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Sen. Cardin visits Heavy Seas microbrewery, talks taxes

By Julie Baughman, jbaughman@tribune.com

6:00 AM EDT, July 22, 2013

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Like many who have toured the Clipper City Brewing Company's Halethorpe brewery, the man in the dress shirt seemed to enjoy sipping on an ice cold glass of Heavy Seas' Powder Monkey Ale as he checked out the large, gleaming metal vats, walked past the bottling machinery and chatted with the brewery's founder.

But Maryland Sen. Ben Cardin was just trying to beat the heat during his Friday afternoon.

The July 19 visit was part of Cardin's "Made in Maryland" tour of small businesses throughout the state to show his support of locally-made products — and to discuss the Small BREW (Brewer Reinvestment and Expanding Workforce) Act.

Cardin, a Democrat, and Sen. Susan Collins, a Republican from Maine, introduced the bill in the Senate that is a companion to the HR 494 introduced in the House of Representatives in February. Sixteen senators have signed on as original co-sponsors.

If passed, the act would cut rates on excise taxes for small, craft breweries throughout the country in half, a change that would stimulate economic growth, Cardin said.

"We have a bill that we think is feasible," he said. "It cuts the tax in half, and allows you to have more dollars (in the bank)."

"Here's a company, in a tough economic time, spending millions of dollars, investing," Cardin said of Clipper City.

The company started brewing Clipper City beer in 1996 and has grown and evolved into a booming business.

The Small BREW Act would drastically cut tax costs, said Hugh Sisson, founder and managing partner at Clipper City, from $7 for every barrel of beer produced under 60,000 barrels to $3.50 per barrel produced under 60,000 barrels, a change that would save the company between $125,000 and $130,000 a year.

"That translates into either a new tank, or (new) people, but it all goes back into the company," said Sisson, a Towson resident.

As the popularity of his product grows, so must his brewing facility. Sisson has invested more than $3 million into improvements and upgrades over the past two years and plans to invest another $1 million in a new brew house by the end of 2014.

"By the time we finish this year, over the last two years, we will have purchased seven or eight new tanks, a new bottle filler and labeler, a centrifuge, a new filter, a new mill," Sisson said, in addition to more than $250,000 in new lab equipment and a new, 25-foot-high walk-in cooler to store the beer as it ages.

He said the money saved from the proposed tax cut would be a critical in helping to grow the craft beer industry.

"The big guys are flat to down," Sisson said of growth in large beer producers such Anheuser-Busch, MillerCoors and Pabst, the three largest American breweries. "The craft beer growth is replacing the money that they're losing.

"Creating a differential on the excise tax...certainly helps a little to level the playing field," he said.

Tom Creegan, a partner at Brewer's Art, a Baltimore-based microbrewery, compared the jump in craft beer popularity to that of designer coffee drinks a few years ago.

He said that 20 years ago, anyone who walked into a bar would expect to see only standard beers: Budweiser, Coors and Miller. Now, people expecting craft beer in and they want a variety of choices.

"It's almost like a generational shift," Creegan said. "Now it's just the norm."

He said his company would also greatly benefit from the tax cut provided by the Small BREW Act.

"Everyone in our business is trying to expand as much as possible right now," Creegan said. "It's all about growth.

"It's just us, and we're putting it back into the business," he said."

Sisson said that, if the bill doesn't pass this year, he hopes it will in the near future.

He said Cardin has always been a big supporter of both Clipper City and craft brews in general.

"Ben Cardin has always been in the small brew camp, the small business camp," Sisson said.

Cardin was present when Sisson ceremoniously tapped his first keg of beer in 1996 and praised him on his business savvy and his contributions to the community.

"I do remember when we tapped that first keg," Cardin said to Sisson Friday. "You took a huge risk.

"You have added greatly to the economy and to our quality of life," he said. "I'm proud of what we can do in our own state of Maryland."