KINDERHOOK–United States Senator Charles Schumer (D) dropped by the Golden Harvest Farm Stand and Harvest Spirits Farm Distillery for a couple of drinks last Friday morning.
Actually they were tastes, not drinks, and far from a social event, the occasion was instead a press and political event at which the state’s senior senator announced a new bill he’s introducing to give the makers of hard cider tax breaks designed to allow the region’s hard cider industry to compete more effectively in the U.S. and European markets. He said it would also create a new “supplemental business” for apple farmers.
Sen. Schumer was welcomed by Derek Grout, founder of Harvest Spirits Farm Distillery on Route 9, which produces and sells Core Vodka, made from Golden Harvest Farm apples, as well as half a dozen other spirits. Among the other products are apple jack–a type of whiskey–and pear brandy. The operation also produces 60,000 gallons of hard cider annually, but despite the growing popularity of that beverage, the distillery uses hard cider only as a raw material for its other products.
In remarks during his midday tour of the distillery and the apple press Sen. Schumer said that different alcoholic beverages are taxed under the Internal Revenue Code at different rates based on the amount of alcohol in the product.
The problem for hard cider makers is that the alcoholic content of the fermented cider is hard to control, and that has led federal law to put hard cider in the same tax category as wine, which makes the tax three or four times higher than beer; if the hard cider is particularly ‘fizzy,” then it falls in the same category as Champagne; instead of a tax rate of 17 cents a gallon, Harvest Spirits would face a tax rate of $3.30/gallon.
The senator calls his bill the CIDER Act. The acronym stands for “Cider, Investment & Development through Excise Tax Reduction Act,” and it would increase the allowable amount of alcohol in hard cider from 7% to 8.5% and would exempt hard cider altogether from the carbonation tax provision. Mr. Schumer said this would create a new, higher value use for apples that are perfectly good but not cosmetically attractive to consumers and might otherwise be thrown away or sold at a very low price.
He also said that a lower U.S. excise tax would enable U.S. hard cider products to compete effectively in the European market, where hard cider is popular.
“I thank the senator for making this a priority across the state,” Mr. Grout said, standing behind the counter in the distillery at the rear of the fruit and vegetable stand. The high-ceilinged space, part of a barn once used to store apples, it now houses the still, which looks like a 19th century science lab. All around are steel shelves filled with hand-decorated oak barrels full of spirits the company is aging until they spirits they hold are ready to be sold.
Mr. Grout, who began the business in 2005 at the farm stand owned by his father, Alan, said the changes sought in the bill would help preserve small farms as well as promote the development of hard ciders as a new farm project.
“I love a pear brandy,” said Mr. Schumer with evident glee as he accepted a small, taste-test plastic cup half full of the Harvest Spirits’ liqueur. Before finishing the sample, he asked an aide, “Is this all right?” Assured it was, he finished the second swallow.
Mr. Schumer, the third most powerful member of the Democratic majority in the Senate, said at the press conference podium set up inside the farm stand that he does not yet have a co-sponsor in the House of Representatives for his bill but that he is seeking one. He also said that he does not expect major beverage companies to fight the change, adding that he had already talked to an executive for InBev, the company that owns Budweiser beer, who had no objections.
The senator believes his bill will pass because it reduces taxes, making adoption of the legislation what he called a “no-brainer.”
Working the small crowd that gathered for the event on a rainy Friday, Mr. Schumer found several openings to praise Golden Harvest’s other products, suggesting at one point, “Let’s skip the press conference and eat a lot of doughnuts.” Later he stepped behind the counter to pose for photos with the staff. Then he bought two boxes of cider doughnuts for his staff and headed off to his next appointment, a tour of a brewery in Athens, NY.