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Hospitality Workers Tell SF Supervisors to “Put a Cork in It!”

SAN FRANCISCO (July 7, 2010) - Citing the impact of another job-killing initiative that will threaten their industry, San Francisco small business owners and employees in the hospitality industry today announced their opposition to Supervisor John Avalos’ job-killing alcohol “mitigation fee” at Harvey’s on 18th and Castro. The proposed “fee” is expected to reduce economic activity in San Francisco County by $23 million and result in a $21 million decline in retail sales, eliminating over 300 jobs in the process. These jobs are needed to help the City out of the economic doldrums we have all been experiencing since the recession started.

“We are more than just a small business - we employ people who live and work here and are already enduring some of the highest costs of living and doing business in California,” said Sherry Wilson, owner of Pera in Potrero Hill, “Restaurants like mine cannot afford to be the solution to the City’s financial problems.”

“A ‘nickel-a-drink’ tax is a myth,” said Kassy Perry of the California Alliance for Hospitality Jobs (CAHJ.) “The actual price of a drink will increase by much more. Tax proponents have gone to great lengths to claim that the so-called “mitigation fee” amounts to a ‘nickel-a-drink.’ Nothing could be further from the truth.”

A “nickel-a-drink” at the wholesale level does not translate to the same amount at the consumer or customer level. As the tax migrates through distribution channels, the extra cost is passed on and marked-up at each level. Ultimately, the consumer will pay significantly more than “a nickel-a- drink.” And it will be the consumers who pay this new tax. While $0.076 per ounce does not sound like much, in reality it will mean that San Franciscans will pay more than double the tax rate than the rest of California.

Advocating for a City-level alcohol fee, on top of additional state alcohol fees, will hurt small business owners, hospitality workers and consumers in San Francisco.  A high percentage of hospitality jobs in San Francisco are held by women, minorities, and people without a college education - a group already negatively impacted by the bad economy and local jobs drying up.  Restaurants, hotels and bars and their employees have been among the hardest hit by the economic crisis and simply cannot afford to absorb the costs brought on by new drink fees.

This proposal is being made at a time when San Francisco’s restaurant and hospitality industries are already reeling from declining sales and the number of vacant storefronts continues to rise. Supervisors claim that raising the price of every glass of wine, mixed drink or beer purchased in San Francisco will generate much-needed funds for the City’s notoriously liberal social service spending.  In order to truly be a “mitigation fee” the proposed per drink charge has to somehow be proportionally related to the services actually used.  Since the vast majority of adults drink alcohol responsibly, they impose no cost on San Francisco’s public service infrastructure and receive no services…thus rendering Avalos’ “fee” a tax in actuality.

“Enough is enough,” said Perry.  “This proposal is just another tax increase that working San Franciscans can’t afford.

About CAHJ

The California Alliance for Hospitality Jobs (CAHJ) is a coalition of employers, suppliers, restaurateurs, business owners, trade associations and citizens who work in and with the hospitality industry and are concerned about proposals at the federal, state and local levels to raise alcohol taxes and fees. The alliance is supported by Diageo.