Oregon distillers clashed with recovery advocates during a legislative hearing on Tuesday over the creation of a marketing board.
House Bill 2976 would establish the Oregon Spirits Board to promote whiskey, vodka, gin and other Oregon-crafted spirits outside the state starting Jan. 1, 2025.
“It’s about economic development for the state and giving tools to small businesses to be successful,” Dan Jarman of the Oregon Distillers Guild told the House Revenue Committee. “The board’s focus will be growing businesses and creating jobs, increasing national and international brand Oregon visibility, establishing new distribution channels for premium craft spirits and bringing tourism dollars to the state.”
But opponents say it would promote alcoholism, which is a problem in Oregon. The state has the fifth-highest rate of alcohol addiction nationwide, according to a federal survey.
“Alcohol is a toxic, addictive carcinogen that has no public health benefits,” Tony Morse, policy director for the advocacy group Oregon Recovers, told the committee. “We don’t use public funds to promote tobacco consumption, and we shouldn’t use them to promote alcohol consumption.”
The board would be funded by a 13% share of the 50-cent surcharge levied on each bottle of spirits by the Oregon Liquor and Cannabis Commission. The surcharge, adopted in 2009 to help the state weather an economic downturn, contributes about $45 million every two years to the General Fund. A legislative revenue official at the hearing said the bill would mean that about $5 million every two years would be taken from the surcharge to fund the board.
Morse said the bill would prevent the Oregon Liquor and Cannabis Commission from adding more surcharges to spirits.
“This legislation will permanently exempt liquor made in Oregon from all additional surcharges,” Morse said. “This legislation permanently alters the statutory powers of the Oregon agency that is the third-largest source of revenue for the state.”
The liquor agency is considering adding another 50-cent surcharge to spirits, proposed by Gov. Tina Kotek. Together, the two taxes would add $90 million every two years, or $45 million a year, to the budget. Besides the tax, the Oregon Liquor and Cannabis Commission marks up the cost of spirits, doubling the price at retail. In total, alcohol generates about $180 million a year for the General Fund.
Recovery advocates support doubling the surcharge and distillers oppose it.
The Oregon Distillers Guild proposed House Bill 2976, and a bipartisan group signed on as chief sponsors: Democratic Rep. Rob Nosse of Portland, Republican Rep. Lily Morgan of Grants Pass, Republican Sen. Lynn Findley of Vale and Democratic Sen. Sara Gelser Blouin of Corvallis. Last month, the bill passed the House Economic Development and Small Business Committee on an 11-0 vote. If it passes the revenue committee, it will be considered by the Joint Ways and Means Committee, which crafts the budget.
Proponents of the bill say the spirits marketing board would be modeled after the Oregon Wine Board, which was established in state statute, and promotes Oregon wine worldwide.
“This (spirits) board would extend that to the spirit sector,” Kelly Woodcock, vice president at Westward Whiskey in Portland, told the committee. “We know that it will help grow tourism here in Oregon.”
Jesse Cornett, who said he’s a former bar owner and a person in recovery, countered that.
“There’s over a thousand wineries (in Oregon),” Cornett told the committee. “We have robust wine tourism. Distiller size and economic impact pale in comparison.”
Oregon is home to about 65 distillers with about 100 tasting rooms.
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