WNC’s craft distilling industry

Original Article: WNC’s craft distilling industry is growing despite legislative hurdles
By Shawndra Russell, Mountain Xpress

SPIRITED DEBATE: Apothecary Beverage Co. owners, from left, Brandon Horne, Danielle Donaldson and James Donaldson recently opened The Chemist distillery and Antidote bar on the South Slope. State and federal legislative changes have helped open up opportunities for craft distillers in recent years, but many distillers say North Carolina still has a long way to go. Photo by Luke Van Hine

SPIRITED DEBATE: Apothecary Beverage Co. owners, from left, Brandon Horne, Danielle Donaldson and James Donaldson recently opened The Chemist distillery and Antidote bar on the South Slope. State and federal legislative changes have helped open up opportunities for craft distillers in recent years, but many distillers say North Carolina still has a long way to go. Photo by Luke Van Hine

In 1986, Weeping Radish in the Outer Banks became the first modern microbrewery to open in North Carolina. Highland Brewing Co. followed eight years later, kicking off the Western North Carolina beer scene, which has driven the state to emerge as one of the fastest-growing beer industries in the country.

By comparison, North Carolina’s first craft distilling company, Piedmont Distillers, opened in Rockingham County circa 2005. But beyond the reality that the development of North Carolina’s craft spirits scene is chronologically 20 years behind beer, some local distillers argue that the state’s liquor laws are drastically inhibiting the growth of the fledgling industry.

North Carolina has some of the strictest liquor laws in the United States, in large part due to the state-run monopoly on sales of spirited drinks. As The News & Observer noted in an August report, “The battle over who gets to sell liquor, plus when and where, has been going on for decades. Right now, the state controls every aspect of the liquor business, from the hours (closed all day on Sunday and at 9 p.m. every other day) to the prices (higher than in many other states).”

North Carolina is one of 17 states that bans privately run liquor stores, a fact bemoaned by some in the craft spirits industry, but one that Mark Combs, Asheville Alcoholic Beverage Control general manager, says is a complex subject. “North Carolina is unique in that 167 communities own their liquor stores. Back in 1937, the legislature voted to let each community choose whether or not they want spirits to be sold in their communities,” he explains. “No tax dollars are used in the operation of the system. Asheville’s ABC system is owned by the city of Asheville, and all our profits go back to the community.”

In addition, only five bottles of liquor can be sold directly by a distiller to a consumer per 12-month period (prior to passage of the Brunch Bill in 2017, the limit was just one bottle per year, and before 2015, it was zero), liquor cannot be shipped to consumers either inside or outside the state, permits are required for sales at festivals or events, no tastings can be offered at ABC stores, no sales of mixed cocktails are allowed on-site at distilleries without a vendor’s permit, and self-distributing to bars and restaurants is prohibited.

State control of pricing, including a local markup determined by the ABC Commission, bailment and bottle charges and state excise tax, is also problematic for many craft distillers, as are statute stipulations, such as the requirement that the ABC maintain a law enforcement component and give 7 percent of its profits to alcohol and drug education and treatment grants. “The beer and wine industries have none of these constraints put on them,” says Combs.

Katie Coburn