to grow, Verrill Dana’s Breweries, Distilleries & Wineries Group presents Tap Tips Podcast Miniseries to help brewers on the journey from passion to profit.

The Tap Tips Podcast Miniseries contains eight episodes to assist up-and-coming brewmasters and brewery owners to think critically about the issues affecting their business. These podcasts provide information and practical tips for navigating the various complex issues that may arise at any stage, from business formation to licensing to risk management.

This mini-series is part of Verrill Dana’s “Verrill Voices” podcast series, the next evolution of the firm’s longstanding efforts to keep business leaders up-to-date, which already include in-person seminars, webinars, email alerts, and blogs.

Episodes of the Tap Tips Podcast Mini-series can be found at www.verrilldana.com/taptipspodcast, in addition to on iTunes and SoundCloud

About Verrill DanaVerrill Dana, LLP is a full-service law firm conducting a nationwide practice from offices in Boston, Mass.; Portland and Augusta, Maine; Providence, R.I.; Westport, Conn.; and Washington, D.C. To learn more, visit www.verrilldana.com.

 

Mass Fermentational Tickets Now On Sale!

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“Mass Fermentational” Set to Take Over Worcester Common

Fresh off the heels of its successful Power Beer Fest, the Massachusetts Brewers Guild announces its second beer festival and fundraiser of the year, the Mass Fermentational.

Breaking tradition from its typical location, The World Trade Center in Boston, the fall festival is changing venues to the Worcester Common and expects to draw 2,500 patrons to the green on Saturday, Sept. 16 from 1 to 5 p.m. located at 455 Main St. Worcester, MA.

“We are excited to shift locations and offer a festival outside of Boston this year,” says Rob Burns, co-founder of Night Shift and president of the Massachusetts Brewers Guild. “There are craft beer fans in every corner of the state, it only makes sense to diversify and bring a great beer show closer to their doorstep. We are grateful to the City of Worcester for welcoming us and ready for another successful beer festival.” Discover Central Massachusetts and Provider Insurance are the events leading sponsors.

The Massachusetts Brewers Guild is a nonprofit organization that exists to protect and promote the interests of craft breweries across the Commonwealth. More than fifty breweries are expected to pour at the Mass Fermentational, which will raise funds to create educational and marketing programs for local breweries and support the organization’s government affairs work.

Participating Breweries Include: 3 Beards Beer Co., 3cross Brewing Co, Aeronaut Brewing Company, Amherst Brewing, Bad Martha, Barrel House Z, Battle Road Brewing Company, Bent Water Brewing, Big Alice Brewing, Big Elm, Bone Up Brewing Company, Boston Beer Works, Cape Ann Brewing Co, Castle Island Brewing Co., Clown Shoes Beer, Cold Harbor Brewing Company, CraftRoots Brewing, Down The Road Beer Co., Element Brewing & Distilling, Exhibit 'A' Brewing Company, Flying Dreams Brewing Co., Harpoon Brewery, Honest Weight Artisan Beer, Jacks's Abby Craft Lagers, John Harvard's Brewery & Alehouse, Lookout Farm Brewing & Hard Cider Co. Lord Hobo Brewing Co., Mast Landing Brewing, Medusa Brewing Company, Moon Hill Brewing Co., Night Shift Brewing, Riverwalk Brewing Co., Start Line Brewing, Tree House Brewing Co., Wachusett Brewing Company and Wormtown Brewery. (Brewery list is being updated regularly.)

Tickets are $45 for general admission and includes unlimited two-ounce beer samples from participating breweries. Non-drinkers who wish to enjoy the atmosphere and an afternoon with friends -- but are not sampling -- can purchase a Designated Driver Ticket for $10. Once inside the festival, patrons can purchase gourmet eats served up by several food trucks onsite; Big T's BBQ, Press’n It, Sabor Latino, Teddy's Lunch Box, Travelin' Bones BBQ and Trolley Dogs.

Massachusetts Brewers Guild events are organized by craft brewers for craft brewers. To date, more than 122 breweries exist across the state. Breweries employ locals, drive traffic and tourism to the Commonwealth and pour world-class craft beer to thirsty locals and travelers. Massachusetts’ breweries are ranked among the best in the world, country and region, with accolades and awards being announced weekly.

The Mass Fermentational is a 21+ event, no exceptions. Identification required at the door. No dogs allowed with the exception of certified service animals. To purchase tickets, visit MassFermentational.EventBrite.com.