Baltimore, MD – Congressman Jamie Raskin (D-MD-8) has become a cosponsor of the first bill to support the growing US kombucha industry, which includes ten producers and a $16 million market in Maryland. Kombucha, the fermented tea that has disrupted the US beverage market and sparked demand for live cultured foods, offers promising opportunities for small business. However, one issue has hampered its growth: trace alcohol.

While the alcohol-by-volume (ABV) for kombucha averages 0.5%, it can vary slightly due to living cultures; this presents a challenge for producers, as current legislation applies excise taxes to beverages with an ABV above .5%. This limit, set during Prohibition and lower than globally accepted levels (1-2% throughout Mexico, Canada, Australia and Europe), has forced small businesses to develop costly techniques to ensure that every bottle remains in compliance throughout its life cycle.

The KOMBUCHA Act, “Keeping Our Manufacturers from Being Unfairly Taxed while Championing Health Act,” would amend the Internal Revenue Code of 1986 to increase the taxable alcohol-by-volume (ABV) threshold for kombucha from 0.5% to 1.25%, relieving a burden that has plagued the young industry since 2010. 

Congressman Raskin joins lawmakers across the country, in co-sponsoring the KOMBUCHA Act, which promises to help businesses start up and expand into new regions. Introduced by Rep. Earl Blumenauer (D-OR-3) and Sen. Ron Wyden (D-OR),  it has received bipartisan support and follows a trend of tax updates in recent years relieving similar burdens on craft beverage producers, such as the CIDER Act in 2015.

Among its advocates, which range from small, family-run producers to giants like GT’s Kombucha, is Shane Carpenter of HEX Ferments, based in Baltimore. He says he has felt the limitations of the archaic legislation first-hand: “Fermented foods are in every culture and for thousands of years have been an effective way to make food more digestible while enhancing nutrients, and we’re committed to keeping those traditions in our work. So far that has meant limiting our business to manage the constraints of the current regulations. I’m grateful that local lawmakers such as Congressman Raskin see how this affects businesses in Maryland. We’re very hopeful that this bill will pass this year and make it easier for us to provide these nutrient-rich beverages to our community.”

Kombucha Brewers International, the trade association representing kombucha brands throughout the world, has set up a petition for customers of HEX Ferments and other Maryland kombucha brands to urge their lawmakers to sign on in support of the bill. The petition can be viewed here.

About Kombucha Brewers International:

Kombucha Brewers International (KBI) is a non-profit trade association that represents the commercial Kombucha category globally. KBI strives to promote, protect and enhance the overall well-being of the industry by creating an open line of communication between brewers, consumers and regulators while advancing the industry through advocacy, education, research, and modern legislation. To learn more, visit www.kombuchabrewers.org.

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