Distilleries Seek Financial Relief from Federal Government

The alcohol industry has joined the growing list of industries seeking financial relief from Washington D.C. during the Coronavirus crisis.

In a letter sent yesterday to Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer, U.S. spirits supplier trade associations urged Congress to move quickly to provide economic aid for distilleries facing monetary hardships due to the impact of COVID-19.

The letter was signed by the presidents of the Distilled Spirits Council of the United States, American Craft Spirits Association, the New York State Distillers Guild and the Kentucky Distillers’ Association.

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“Across the United States, our member distilleries are doing their part to help prevent the spread of COVID-19 and ensure the health and safety of their workers and the public,” the association presidents write. “However, because of the necessary measures being undertaken, including the closures of restaurants, bars, and tasting rooms, many distillers will soon need to lay off employees and delay or reduce production. Many may even be forced to close their doors permanently.”

The presidents argue that these developments have a ripple effect through the entire supply chain, impacting farmers, glass bottle makers, truck drivers, warehouse workers and others connected to the spirits industry.

The association heads urge Congress to include four components to aid distillers as part of any economic relief package:

  • Provide federal excise tax relief
  • Ensure robust no- and low-interest loan assistance
  • Seek the suspension of tariffs on distilled spirits
  • Create an Industry Stabilization Fund

“As Congress moves swiftly to provide economic relief to affected businesses, we urge you to remember the important role of distilleries in your home states and across the country and their inextricable link to the hospitality, restaurant, tourism, and retail industries,” the letter adds.

Distilleries across the country have also weighed in, asking for help.

“As the birthplace of Bourbon, Kentucky has more than 20,000 people who owe their jobs to our signature industry and we are all feeling the impact of this unprecedented economic crisis,” says Jessica Pendergrass, general council of Heaven Hill and chairwoman of the Kentucky Distillers’ Association. “Our tourism centers and hospitality areas are shut down, leaving many of our smaller craft distillers without key revenue to keep their doors open. The unknown extent of these existing closures, and possible future closures, is creating tremendous anxiety in the distilling community.”

Adds Chris Montana, owner and head distiller of DuNord Craft Spirits in Minneapolis: “As a small, independent distillery owner in Minnesota, the devastating impact of COVID-19 on my business is very, very real, and without federal support, our survival is in jeopardy. We have already closed our cocktail room to the public, and laid off more than half of our staff. With no end in sight we will almost certainly be forced to further reduce our workforce and potentially halt our production.”

“These actions have been painful, but the long term looks far more ominous,” Montana adds. “On behalf of our community of more than 2,000 independent craft distilleries across the country, I am certain that without significant, immediate intervention, and a long-term commitment to assistance, we will face a devastating future.”

The Distilled Spirits Council is also working to reopen the liquor stores currently closed in Pennsylvania. Pennsylvania, a control state, remains the only state to shut down all of its beverage alcohol retail stores in response to the Coronavirus. Consumers can still purchase beer and wine in Pennsylvania grocery stores, however.

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