NC distilleries operate under new laws
Craft distilleries could serve beer, wine and cocktails and sell their liquor directly to bars and restaurants under a bill filed in the House and Senate this week.
Supporters of House Bill 378 and Senate Bill 290 say the changes would level the regulatory playing field for craft distillers, treating them more like the state’s craft breweries and wineries. Current law allows distilleries to serve quarter-ounce tastings and sell up to five bottles, per customer, per year to people who take a tour of their facility. All other purchases require a trip to the ABC store, and distillers say it can sometimes be difficult to get the government-run stores to stock their products.
The new legislation – sponsored by Rep. Chuck McGrady, R-Henderson, and Sen. Rick Gunn, R-Alamance – would allow distilleries to get permits to serve on-site beer, wine and mixed drinks.
The move would allow distilleries to offer a similar experience as breweries and wineries, where people spend time enjoying drinks and food trucks with friends and family.
“Now that we’ve done cideries and craft breweries, people are beginning to recognize that having an adult drink and even having family around playing games and whatnot are not inconsistent things,” McGrady said.
Zeb Williams owns Old Nick Williams Farm and Distillery in Lewisville, and he said the change “would allow people to come out to the farm and have that family fun time.”
He said that the straight liquor-only tastings currently offered can be a turn-off for customers who’d prefer to see how his product tastes in a mixed drink. The bill would also lift the five-bottle cap on sales, which Williams said would benefit out-of-state visitors who want to stock up on North Carolina spirits – and generate more tax revenue for this state.
Distilleries could also sell their products directly to bars and restaurants, rather than have bars order their products through ABC stores. Williams said that it can take weeks for bars and restaurants to get a delivery of his products from the ABC board, and ABC store managers can sometimes refuse to make special orders for customers seeking a particular craft liquor unless the customer agrees to buy an entire case.
Distilleries could also sell directly to out-of-state customers.
The provision in the bill bypassing the ABC system will likely draw opposition from some conservative groups who worry it would be another step toward privatizing the liquor sales system – something expected in another bill from McGrady in the coming weeks.
“The ABC system is just antiquated,” McGrady said. “You can’t order electronically, you can’t pay without getting a check to go pay.”
Another source of opposition could be local ABC boards, which don’t currently get a cut of revenue from liquor sold at distilleries. The N.C. Association of ABC Boards could not be reached for comment Tuesday; a spokeswoman for the N.C. ABC Commission said it doesn’t take sides on pending legislation because it’s a regulatory board.
Craft distilleries have made regulatory baby steps in recent legislative sessions. In 2015, the legislature allowed them to sell one bottle to each customer during tours, and the limit was raised to five bottles in 2017.
As of 2017, the N.C. ABC Commission listed 52 craft distilleries across the state, and that number has likely since grown. Williams said he expects to see a “dramatic” revenue increase if HB 378/SB 290 becomes law – and that could result in even more growth in the industry.
“We’re not asking for anything different – we’re asking for what beer and wine has been allowed to do for the last 20 years,” he said.