Beverage Industry

Brewers Association revises 'craft brewer' definition

January 4, 2011

The Brewers Association, Boulder, Colo., announced its board of directors voted to change its definition of “craft brewer.” The term “craft brewer” now includes any independent brewery that produces up to 6 million barrels of traditional beer.

The association has replaced the designation of “small” in the definition and increased the production cap from 2 million barrels to 6 million barrels. It cited several reasons for the change, including the recognition that ‘small’ is a descriptive term relative to the overall size of the industry, it said.

“Thirty-four years have passed since the original small brewers tax differential defined small brewers as producing less than 2 million barrels,” said Nick Matt, chair of the Brewers Association board of directors and chairman and chief executive officer of F.X. Matt Brewing Co., in a statement. “A lot has changed since 1976. The largest brewer in the U.S. has grown from 45 million barrels to 300 million barrels of global beer production.”

The alteration of the definition of craft brewer will align with the association’s government affairs efforts, including its support of a bill to update the cap on an excise tax differential for small brewers to 6 million barrels each year in production for their first 2 million barrels in 2010, Matt said.

The industry’s largest craft brewer, The Boston Beer Co., is poised to become the first craft brewer to surpass 2 million barrels of traditional beer within the next few years, the association reported. The loss of the company’s production in craft brewing industry statistics would inaccurately reflect on the craft brewing industry’s market share, it said. Additional members of the Brewers Association also are on a similar growth trajectory to approach the 2 million barrel threshold, it said.

The craft brewed beer market share is approximately 5 percent of the U.S. beer industry. The association has a stated mission of helping America’s craft brewers achieve more than 5 percent market share by 2013.