How a redefinition made Yuengling the biggest craft brewery in America

The Brewers Association made a list of the 50 largest craft breweries, and the biggest in the US last year was D. G. Yuengling and Son, the Pennsylvania-based brewers of Yuengling.

(Brewers Association)

Yuengling isn't most people's idea of a craft brewery: it's the fourth-largest brewery in the US and doesn't produce a highbrow IPA. But it dominates the list this year because the Brewers Association has changed how it defines craft beer — a decision that involves 15th-century Germany, 19th-century American agriculture, and 21st-century congressional politicking.

The basic question is what ingredients "craft beer" should contain

(Quinn Dombrowski)

The Brewers Association used to require breweries to use only barley for their flagship beer and for most of their products. This restriction originated in the 15th century, in present-day Germany, where the Reinheitsgebot, or "purity law," defined beer as made from only hops, barley, and water.

Big brewing companies often use rice, maize, or corn to produce lighter, cheaper beer. In 2011, the Brewers Association called out Yuengling, as well as other American breweries, for not being a true craft brewery because it uses those ingredients, known as adjuncts. (Their flagship beer includes corn grits.)

But some small American breweries took offense, arguing that they've been using adjunct ingredients for generations and that the practice began because American barley had higher protein content than European barley. Beers brewed with American barley needed adjuncts to produce lighter, shelf-stable beers.

"Why are we being punished for brewing with a locally grown ingredient, which started out of necessity, and has continued out of tradition?" wrote August Schell, a Minnesota brewery founded in 1860, in a letter to the brewers' group.

The Brewers Association had changed its membership rules before — in 2010, it raised the cap on the number of barrels a company could produce per year so that Boston Brewing Company, which makes Sam Adams, wouldn't be kicked out for getting too big. And it reconsidered again after the fight over Yuengling, August Schell, and other old American breweries that had long used adjuncts. In February 2014, the group got rid of the rule about adjunct ingredients, opening the way for Yuengling to be considered a craft beer.

Actually, this is a story about lobbying

(Raymond Boyd/Getty Images)

The fight over adjunct ingredients was brewing (pun intended) at the same time as a fight between beermakers in Congress. The Brewers Association is in a lobbying battle with the Beer Institute, a lobbying group that includes the big brewers, over a bill to reduce federal excise taxes.

All beer produced and sold in the US is subject to a federal tax of $18 per barrel, with a lower rate of $7 for the first 60,000 barrels for brewers producing fewer than 2 million barrels per year. (Almost every brewery except for the big corporations, Yuengling, and Boston Beer make less than 2 million barrels.)

There are two bills in Congress to reduce the excise taxes for some brewers. The Small BREW Act, supported by the Brewers Association, would cut the tax to $3.50 per barrel for very small breweries producing fewer than 7,143 barrels, then gradually raise the tax as the number of barrels increased, topping out at $18 per barrel for breweries with at least 2 million barrels. But the tax cuts would only apply to breweries producing fewer than 6 million barrels per year.

The Fair BEER Act, supported by the Beer Institute, would structure taxes in a similar way, but doesn't have the 6 million barrel cutoff — so it would benefit the biggest multinational beer companies as well.

So by bringing Yuengling on board as a "craft brewery," the Brewers Association isn't just expanding the definition of craft beer. It's also expanding its own power, by getting the fourth-biggest brewery in the US on its side.

Correction: An earlier version of this story misspelled the name of the brewery that sent the letter. It's August Schell.

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