Opinion: Daily Journal

Public backlash ensures distillers’ good deed goes unpunished

A continuous column still at Top of the Hill Distillery in Chapel Hill. (Photo courtesy of Top of the Hill Distillery)
A continuous column still at Top of the Hill Distillery in Chapel Hill. (Photo courtesy of Top of the Hill Distillery)

Assigning infallibility to government action is a fool’s errand.

It’s a common refrain in libertarian and conservative circles, and its truth is grounded in history, as well as the government’s continuing and ubiquitous intrusion and overreach.

I won’t take credit for the aforementioned paraphrased statement because Scott Maitland said it this week as we talked about a letter to America’s distillers demanding $14,000. Maitland owns Top of the Hill Restaurant and Brewery in Chapel Hill, which is temporarily closed because of the pandemic. 

Chapel Hill these days, he says, is a ghost town.

Maitland is also a distiller.

And Maitland, like many distillers losing revenue streams because of closed tasting rooms, pivoted because of COVID-19. They were still cooking, mashing, and, well, distilling. To a point. Tasting rooms closed, as did distillers’ shiny new cocktail bars, a result of Senate Bill 290, which the governor had signed into law the previous July.

Curbside sales only go so far, and direct online sales aren’t allowed under N.C. ABC statutes. The focus switched to hand sanitizer, which, in addition to ethanol — high-proof alcohol — includes things such as glycerin and hydrogen peroxide. Distillers can use the denatured alcohol — which can’t be consumed — for tax-free hand-sanitizing products, as long as it follows federal tax, and food and drug rules. 

Hand sanitizer, as you’ll remember, was in short supply. The distillers stepped in to fill a need, mostly donating their products or selling it around cost.

Simple enough? Nope

“Just as it seemed they’d made it through the worst of a terrible year,” Reason magazine wrote Dec. 30, “the Food and Drug Administration (FDA) had one more surprise in store: The agency delivered notice to distilleries that had produced hand sanitizer in the early days of the pandemic that they now owe an unexpected fee to the government of more than $14,000.”

Under a provision of the CARES Act that reformed regulation of non-prescription drugs, reported Reason, “distilleries producing sanitizer have been classified as ‘over-the-counter drug monograph facilities.’

The CARES Act also enacted user fees on these facilities to fund the FDA’s regulatory activities. For small distillers, that means ending the year with a surprise bill for $14,060 due on Feb 11.

“‘I was in literal disbelief when I read it yesterday,'” Aaron Bergh, president and distiller at Calwise Spirits in Paso Robles, California, told the libertarian-leaning magazine. “‘I had to confirm with my attorney this morning that it’s true.'” 

Distillers, including many in North Carolina, popped off on social media accounts.

“Absolutely ludicrous,” said one N.C. distiller. 

Well This Sucks!!!” wrote another.

Maitland saw making the sanitizer as a sort of modern-day Victory Garden, a project that will help us all reach the other side of the pandemic.

“I wasn’t in the hand-sanitizing business,” he told Carolina Journal. “I was in the, ‘Let’s save our collective as**s business. …”

Maitland said about half of the hand-sanitizer produced at TOPO Distillery was given away.

“We’re just trying to stop a pandemic,” Maitland said.

Reporting from Reason, as well as loud backlash throughout the industry, led the Department of Health and Human Services to reverse its misguided policy. 

“Small businesses who stepped up to fight COVID-19 should be applauded by their government, not taxed for doing so,” Brian Harrison, HHS chief of staff, said in a news release.

“I’m pleased to announce we have directed FDA to cease enforcement of these arbitrary, surprise user fees. Happy New Year, distilleries, and cheers to you for helping keep us safe!” 

Yes, Happy New Year, and stay out of our business. 

It’s hard not to think politicians and American bureaucracies continue to have a problem with alcohol, some 100 years after Prohibition. Gov. Roy Cooper recently signed an executive order allowing restaurants, bars, clubs, and hotels to sell sealed to-go containers of mixed alcoholic drinks, months after lawmakers killed a similar provision in a COVID-19 relief bill.

Too little, too late. 

Further, the option for to-go drinks is already there, says Maitland. What’s to stop someone from buying a pint of whiskey from a state ABC store — which also sell bottled mixed drinks — and chugging it in their car? Or a six-pack from a grocery store, or wine, if that’s their preference?

As if somehow government policy will change how people act, Maitland said.

“I don’t understand it.”

Welcome to the club, but there’s a long line at the door. About 100 Triangle restaurants, bars, and similar service businesses have closed since spring, according to one list

Add one more. Today.

Sadly, Zack Medford, a prominent and vocal Raleigh bar owner, on Monday said he has closed Coglin’s on Fayetteville Street, which, he wrote on Facebook, fell “victim to insufficient government aid, negligent leadership from elected officials, and inequitable state policies.”

“Out of money, and out of hope, the bar was forced to lay off over 25 employees and turn the lights off one final time.”

Bars in North Carolina, for all intents and purposes, closed in mid-March. Many for good.

Politically motivated and empty gestures won’t save them.

Cheers to 2021.