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Taking the lead.

Ron Sarasin has transformed the NBWA into a powerful advocacy tool for the beer industry.

Ron Sarasin took over as president of the National Beer Wholesalers Association (NBWA) in early 1990. Prior to that, he served as director of government communications for the National Restaurant Association. Sarasin is also a veteran of the U.S. House of Representatives, where he served for three terms representing Connecticut's Fifth District. He was a member of the Education, Labor, Aging and Welfare Reform Committees, and was vice-chairman of several subcommittees.

MBA: The President's deficit reduction package recently passed, with no beer taxes. What are the prospects now for a potential excise tax increase?

SARASIN: Clearly the excise taxes are being saved for the health care package, which will require another massive round of tax increases.

MBA: In published comments, Clinton seemed disinclined to raise beer taxes, what is your read on that?

SARASIN: There was some talk about how he felt, that maybe beer taxes had gone up enough, but he would still look at some other excise taxes. But there's no talk about how Mrs. Clinton feels, and she's Mrs. President.

The fact that we didn't see any increase in excise taxes, when they were really scrambling to find revenue sources, is a clear indication to me that some things have been held out for health care.

Whether beer excise taxes would be included, we just don't know. There have been some indications that we may not be. By the same token, there are a lot of people in the anti-alcohol crowd who will work very hard to try to get us back in.

In Clinton's published comments, he separated alcohol and tobacco, which is one of the things that the anti-alcohol people don't do. That created the impression that he could justify an increase in taxes on tobacco, but he may not be so inclined on beer, and he mentioned beer specifically.

So we're hopeful that he'll see a tax on beer as a tax on the middle class and will understand that there's no free lunch here.

If you drive up the cost of the product, you're going to put people out of work. That's what happened last time, and that's what would happen again.

MBA: It's difficult to base a strategy on the president's off-the-cuff remarks.

SARASIN: It is, and you never know where he's coming from. He has hardly engendered any confidence.

MBA: I recall at the last NBWA convention, you said you were scared to death of the prospect of a Clinton Administration. Now that the prospect is a reality, what is your view?

SARASIN: I was concerned about a lot of things, primarily taxes, and the direction that he would take the country. Frankly, I think the concerns have been justified. The tax bill is the greatest tax increase in the history of this country, and there is no deficit reduction, in spite of what the bill is called.

Interestingly, in the 1990 tax package, the one that got Bush in trouble, the taxes were increased immediately, but the spending cuts would occur in the out years. Well, the out years have arrived. So, now when the spending reductions from the |90 tax bill were supposed to kick in, they're canceled, and the so-called new spending reductions won't take place until the out years, in |96 and |97, after the next presidential election.

MBA: In the talk about beer taxes around the capitol, is equalization still spoken of?

SARASIN: Well, that was the proposal initially. The anti-alcohol people are pushing that, and the spirits people are pushing equalization. We are obviously not in favor of that. We want to be left out of this process, and we certainly don't want to see the taxes equalized. A drink is not a drink, so we argue strongly against that concept.

But that was the proposal. Raise the tax on distilled spirits and bring everyone up to that level, which would be dramatic for beer and even more dramatic for wine.

MBA: When you speak to members of Congress on the subject of equalization, what is their reaction?

SARASIN: Well, sometimes their eyes glaze over, because they don't know there is a distinction, and they aren't interested in hearing about it. You have to go back and explain why there is such a difference, and that there is no country in the world, except perhaps for one, that taxes different alcohol beverages at the same level.

A swallow of beer is a lot different than a swallow of distilled spirits, and you try to make that point. But in most cases, excise taxes are a little arcane, and nobody understands them, except for those of us who have been involved with them. So it takes a little explanation.

We're spending a lot of time trying to get legislators to understand that there is a negative impact from beer taxes. That voting for beer taxes is not a do-good vote, or a feel-good vote.

The argument is made that certain problems will be solved if we reduce consumption through increased taxes. We spend a lot of time explaining that a reduction in consumption has no impact on alcohol abuse. National reduction in consumption means that the moderate consumer is simply going to drink a little less. When that happens, the impact is dramatic in terms of lost jobs.

So we have to remind the legislators that we're not just talking about brewery people and beer wholesalers and retailers. We're talking about barley and hop farmers, and jobs in transportation and manufacturing that are directly dependent on malt beverage sales.

Members of Congress are sometimes surprised to learn that there is an important industry back in their district that is directly effected by the health of our industry. We try to identify that industry and point it out.

MBA: The NBWA seems to have made great strides in building a voice on Capitol Hill during your tenure. Was that one of your primary goals when you took the position?

SARASIN: Clearly, it was. When the officers and directors polled the membership of NBWA, and said, "what should we be doing?," government affairs was at the top of the list. They wanted somebody who was knowledgeable in government affairs.

In addition, we've really got a tremendous staff here. We've reorganized, and we've added a couple of people, and we've strengthened the Association's ability to be heard in Washington.

We have also dramatically improved the grass-roots capability. Using a combination of computer and fax technology, we can send out a message overnight to 98% of the NBWA members in the country.

We can produce a message on the computer screen, hit the right buttons, and it will automatically start going out in waves across the country. And a fax will be in every wholesaler's office in the morning, asking them to write to their Congressman or Senator. It costs us less than it would to get letters out to everyone, and is more timely.

MBA: How about wholesalers who are not part of the NBWA?

SARASIN: We have tried to get their fax numbers as well. Right now we have numbers for 98% of NBWA members and a fair percentage of non-members. Their voices are equally important, although clearly we'd like them to be members, to help contribute to the costs of this operation. But they also know their members of Congress, and so we ask them to participate as well. Their businesses that are at stake as well.

Incidentally, one of the other things we're doing with grass roots is plugging in zip codes. That allows us to get every wholesaler in a Congressman's District by zip code to write to their Congressman. So even if the wholesaler doesn't live in the district, if that's part of his trading area, they also have a stake. We want to be sure that there's a way to get these messages out.

MBA: How often do you send out Action Alerts?

SARASIN: Well, the purpose is not to get them out, unless we need them. We've actually only sent out a few, since mainly what we do is keep track of legislation, and try to get our story across to the members of Congress.

If a wholesaler receives an Action Alert in his in-box in the morning, we want him to know it's serious. So we don't want to cry wolf.

MBA: It's a remarkable capability.

SARASIN: It is, and the great thing is that we don't have to sit here trying to push paper into a fax machine, or wait for the mail.

It's an economical way to our people know what's going on.

The main vehicle we use to keep the wholesalers up to date, of course is the NBWA Beer Perspectives. That's primarily a government affairs newsletter. We have put in voting records, and also tried to show the wholesalers that they are doing a great job, pointing out things that other wholesalers around the country are doing.

So we've done some good things, but we've still got a way to go.

MBA: For a while, before Ray McGrath joined the Beer Institute, NBWA seemed to become the sole voice for the industry.

SARASIN: Well, that's true, but we don't want to be the sole voice of the industry. I'm delighted that Ray McGrath has joined the Beer Institute, he will be a tremendous asset for the industry.

I think that, collectively, we can really accomplish a lot on behalf of the malt beverage industry. If he can get the brewers, and their employees organized, and active, and we continue to try and move the wholesalers, we can accomplish a great deal.

MBA: Do you foresee greater cooperation between the two associations?

SARASIN: Yes. Certainly in the past there was a lot of cooperation, but Beer Institute is now more heavily involved in government affairs than they have been in the past, and with Ray there, I think they'll be a lot more visible.

We've done a number of things together, as you know, last year, with the two million underage drinking posters, paid for by the brewers and distributed by the wholesalers to retailers. This year, we did a PSA program together, in conjunction with the National Association of Broadcasters, a series of TV and radio commercials.

We also did a "We I.D." program, to give retailers information on identifying underage drinkers.

So we continue to look for projects to work in tandem. It's a natural for us to work together. In most cases, we're on the same side of an issue, and together we have a lot at stake.

MBA: Are you starting to see the benefits of NBWA's new activism?

SARASIN: We are, and it shows up in several ways.

First, in terms of membership. We have reversed a decline in membership that went on for a few years, and now have more people than we've had in the last eight years. This is at a time when the number of wholesalers continues to shrink.

The universe is getting smaller because of consolidation, and yet we've been able to turn around a slow membership erosion that had been going on for a few years, and actually end up with more members this year than we had the year before. We feel pretty good about that.

There's still an awful lot of people out there who should be members of NBWA, and they are unfortunately relying on their neighbors to carry the burden. We hope we can convince them to join.

In addition, the Legislative Conference, held each spring in conjunction with the brewers, has been a tremendous success. The Conference this year had over a 1000 people, and many more wholesalers than we've ever had before.

Wholesalers who haven't been to Washington before come down, and see that NBWA is really a positive force here. If they weren't members, and a large number of non-members have come to the conference, they go back and become members. They'll help recruit other people.

These things have worked to the benefit of the association, and by the same token, allow the association to do a better job for the individual wholesalers. That's why we're here.

MBA: How influential has the NBWA become in Washington?

SARASIN: We are ninth, in terms of the size of the political action committees (PACs) for trade associations. Labor unions and other groups would push our rank down a few notches, but in terms of trade associations, we're number nine.

As PACs go, we're a big player. The PAC has grown dramatically. We set a very ambitious PAC goal this year of $600,000, and we've exceeded that, reaching $620,000, and that's just tremendous.

The goal last year was $475,000 and we felt very good when we met that, and we set a goal this time that I wasn't sure would be possible to meet.

MBA: What is the status of anti-PAC legislation in Congress?

SARASIN: Well, there is legislation being proposed that would eliminate PACs. It's passed the Senate, but I don't think the House will support it the way it is. There may be a limitation on the amount of money that can be contributed or spent.

Clinton has plastered PACs and everything else, but it's important to remember that these are voluntary contributions. If you eliminate PACs, you're going to return to the old days of people handing off envelopes of money, that was never publicized and never accounted for.

Today we've got a situation where all of these dollars have to be accounted for, where they came from, who they came from, where they're being spent. There are no games played...there is a very rigid reporting and accounting process. It's all a matter of public record, and that's the way it should be.

MBA: How would the elimination of PACs affect NBWA?

SARASIN: What we've tried to do, and this is a philosophical change from recent years, is try to provide PAC dollars for people who are going to make a difference. People who are pro-business, pro-beer wholesaler.

There was a time when PAC dollars were paid to anybody of importance, figuring that you never knew when you would have to knock on that guy's door. That's not the way to change the Congress. That keeps the problems going.

Our PAC committee decided some time ago that we would try to pick meaningful challenge races, and we've gotten heavily involved in some when one of the candidates has been anti-wholesaler, anti-business. We win some, we lose some. The important thing for the Congressman to know is that we're there.

If they are not receptive to the problems of wholesalers, they should know that we'll do all we can to find somebody who is. Before they start a fight with wholesaler, they should be sure they want to get in that fight.

To that extent, we've been successful. If we can't do it, if all PACs are eliminated, we'll just have to be more inventive and more creative.

The problem is, the elimination of PACs won't take away the extraordinary cost of running for office.

Another concern I have is that only business PACs will be eliminated. Some bills would allow labor and environmental PACs to continue. If ours are eliminated, I think that's wrong.

We're not doing anything that anybody else isn't. We're banding together, and pooling our dollars, to help support certain legislators. It's not a question of donating dollars, and then having somebody vote with you. You don't buy can't even rent them for awhile. But you can support the people that are supporting business and our industry, and they are the ones that will get our PAC dollars.

A related point is the elimination of lobbying deductibility, which was contained in the recent budget reconciliation bill. I'm not sure how that will effect us, because they have broadly expanded the definition of lobbying, which includes preparation time. A lot of costs would be defined as lobbying. That would mean that when a member pays X number of dues to NBWA, we would have to figure out how much of that money went to lobbying, and that portion could not be deducted as a reasonable business expense.

I think that is absolutely wrong, but Clinton ran on that, and he is trying to accomplish that.

MBA: Have the attitudes at HHS that we saw during the Bush years continued under the new Administration?

SARASIN: No, as a matter of fact, and that makes me hopeful. I don't know whether it's because their attention is directed to a lot of other things, or if the players have changed.

To some extent, the players may have changed. I had a meeting with Secretary (of Health and Human Services) Shalala, and went through some of the grief we've had with CSAP. I didn't come away with any promises, but I did come away with the feeling that at least she listened.

So I don't know where it's going to go, but so far Secretary Shalala has not been out blasting the industry, or using us as a whipping boy, and I'm encouraged by that. I hope she has a better understanding of the positive impact that the malt beverage industry can have.

The same thing is true with Jocelyn Elders, the nominee for surgeon general. She has been heavily criticized for a lot of other things she's done, but I don't think beer or alcohol is on her agenda. I think she has other things she is concerned about, and she does not have a record of blasting the industry, unlike her predecessor

MBA: So, in that aspect, things have improved since the Clinton Administration came in.

SARASIN: Sure. I have to give credit where it's due. I may eat my words tomorrow, but so far I've been very impressed. I had an opportunity to meet with the Secretary of HHS, and I was able to get some of our concerns across. And that's a good development.

MBA: Based on her reputation, it seemed like Shalala might be interventionist regarding the alcohol industry, but I'm glad that hasn't proven to be the case.

SARASIN: Well, she still may be. For the moment, though, the beer industry is not high on her agenda, in fact it's not even on her agenda. She has a lot of other things to be concerned about.

In other meetings, with larger groups, she's talked about the fact that she has a background at HUD, and she was noting how she had been trained to run a large public institution. She is at HHS to make some changes, and get a handle on the agency.

So I want to give credit where I can, as long as no one is taking the bully pulpit and finding fault with the use of the product. As long as they aren't doing that, I'll be on their side.

The problem is, in the past, CSAP has decided on its own that the product is bad, and that anyone who uses the product is terrible. Therefore, they decided they had an obligation to reduce consumption. No one ever told them to do that, they never had a directive from Congress.

MBA: Has your vision for NBWA been completely realized?

SARASIN: Not yet. With our grassroots capability we're light years ahead of where we were, but there are ways to hone that and make it better so we can do things even more quickly.

We'll figure out ways to improve that. Waiting until a bill gets to the floor is too late. If there is a way to influence it in committee, that's the way it ought to be done. The way to do that is get the guys back home to call their Congressmen, and also develop the strong relationships between the wholesalers and Congressman.

We want the Congressmen to walk around wholesalership facilities, and have the wholesaler explain the economics of the operation. How many trucks there are, how many people are employed, what value that brings to the district, and be sure the Congressman understands that.

That way, it's not just NBWA making these claims, it's a guy in the district that will be affected by what that Congressman decides to do.

We're continuing to work at it. With people like Bo Bludworth and David Rehr, and Gary Galanis and Claudia Tidwell, we've got a good crew. David is highly respected as a lobbyist. He is energetic and exciting..he goes out delivers speeches I get great letters about.

I think there is a feeling among wholesalers and state executives around the country that NBWA is on the right track. As I said, there is more we have to accomplish, but I'm excited about the future, and I think everybody here enjoys coming to work in the morning. They know we have a tremendous responsibility on our shoulders, on behalf of all the wholesalers, and we are getting great support from the officers, directors and the wholesalers around the country.
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Title Annotation:national Beer Wholesalers' Association President Ron Sarasin
Publication:Modern Brewery Age
Article Type:Interview
Date:Sep 20, 1993
Previous Article:Perry's Majestic is introduced; called first U.S.-brewed organic beer.
Next Article:Town crier.

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