Abo

ut t

he D

istil

led

Spir

its C

ounc

il of

the

U

nite

d St

ates

Th

e D

istil

led

Spi

rits

Cou

ncil

of th

e U

nite

d S

tate

s (D

ISC

US

) is

a na

-tio

nal t

rade

ass

ocia

tion

repr

esen

ting

prod

ucer

s an

d m

arke

ters

of d

is-

tille

d sp

irits

sol

d in

the

Uni

ted

Stat

es. O

ver t

he y

ears

, the

Cou

ncil

has

serv

ed a

s th

e di

stille

rs� v

oice

on

polic

y an

d le

gisl

ativ

e is

sues

at t

he

fede

ral,

stat

e, a

nd in

tern

atio

nal l

evel

s.

Our

mem

ber c

ompa

nies

take

eve

ry s

tep

to e

ncou

rage

adu

lts w

ho

chos

e to

drin

k to

enj

oy b

ever

age

alco

hol p

rodu

cts

resp

onsi

bly.

Thi

s co

mm

itmen

t to

qual

ity a

nd s

ocia

l res

pons

ibili

ty h

as b

een,

and

will

co

ntin

ue to

be,

the

corn

erst

one

of th

e di

stille

d sp

irits

indu

stry

. In

dust

ry H

ighl

ight

s !

The

dist

illed

spi

rits

indu

stry

gen

erat

es $

95 b

illio

n in

U.S

. eco

-no

mic

act

ivity

ann

ually

. !

Ove

r 1.3

milli

on p

eopl

e ar

e em

ploy

ed in

the

Uni

ted

Stat

es

thro

ugh

the

man

ufac

ture

, dis

tribu

tion

and

sale

of d

istil

led

spir-

its.

!

Jobs

with

in th

e di

still

ed s

pirit

s in

dust

ry a

ccou

nt fo

r mor

e th

an

$28

billio

n in

U.S

. wag

es.

DIS

CU

S M

embe

r C

ompa

nies

!

Bac

ardi

USA

, Inc

!

Bar

ton

Inco

rpor

ated

!

Bea

m G

loba

l Spi

rits

& W

ine,

Inc

!

Bro

wn-

Form

an C

orpo

ratio

n !

Dia

geo

!

Impe

rial B

rand

s, In

c !

Luxc

o, In

c !

Moë

t Hen

ness

y U

SA

!

Pat

rón

Spi

rits

Com

pany

!

Per

nod

Ric

ard

US

A

!

Rém

y C

oint

reau

US

A, I

nc

!

Sid

ney

Fran

k Im

porti

ng C

o., I

nc

!

Sun

tory

Inte

rnat

iona

l Cor

p.

Di

stille

d Sp

irits

Cou

ncil

of th

e Un

ited

Stat

es

1250

Eye

Stre

et N

W

Suite

400

W

ashi

ngto

n, D

C 2

005

202.

628.

3544

ww

w.di

scus

.org

The

Fede

ral E

xcis

e Ta

x on

Bev

erag

e A

lcoh

ol

Incr

easi

ng th

e B

urde

n on

Con

sum

ers

and

the

Hos

pita

lity

Indu

stry

DIS

TILL

ED S

PIR

ITS

CO

UN

CIL

OF

TH

E U

NIT

ED

ST

AT

ES

Fede

ral E

xcis

e Ta

x on

Bev

erag

e A

lcoh

ol

Incr

easi

ng t

he B

urde

n on

Con

sum

ers

and

the

Hos

pita

lity

Indu

stry

Hos

pita

lity

Taxe

s pe

naliz

e re

spon

sibl

e, m

iddl

e in

com

e co

nsum

ers

!

The

Fede

ral E

xcis

e Ta

x (F

ET)

on

beve

rage

alc

ohol

is o

ne o

f th

e m

ost

regr

essi

ve t

axes

impo

sed

on a

ny A

mer

ican

con

sum

er p

rodu

ct.

!

Bev

erag

e al

coho

l ta

xes

disp

ropo

rtion

atel

y im

-pa

ct

low

er

and

mid

dle

inco

me

cons

umer

s.

Hou

seho

lds

with

les

s th

an $

50,0

00 i

n an

nual

in

com

e co

nsum

e ha

lf of

all

beve

rage

alc

ohol

in

the

Uni

ted

Sta

tes.

Inc

reas

ing

thes

e ta

xes

will

only

furth

er p

enal

ize

low

and

mod

erat

e in

com

e co

nsum

ers.

!

Six

ty-s

ix p

erce

nt o

f ad

ults

in

fam

ilies

with

an-

nual

inc

omes

bet

wee

n $3

0,00

0 an

d $5

0,00

0 en

joy

beve

rage

alc

ohol

. Fo

rty-n

ine

perc

ent o

f ho

useh

olds

w

ith

annu

al

inco

mes

un

der

$30,

000

cons

ume

thes

e pr

oduc

ts.

!

It is

som

etim

es b

elie

ved

that

mid

dle

and

low

er

inco

me

cons

umer

s ar

e pr

imar

ily b

eer

drin

kers

. H

owev

er, t

his

notio

n is

foun

ded

on e

cono

mic

ste

reot

ypin

g, r

athe

r th

an a

ctua

l res

earc

h. A

s th

e ch

art

abov

e sh

ows,

rou

ghly

the

sam

e po

rtion

of

spiri

ts,

win

e an

d be

er c

onsu

mer

s ar

e fo

und

in e

ach

in-

com

e gr

oup.

0.00

%

10.0

0%

20.0

0%

30.0

0%

40.0

0%

Win

eSp

irits

Beer

Prop

ortio

n of

win

e, sp

irits

and

beer

cons

umer

s in

hous

e-ho

lds e

arni

ng le

ss th

an $5

0,000

per

year

Bev

erag

e al

coho

l is

amon

g th

e hi

ghes

t tax

ed c

onsu

mer

goo

ds

!

Fede

ral,

stat

e an

d lo

cal

gove

rnm

ents

im

pose

sig

nifi-

cant

tax

es o

n al

coho

l pro

duct

s. T

he a

mou

nt o

f ta

xes

colle

cted

at a

ll le

vels

of g

over

nmen

t is

mor

e th

an d

ou-

ble

the

amou

nt o

f co

mbi

ned

prof

it ea

rned

by

com

pa-

nies

who

reta

il, d

istri

bute

and

pro

duce

thes

e pr

oduc

ts.

!

Dire

ct t

axes

on

beve

rage

alc

ohol

impo

sed

by fe

dera

l, st

ate

and

loca

l gov

ernm

ents

acc

ount

for o

ver o

ne-th

ird

the

shel

f pr

ice

of

dist

illed

sp

irits

, w

ine

and

beer

.

Thes

e ar

e pr

imar

ily e

xcis

e an

d sa

les

taxe

s.

!

Whe

n in

dire

ct ta

xes

and

fees

ass

ocia

ted

with

the

pro-

duct

ion

and

sale

of b

ever

age

alco

hol a

re in

clud

ed, t

he

tota

l tax

bur

den

acco

unts

for

mor

e th

an h

alf

the

pric

e th

at c

onsu

mer

s pa

y fo

r mos

t bra

nds.

$0.0

0

$10.

00

$20.

00

Spiri

ts

Beer

Win

e

$13.

50$6

.18

$4.8

6

Curre

nt FE

T rate

s pe

r pro

of g

allon

59%

Fede

ral E

xcis

e Ta

x on

Bev

erag

e A

lcoh

ol

Incr

easi

ng t

he B

urde

n on

Con

sum

ers

and

the

Hos

pita

lity

Indu

stry

Hos

pita

lity

jobs

and

bus

ines

ses

depe

nd o

n be

vera

ge a

lcoh

ol s

ales

!

The

natio

n�s

hosp

italit

y in

dust

ry �

res

taur

ants

, ba

rs,

hote

ls,

reta

il st

ores

and

the

like

� d

eriv

es a

sub

-st

antia

l por

tion

of it

s jo

bs a

nd s

ales

from

bev

erag

e al

coho

l. R

esta

uran

ts th

at s

ell d

istil

led

spiri

ts, w

ine

and

/ or b

eer,

for e

xam

ple,

ear

n on

ave

rage

mor

e th

an 2

5% o

f the

ir in

com

e fro

m a

lcoh

ol s

ales

.

!

The

beer

, w

ine

and

dist

illed

spi

rits

sect

ors

cont

ribut

e a

com

bine

d $3

50 b

illio

n to

the

U.S

eco

nom

y.

Man

ufac

ture

rs,

dist

ribut

ors

and

reta

ilers

dire

ctly

and

ind

irect

ly e

mpl

oy o

ver

3.7

milli

on h

ardw

orki

ng

Amer

ican

s.

Hig

h al

coho

l tax

es p

enal

ize

resp

onsi

ble

drin

kers

, not

abu

sers

!

Rai

sing

taxe

s on

bev

erag

e al

coho

l onl

y se

rves

to p

enal

ize

resp

onsi

ble

beve

rage

alc

ohol

con

sum

ers

and

does

not

det

er a

buse

rs f

or w

hom

taxe

s ar

e of

littl

e co

ncer

n.

The

Nat

iona

l Ins

titut

e on

Alc

ohol

A

buse

and

Alc

ohol

ism

, the

gov

ernm

ent�s

lead

age

ncy

on a

lcoh

ol is

sues

, rep

orte

d in

its

Janu

ary

2001

is

sue

of A

lcoh

ol A

lert

that

res

earc

h su

gges

ts t

he h

eavi

est-d

rinki

ng 5

per

cent

of

drin

kers

do

not

re-

duce

the

ir co

nsum

ptio

n si

gnifi

cant

ly i

n re

spon

se t

o pr

ice

incr

ease

s, u

nlik

e dr

inke

rs w

ho c

onsu

me

alco

hol a

t mor

e m

oder

ate

leve

ls.

Soft

econ

omy

is p

uttin

g se

vere

str

ain

on H

ospi

talit

y In

dust

ry

!

The

hosp

italit

y in

dust

ry is

the

seco

nd la

rges

t em

-pl

oyer

in th

e U

nite

d S

tate

s, p

rovi

ding

jobs

to o

ver

13 m

illion

wor

kers

. It

crea

tes

uniq

ue o

ppor

tuni

ties

for f

irst-t

ime

job

seek

ers,

min

ority

man

ager

s an

d sm

all b

usin

ess

entre

pren

eurs

. !

For o

ver a

yea

r, th

e in

dust

ry a

nd it

s em

ploy

ees

have

bee

n un

der

seve

re s

train

from

the

econ

omic

dow

n-tu

rn.

Sinc

e Fe

brua

ry 2

008,

hos

pita

lity

empl

oym

ent

has

drop

ped

by 4

21,0

00 jo

bs a

nd t

he r

ate

of

unem

ploy

men

t in

the

indu

stry

now

sta

nds

at 1

1.4

perc

ent a

ccor

ding

to th

e B

urea

u of

Lab

or S

tatis

-tic

s.

!

Rai

sing

taxe

s on

suc

h an

impo

rtant

and

ha

rd h

it ec

onom

ic s

ecto

r will

add

to th

e na

tion�

s un

empl

oym

ent r

olls

but

will

not

add

sig

nific

ant

tax

reve

nue.

Bev

erag

e al

coho

l tax

es b

y an

y na

me

or fo

r any

pur

pose

are

unm

ista

kabl

y �H

ospi

talit

y Ta

xes.

�

Exce

ssiv

e be

vera

ge a

lcoh

ol ta

xes

depr

ess

reve

nues

and

em

ploy

men

t !

Whe

n fe

dera

l ex

cise

tax

es o

n sp

ir-its

, be

er a

nd w

ine

wer

e la

st r

aise

d in

199

1, t

hey

gene

rate

d $2

.4 b

illio

n le

ss t

han

Con

gres

s fo

reca

st o

ver

the

succ

eedi

ng 5

-yea

r per

iod.

!

The

tax

rate

on

dist

illed

spi

rits

ex-

ceed

ed

the

poin

t of

�d

imin

ishi

ng

retu

rn�

afte

r th

e 19

91

incr

ease

. S

pirit

s sa

les

and

reve

nues

act

ually

fe

ll, a

nd it

took

10

year

s be

fore

they

re

gain

ed th

eir p

re-1

991

leve

ls.

!

Som

e ha

ve p

ropo

sed

that

the

bev

-er

age

alco

hol t

ax b

urde

n be

fur

ther

in

crea

sed

by a

djus

ting

Fede

ral

Ex-

cise

Tax

es fo

r inf

latio

n si

nce

1991

. If t

he d

isas

trous

pol

icie

s of

the

past

are

repe

ated

, eco

nom

ic m

od-

els

proj

ect a

loss

of 1

60,0

00 h

ospi

talit

y in

dust

ry jo

bs.

Spirits sales (millions of gallons)

1991

FET

Incr

ease

on

Spiri

ts R

educ

ed T

ax R

even

ues

and

Dim

inis

hed

Sale

s

Tax Revenues (millions of dollars)