N.C. treats distilleries differently from breweries, wineries, but why?

By John Trump

This story originally appeared in Carolina Journal. A friend of mine, who, along with a group of his friends, owns a distillery on the N.C. coast, once told me a story about a customer who asked him for a drink.

I tell the story every time I have the opportunity. There’s a moral.

The distillery, because of its location on the Atlantic, caters to busloads of tourists, oftentimes from the Northeast. They’re visiting beautiful North Carolina, they want to have fun, and many of them want a tasty alcoholic drink.

One such tourist, who he guessed to be upwards of 80, wanted such a drink, in this case a refreshing mojito. She was, after all, visiting a rum distillery.

My friend told her he was sorry, but he can’t mix drinks at distilleries in North Carolina. She can have a small bit of rum from a bottle, and that would have to do. The rum, alone, is remarkable, but not everyone enjoys their liquor warm and straight.

Doesn’t seem fair, does it? To refuse someone something that, in another setting, is perfectly legal and at the same time deny a hard-working entrepreneur the chance to make some money from customers more than willing to open their purses.

North Carolina lawmakers — Democrats and Republicans — have done well in transforming and enacting laws that benefit the state’s growing distilling industry. There’s momentum toward such free-market reforms, and lawmakers should take care not to lose it. The “brunch bill” — which more than anything allows distillers to sell five bottles per customer per calendar year at the distillery — was an important step. But parts of the original legislation spilled from the legislative mash tank, including tastings at ABC stores — Virginia and South Carolina have those, for example — and distillery-to-customer sales.

Allowing distilleries to serve mixed drinks has got little play in North Carolina, but let’s not discount its potential.

In Kentucky, a historically dry state — and the bourbon capital of the world — the passage of Senate Bill 11 in spring 2016 allowed distilleries to sell mixed drinks.

In Iowa, a story from The Courier of Waterloo posted on the American Distilling Institute website reported on the success of a new law allowing distilleries to sell its products on-site, including mixed drinks, of which it sold 2,400 cocktails over a recent three-day weekend.

“In the past we’ve always just done bourbon samples, but this year we still did that and we were also able to sell bourbon cocktails,” Jamie Siefken, general manager of Cedar Ridge in Iowa’s Cedar Valley, told the paper. “It was just crazy. It was wall-to-wall.”

“Iowa distilleries have expanded, hired more employees and made more money now that they can sell their product in individual servings on-site, multiple companies said,” according to the story.

The Virginia Distillers Association, as another example, is lobbying legislators there to consider the challenges distillers face in trying to sell and market their products in a control state.

“If the Commonwealth plays its cards right, and shows fiscal support for the industry – we can all capitalize on the momentum from growth within the national spirits sector,” said Amy Ciarametaro, executive director for the VDA, says in a news release.

The Virginia ABC, for its part, transcends the North Carolina system in a number of ways, including in-store tastings, a lottery allowing residents to buy rare spirits, and an interactive website where consumers can search for products in a particular store. North Carolina publishes a price list of what’s available … in one or more of the state’s more than 420 ABC stores. Good luck finding that cranberry Krupnikas.

The N.C. ABC system, unlike, say, Virginia’s control system, seems to at least make an effort toward appearing as if it’s interested in selling liquor to residents. North Carolina seemingly takes an opposite tack, basically dissuading people from buying spirits, especially those made in North Carolina. Bars and restaurants, for instance, can’t buy directly from distillers but must rather order from the ABC, and typically by the case. That’s not so with beer and wine.

Promoting more free-market reforms in North Carolina regarding liquor is definitely on the radar, though distillers tell me not to expect much legislatively this year.

But, I’ve heard, wait ‘til next year.

At its base is a simple question, says Scott Maitland, president the Distillers Association of North Carolina and proprietor of TOPO restaurant and brewery in Chapel Hill and the TOPO distillery.

“Why we are treating distilleries any different than our wineries and breweries?” Maitland asks.