In case any of my fellow beer-lovers out there are not already aware, thanks to auspices of both federal and state governments, Americans generally pay quite a bit more for their favorite alcoholic beverage than what it really costs brewers to produce and distribute. An estimated national average of 40 percent of what we pay for beer is actually just various taxes, via the Tax Foundation:

There isn’t much consistency on how state and local governments tax beer. This rate can include fixed-rate per volume taxes; wholesale taxes that are usually a percentage of the value of the product; distributor taxes (usually structured as license fees but are usually a percentage of revenues); retail taxes, in which retailers owe an extra percentage of revenues; case or bottle fees (which can vary based on size of container); and additional sales taxes (note that this measure does not include general sales tax, only those in excess of the general rate).

The Beer Institute points out that “taxes are the single most expensive ingredient in beer, costing more than labor and raw materials combined.” They cite an economic analysis that found “if all the taxes levied on the production, distribution, and retailing of beer are added up, they amount to more than 40% of the retail price” …

The federal government, however, is looking to potentially jack those government-imposed costs up ever further — all for our own good, of course. Last October, the Food and Drug Administration proposed a potential new rule via the Food Safety Modernization Act that would regulate brewers’ spent grains the same way as pet food, requiring that the grains be dried and packaged to ward off contamination before they come into contact with other humans. Seeing as how this would completely mess up the mutually beneficial arrangement between many brewers and ranchers wherein ranchers come and pick up brewers’ spent grains and then productively and inexpensively recycle them as a feed source for their livestock, this rule poses something of a problem.

The U.S. Food and Drug Administration today issued a proposed rule under the FDA Food Safety Modernization Act (FSMA) aimed at improving the safety of food for animals. This proposed regulation would help prevent foodborne illness in both animals and people and is open for public comments for 120 days. The proposal is part of the Food Safety Modernization Act’s larger effort to modernize the food safety system for the 21st century and focus public and private efforts on preventing food safety problems, rather than relying primarily on responding to problems after the fact.

The proposed rule would require makers of animal feed and pet food to be sold in the U.S.to develop a formal plan and put into place procedures to prevent foodborne illness. The rule would also require them to have plans for correcting any problems that arise.  The proposed rule would also require animal food facilities to, for the first time, follow proposed current good manufacturing practices that address areas such as sanitation.

“The FDA continues to take steps to meet the challenge of ensuring a safe food supply,” said FDA Commissioner Margaret A. Hamburg, M.D. “Today’s announcement addresses a critical part of the food system, and we will continue to work with our national and international industry, consumer and government partners as we work to prevent foodborne illness.”

But the beer industry is arguing that they have no idea what exactly these foodborne illnesses are supposed to be, since the grains are already declared fit for human consumption before they start the brewing process and because they have been working with ranchers for decades without problems. A bunch of brewers are currently protesting the proposed rule, arguing that the equipment and processes they would need to install would make the whole thing too expensive, and that they’ll just end up trashing their spent grains into landfills — while ranchers are worried that they’ll lose a valuable source of feed, via HuffPo:

The controversy surrounds the rule’s effect on the longtime practice of beer brewers giving their spent grain, the malted barley left over after the beer brewing process, to neighboring ranchers and dairy farmers. The practice serves two purposes: to help the brewers get rid of millions of tons of leftover product, and to provide a free, nutritious food source for animals at local farms.

Under the new regulation, the practice would be outlawed, unless breweries go through expensive and time-consuming measures to ensure the grain is up to regulation. …

Since the grains are used to brew beer, they have already been deemed safe for human consumption. But the FDA fears the lack of oversight from the time of brewing to the time the grains are fed to the animals could lead to contamination. …

But though the move could be a problem for brewers, some say it could deal a fatal blow to small ranchers and farmers.

“If I were to purchase feed, it would be an extra $300-400 per day,” said Rick Olufs to HuffPost.

Olufs is the owner of Olufs Ranches in Windsor, Calif., and has been feeding spent grain to his cattle for over 30 years. For the past 18, he estimates, he’s gotten his grain from Cilurzo and her husband at Russian River Brewing Company. “We’ve worked together a long time,” he said.

I realize this seems like something of a niche issue, but it is exactly this sort of regulatory death-by-a-thousand-cuts that is largely preventing our economy from the robust rebound that the Obama administration is still trying to convince us is actually happening — and niche issue though it may be, it’s plenty important to the many craft brewers in, say, Colorado, for instance. Ahem.

In one of those intersections of economic clout, linking Colorado’s craft breweries with the need to shore up U.S. Sen. Mark Udall’s (D-CO) shaky reelection prospects, spent grains are suddenly right up there with health care and traffic congestion as statewide issues.

Udall fired off a letter Monday to FDA Commissioner Margaret Hamburg demanding that she put the proposed animal food rule aside until a “risk assessment” can be completed on the reuse of spent brewery grains as animal feed.

“I support a robust framework of smart regulations that minimize unnecessary risk and keep our nation’s food supply safe,” Udall wrote. “This particular part of the Animal Food (Rule), while well intentioned, does not seem based on evidence of risk or hazard. I hope FDA will reconsider its initial interpretation and formally review the body of evidence that exists in abundance on this particular topic to determine if in fact spent brewers grains warrant designation as ‘animal food.’”

Udall claims new regulatory treatment of brewer’s grains is not justified, adding, “Perhaps most relevantly, the U.S. Department of Agriculture has decades worth of data that demonstrates the history of spent brewers grain used as animal food. This information does not reveal to my knowledge any evidence that dedicating spent brewers grains for agricultural use has ever compromised food safety to animals or humans.”