Suppliers want taxpayers to pay for expired beer during Covid lockdowns
As the beverage and restaurant industry celebrates victories like better than expected sales and the July 1 Full reopening of New York CityLeisure and hospitality businesses, most bar and restaurant owners are still struggling to recover financially from the Covid-19 pandemic. Although they obtained direct relief from the American Rescue Plan Act of 2021 from the Biden administration in March, they and their supplier partners continue to push for the Hospitality and Commerce Jobs Restoration Act, 2021, including a lesser-known provision that would cover losses for food and drink they had to throw away in successive lockdowns last year.
A dozen congressional officials from both sides have signed on as co-sponsors of the bill over the past ten days, encouraging a newly formed advocacy group called the Perishable Food and Beverage Coalition, made up of 20 professional associations from the National Potato Council to the country’s three major organizations representing beer business interests.
“When the pandemic forced an abrupt halt last March, countless perishable food and drink items remained stranded in restaurants, bars, entertainment venues, sports arenas and more. As the closures continued, small businesses suffered significant losses in spoiled inventory that could no longer be sold or reused for charitable purposes, ”says coalition leader John Bodnovich, executive director of American Beverage Licensees, who its members include retail liquor dealers.
The coalition is reporting $ 900 million in losses from nationally unmarketable inventory. Additionally, wine, beer and spirits sales fell $ 74 billion in bars and restaurants from March to December 2020, compared to the previous year. This equates to 6.7 billion 12-ounce servings of beer; 3.3 billion 5-ounce glasses of wine; and 8.8 billion shots of 1.5 oz.
The perishable food and beverage provision allows affected businesses to benefit from a one-time 90% tax credit for food products that have deteriorated or expired due to closures between March 13 and September 30, 2020.
“As a result of the closures, breweries and other businesses in the food and beverage industry suffered significant inventory losses due to the lack of merchantable quality of food and beverage products that deteriorated, expired or did not fit. more for human consumption. The legislation aims to revive hospitality businesses like breweries as American consumers begin to return to regular business and leisure travel, ”writes Bob Pease, President and CEO of the Craft Brewery Group. of the Brewers Association.
Although some beer producers and distributors have taken draft beer back from retailers, most have remained scattered and stale throughout the system, sometimes for months. Breweries and wholesalers who accepted returns would then have marked it as a loss in their records, as they also could not sell it themselves, either in other places or in brewery coffee rooms. . Additionally, many of the country’s more than 8,000 breweries sell their own food and find themselves in the same position as their on-site retail partners any time sudden lockdown orders are issued.
The second round of Paycheck Protection Program (PPP) loans allow recipients to use the disbursements to repay themselves for non-market food and the $ 28.6 billion. Restaurant Revitalization Fund, which opens for applications on Monday, allows its grantees to use grant money for almost all Covid-related expenses. Plus, some critics say, hospitality businesses claimed a larger slice of the relief pie than others, such as arts and culture venues, which suffered just as much from closures and capacity restrictions, if not more.
But not only is the International Association of Site Managers part of the coalition as a representative of an industry that also sells food and drink, neither the PPP nor the catering fund is expected to cover almost all of the costs. complaints.
Bodnovich adds that this one-off tax credit offers both narrower and broader recourse than previous funding mechanisms.
“Bars and taverns were planning St. Patrick’s Day events and all the food they bought and much of the draft beer was gone. They have suffered these shock losses which have done a lot of harm to a lot of people all along the supply chain: the fisheries, the bakers, etc. He said. “It extends to all of these other industries involved.”
Like previous federal Covid relief programs for small businesses, this provision specifically prohibits “duplication” by claiming a deduction for something already covered by a previous federal Covid-19 program.