Lawmakers Look To Loosen Sales Restrictions For Craft Distilleries, Wineries

Lawmakers Look To Loosen Sales Restrictions For Craft Distilleries, Wineries
Seattle-based Westland Distillery would be able to sell its craft-licensed American Single Malt whiskey to smaller beer and wine retailers, under proposed legislation. Other craft distillers statewide would enjoy the same new opportunities. Another bill seeks to loosen limits on winery tasting rooms. Photo: Adam Barhan.

A bipartisan group of Washington state lawmakers is aiming to lessen barriers to sales growth for Washington’s wine and spirits industry. Two new bills, to be heard Thursday January 12 in the House Commerce and Gaming Committee, would benefit boutique wine and beer sellers, craft distilleries, and wineries. However, some stakeholders say one of the bills accents a divide between craft distillers and non-craft, or general-licensed distilleries.

Growing Market For Washington-Sourced Liquor

Craft distilleries are those using at least 50 percent Washington-sourced raw materials for each individual product. They only recently emerged in the state, but have quickly grown. The craft distillery law passed in 2008 was the first in Washington to allow for related special licenses. There are 115 licensed craft distilleries in the state, and 43 operate under a general license.

Since then, the state has developed a wide array of locally distilled craft liquor. Seattle-based craft spirits include Letterpress Distilling’s Vodka, Westland Distillery’s American Single Malt Whiskey, Fremont Mischief’s Workers No. 9 Vodka, and 2bar Spirits’ Bourbon. Other Washington craft products include Woodinville-based Pacific Distillery’s Voyager Gin, Spokane-based Dry Fly Distilling’s Washington Wheat Whiskey, and Lynden-based BelleWood Distilling’s Honeycrisp Vodka.

End Of State Liquor Sales Monopoly

Initiative 1183, approved in 2012, put the state entirely out of the business of operating liquor stores. This was in sharp contrast to the previous state-only monopoly for hard liquor sales, which resulted in a tightly limited number of outlets and, some customers said, service that was too often sub-standard. The measure only allows privately operated stores 10,000 square feet or larger to now sell hard liquor.

HB 1020 would allow craft-distilled spirits to be sold in smaller establishments, that are already purveying beer and wine. Sponsors include State Reps. Norm Johnson (R-14), Jake Fey (D-27), Michelle Caldier (R-26) and Eileen Cody (D-34).

Johnson said the legislation aims to help retail shops and craft distillers, which will have another market for their product. “It is a good business bill for those people in small wine and beer establishments” and would allow them to sell up to 60,000 gallons of craft-distilled spirits a year, said Johnson.

Skip Tognetti, owner and head distiller of Seattle-based Letterpress Distilling, said, “Small, boutique specialty stores tend to know a lot about their products. This bill would give them the opportunity to become experts on these craft spirits…that’s the advantage these stores have,” said Tognetti.

Craft Distillers Would Gain, But…

Tognetti added, “Certainly the more outlets that we have, the better off we are…One of the things we deal with is that in most of our outlets, we are not only competing with other small producers, but with large producers as well…if there are only small producers, it’s easier to stand out as a brand.”

Tognetti said he is worried that the bill’s language as written would leave out non-craft distillers. “Someone that wants to make rum can’t have a craft license” in Washington because 50 percent or more of the materials cannot be obtained in-state, but  “fundamentally they are small artisanal producers. They sort of get left out sometimes, because of the weird technicality.”

Dry County Distillery owner Howard Johnston shared a similar concern. “When the legislature decides to pass laws that will not help everybody out, it is a little frustrating,” said Johnston.

Johnston and his wife Jennifer own a non-craft distillery in Marysville. Johnston said because he produces some products with less than 50 percent Washington-sourced materials, he was required to obtain a general license in order to sell his products.

Continued Johnston, “There’s a schism between craft and general distillers in Washington. They weed out anyone who is not a craft distiller,” said Johnston.

Reducing Limits On Wine Tasting Rooms

Craft distilleries aren’t the only alcohol-related growth sector in the state. Washington’s wine production has doubled in the past decade. It is the nation’s second largest premium wine producer, with over 40 varietals.

The state’s top white varietals include Riesling, Chardonnay, Pinot Gris, Sauvignon Blanc, Gewurztraminer, Viognier, Semillon and Chenin Blanc. Washington red varietals include Cabernet Sauvignon, Merlot, Syrah, Cabernet Franc, Malbec, Sangiovese, Petit Verdot and Pinot Noir.

Another bipartisan bill, being considered at the same time, aims to boost sales opportunities for that industry. HB 1038 would double the number of tasting rooms allowed for domestic wineries, from the current two to four.

Sponsors include Johnson, and State Reps. Cary Condotta (R-12), Derek Stanford (D-1), Brandon Vick (R-18), Larry Haler (R-8) and David Sawyer (D-29).

Both bills are scheduled for a public hearing in front of the House Commerce and Gaming Committee on Thursday, January 12.

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Mike Richards grew up in Charlotte, North Carolina. He graduated from Duquesne University in Pittsburgh, PA with a degree in Multiplatform Journalism and a minor in Public Relations. He wrote and published articles at Pittsburgh’s NPR station covering a variety of topics.

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