Gwydion Stone

The Craft Distiller Bill

19 posts in this topic

Hello all,

Yes thank you for setting up this forum.

The latest...

Bill Owens has forwarded the email exchanges I had with Don at Dry Fly to several industry people across the nation.

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Personally, I'd like to keep it just between us for now, at least until the public hearing is over. This would be a good thing to discuss tomorrow though.

I feel if we bring others in, it would only be fair to bring Dry Fly in, and I don't think that's in the best interest of WA distillers in general at this point. Call me cynical, but I'm having a hard time giving them the benefit of the doubt in terms of their motives with this bill, given the remarks Don has made in print and emails. (I've attached the Forbes article, see text below)

One drawback to the organization as mentioned by Guy Rehorst is that if such an org were set up, it could make those who don't belong seem less desirable. I do think offering an alternative would be a wise move, however.

I'm all for simply changing the existing license and doing away with the distinction between craft or other distillers. I think Oregon has the right idea. It's been working for them for years.

Poffenroth and his business partner, Kent Fleischmann, both former marketing executives in the food services industry, hit the corporate funk at the same time and came up with this bright idea. They invested about $600,000 in 401k savings and 18 months in run-up time. "We are taking a serious business approach, not the romantic approach you see with a lot of these guys," Poffenroth says. The eventual idea-Dry Fly's complex, German-made pot still was in transit "on the water" when we spoke in late August-is to produce between 3,000 and 5,000 cases a year to start, providing a potential revenue stream of about $700,000.As marketing men, Poffenroth and Fleischmann's plans included "a lot of brand development. Dry Fly's backstory will emphasize the fact that its vodka, gin and whiskey are "tied tightly to individual farmers in eastern Washington. We've really hit the local ingredients; it is almost the 'appellation' approach of a winery."

Of course, if Dry Fly actually were a winery—the state now has more than 500 of them—Washington's licensing and regulatory process would have been routine. With a first-and-only distillery it was anything but, a common story for micro-distillers in most states. (Bluecoat's Auwerda reports the reaction of the Pennsylvania Liquor Control Board: "Hunh? You want to found a what?")

Having navigated the shoals itself, Dry Fly has helped to write a bill that will be presented to the state legislature in January to define the state's stance on "craft distilling." It includes the provisions that such an operation must employ a pot still, cannot simply redistill neutral grain spirits produced elsewhere and—here's the Dry Fly touch—must source at least 50 percent of its ingredients from within the state. Shrugs Poffenroth: "The first guy in gets the privilege of setting the playing field."

SCAN_0109200810111600.pdf

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Here is my quick summation of the "new" things in the bill... did I miss anything?

An Unofficial Summarization of

BILL REQ. #: S-4165.2/08

BRIEF DESCRIPTION: Concerning craft distilleries.

Sec. 1:

A new section is added to chapter 66.24 RCW to read as follows:

1) There shall be a license for craft distilleries. The fee is one hundred dollars per year.

2) Any craft distillery licensed under this section may sell spirits of its own production for consumption off the premises, up to one liter per person per day. Spirits sold under this subsection must be purchased from the board and sold at the retail price established by the board. A craft distillery selling spirits under this subsection must comply with the applicable laws and rules relating to retailers.

3) Any craft distillery licensed under this section may provide, free of charge, one-half ounce or less samples of spirits of its own production to persons on the premises of the distillery. The maximum total per person per day is two ounces. Every person who participates in any manner in the service of samples must obtain a class 12 or 13 alcohol server permit. Spirits used for samples must be purchased from the board.

4) The board shall adopt rules to implement the alcohol server permit requirement and may adopt additional rules to implement this section.

5) The use of purchased neutral grain spirits shall be prohibited by a craft distillery unless those neutral grain spirits are made in Washington State.

6) Distilling is an agricultural practice.

Sec. 2:

RCW 66.04.010 and 2007 c 226 s 1 are each amended to read as follows:

(12) "Craft distillery" means an establishment that produces within Washington twenty thousand gallons or less of spirits per year using a pot still and in which more than fifty percent of the raw materials used in the production are grown in Washington.

Sec. 3:

RCW 66.04.010 and 2007 c 370 s 10 and 2007 c 226 s 1 are each reenacted and amended to read as follows:

(12) "Craft distillery" means an establishment that produces within Washington twenty thousand gallons or less of spirits per year using a pot still and in which more than fifty percent of the raw materials used in the production are grown in Washington.

Sec. 4 through 14:

Each of these sections appears to essentially just include the listing of “craft distilling/distiller

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The new draft of the bill (attached) increases the retail limit in Sec. 1 (2)� from one liter to nine liters.� I could live with that, but I think it's unfair and arbitrary considering wineries and breweries have no such limit that I'm aware of.

Also in Sec 8 (1) c:

c: Nothing in this section shall prohibit a licensed distiller, domestic brewery, microbrewery, domestic winery, or a lessee of a licensed domestic brewer, microbrewery, or domestic winery, from being licensed as a spirits, beer, and wine restaurant pursuant to chapter 66.24 RCW for the purpose of selling liquor at a spirits, beer, and wine restaurant premises on the property on which the primary manufacturing facility ...

They neglected to add craft distillery.

6496.pdf

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Realizing the overprotective nature of the state to feel the need to regulate alcoholic consumption, I could easily accept a nine-liter purchase limit, and allow that to be a battle for another day if it became apparent that this was an issue.

Good catch on 8(1)©... I see no reason why a craft distillery shouldn't also be able to have an on-premis resturant which would be capable of serving their product.

-Robert

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I think once this is all over the ADI forum will take off about this, especially after Bill posts the email exchanges with Don in the next newsletter.
I'm not finding the ADI forum.

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I just logged on as Marquand Distillers and realized that I hadn't mentioned my business name to you guys, Its me, Margot. Ill change it later. Boy! you guys are flying with the messaging, I cant stay away, how am I going to get any work done today.

Margot

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I'm not sure that I recall seeing "why" the initial hearing got yanked, was it just a scheduling conflict, or were the other details?

Is there an effective way for us to be dealing with both the house and the senate simultaneously?

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The bill went contrary to some other statute that prohibits raising fees or creating a new fee without voter approval.

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