Proposed tax changes could force Oregon beer, wine prices to skyrocket

Oregon brewers and vintners could see a dramatic rise in the cost of doing business if a new bill making its way through the state legislature passes.

Oregon House Bill 3296 seeks to increase the state’s beer tax by 2,800% and wine tax by 1,700%. Officials in Oregon’s wine industry say the bill would result in a $2 or more price increase on every bottle of wine sold in the state. Beer and cider could see even bigger jumps.

Oregon has become a hub for the beer and wine industry. At the end of 2019, the state was home to 908 wineries and 1,297 vineyards, according to the Oregon Wine Board. It’s considered by many the best region in the country for Pinot Noir wines.

Most of the wineries are small, though, with 75% producing fewer than 5,000 cases per year, and industry advocates say the astounding leap in taxes would force many of them to close.

The Brewers Association says 311 craft breweries were operating in the state at the end of 2019. And many, such as Portland’s Great Notion, are critically acclaimed.

The pandemic has hit both industries hard, though. Wine tasting-room sales in the state are down 80% since the start of the pandemic. And dozens of breweries have been forced to close.

Supporters of the bill say the tax increase—and accompanying retail price uptick—will reduce underage and binge drinking. The tax money will be invested in treatment and recovery programs.

“Closures due to COVID-19, coupled with the unprecedented wildfires this fall, have had a devastating impact on Oregon’s breweries, wineries, cideries, distilleries, restaurants, bars, and hospitality sector,” said the Oregon Brewers Guild in a statement. “The last thing these local businesses need are the unprecedented tax increases proposed in the House Bill 3296.”