COVID-19 IMPACT on CRAFT SPIRITS INDUSTRY
The outbreak of COVID-19 has harmed the health of Americans, fractured the nation’s economy and exposed weaknesses in our critical supply chains.
In this time of national crisis, craft spirits producers have been producing and providing critically needed alcohol-based sanitizers using local and resilient supply chains.
However, the craft spirits sector has been hard hit economically and finds itself in a precarious position: being considered an essential business, yet in many cases, due to state regulation, requiring only in person sales. Many producers are now unable to legally sell the products they produce.
THE SOLUTION: COMMONSENSE REGULATORY CHANGES
States are looking for answers that allow economic activity to restart while preventing the spread of COVID 19. From an economic standpoint, the smart solutions will be ones that do not require stimulus funds and can return revenue to the state and federal treasuries.
Providing for direct to consumer sales for craft spirits producers is one of those “win-win” policy solutions. It would:
- Minimize person to person contact while also exercising social distancing;
- Allow producers to exercise their right to sell to consumers without an in-person visit so that we can stimulate the economic recovery within the craft spirits sector; and,
- Utilize third party fulfillment companies and increase economic activity in the broader economy.
Importantly, increasing production and sales through simple regulatory reform has the dual effect of keeping and or creating jobs as well as building back the state tax base.
21ST CENTURY RESPONSE
Recent executive orders in California, New York, and other states with alcohol beverage control such as Virginia, Oregon, and Pennsylvania have already provided for regulatory relief that has allowed for consumers to order online with craft distilleries fulfilling orders through third party carriers.
In these states we have seen a major effect with many craft distillers replacing much if not all of their tasting room sales with direct to consumer shipments.
Request: We encourage state Governors and regulators to provide regulatory relief, allowing for electronic contactless sales and fulfillment through third party carriers. Further, we propose the following proven guidelines for these regulatory changes:
- A consumer should not be required to be present at a distillery’s manufacturing site to purchase products.
- A recipient must be of and provide proof of legal age.
- Fulfillment should be made through a provider that has policies and procedures in place for the legal delivery of alcoholic beverages.
- Any local or state limitations on the maximum amount of sales per transaction and/or per time period must be adhered to.
