It’s going to feel like Prohibition just ended for North Carolina distillers and their fans this week. You see starting October 1, 2015 NC distillers will be allowed to sell their distilled spirits Direct-to-Consumers (DTC.) There are still some limitations but, this is a big leap forward in creating a much better user experience when visitors take a distillery tour.
Imagine you just took an hour tour of a distillery, a privilege you likely paid for, perhaps you got a thimble full of spirits to try at the end of the tour and then you said, “That was really good, I’d like buy a bottle to take home.” Now the distillery has to break the bad news to you that you can’t buy it here, you need to drive say 45 minutes to a state run liquor store to purchase the product. That situation is about to become history.
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The North Carolina Distillers Association has worked hard to pass this new law in an effort to grow sales for the industry, expand North Carolina agriculture, create new job opportunities, and encourage tourism across the state. Those in the craft distilling industry say that the change was necessary to put distillers on the same level as wineries and breweries, and to add a boost to a growing industry.
According to the North Carolina News & Observer, several Republican House leaders said allowing distilleries to sell a souvenir bottle is a good idea to help grow the industry in North Carolina.
“To me, this is not about alcohol,” said Rep. John Bell. “It’s about jobs and economic development. I remember a few years ago when we unleashed our winery industry. I look at what happened in craft brewing. … Put the passions on each side away and look at what it actually does.”
There are a few hoops that distillers must jump through but it’s worth it to allow for the Direct-to-Consumer sale and to create a better customer experience for distillery tour visitors.
Here are the highlights of the bill.
- Consumption of the spirit is for off premise
- Distillery must produce less than 100,000 proof gallons per year
- Prices are set by the state ABC store
- Bottles must have affixed a sticker that bears the words, “North Carolina Distillery Tour Commemorative Spirit” (Hope distilleries remembered to order the stickers!)
- No more than one bottle per calendar year
- Distillery must keep an electronic record for at least one year that includes the purchaser’s name, driver’s license number, and date of birth.
- Note to distillers: If you don’t already have an electronic Point of Sale (POS) system, now is the time to make this investment.
Happy days have arrived in NC!
Prohibition Factoid: According to the ConstitutionCenter.org, The 21st Amendment returned the control of liquor laws back to the states, who could legally bar alcohol sales across an entire state, or let towns and counties decide to stay “wet” or “dry.” Two states rejected the 21st amendment – North Carolina and South Carolina rejected the amendment before December 5. So the vote was far from unanimous.
Visit the Distillery Trail distillery directory to check out all the North Carolina Distilleries. Here’s a list of current association members.
- Asheville Distilling Company
- Barrister & Brewer
- Blue Ridge Distilling Company
- Broadslab Distillery
- Brothers Vilgalys
- Call Family Distillers
- Carolina Distillery
- Copper Barrel Distillery
- Covington Spirits
- Doc Porter’s Craft Spirits
- Durham Distillery
- Fair Game Beverage Company
- Howling Moon
- Mayberry Spirits
- Mother Earth Spirits
- Muddy River Distillery
- Outer Banks Distilling
- Petzold Distilleries
- Piedmont Distillers
- Raleigh Rum Company
- Seventy Eight °C Spirits
- Southern Artisan Spirits
- Southern Grace Distilleries
- Sutler’s Spirit Co
- Tobacco Road Distillers
- Top of the Hill Distillery
North Carolina Distillery Tour Commemorative Spirit Oct. 1, 2015 cover image courtesy of TOPO Distillery.
Here’s the bill.
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION LAW 2015-98
AN ACT TO MAKE VARIOUS CHANGES TO THE ALCOHOLIC BEVERAGE CONTROL COMMISSION LAWS.
The General Assembly of North Carolina enacts:
ALLOW DISTILLERY PERMIT HOLDERS TO SELL SPIRITUOUS LIQUOR DISTILLED ON PREMISES TO VISITORS OF THE DISTILLERY FOR CONSUMPTION OFF THE PREMISES
SECTION 4.(a) G.S. 18B-1105(a) reads as rewritten:
“(a) Authorized Acts. – The holder of a distillery permit may do any of the following:
(1) Manufacture, purchase, import, possess and transport ingredients and equipment used in the distillation of spirituous liquor.
(2) Sell, deliver and ship spirituous liquor in closed containers at wholesale to exporters and local boards within the State, and, subject to the laws of other jurisdictions, at wholesale or retail to private or public agencies or establishments of other states or nations.
(3) Transport into or out of the distillery the maximum amount of liquor allowed under federal law, if the transportation is related to the distilling process.
(4) Sell spirituous liquor distilled at the distillery in closed containers to visitors who tour the distillery for consumption off the premises if the distillery manufactures less than 100,000 proof gallons per year. Sales under this subdivision are allowed only in a county where the establishment of a county or municipal ABC store has been approved pursuant to G.S. 18B-602(g) and are subject to the time and day restrictions in G.S. 18B-802. Spirituous liquor sold under this subdivision shall (i) be listed as a code item for sale in the State, (ii) be sold at the price set by the Commission for the code item pursuant to G.S. 18B-804(b), and (iii) have affixed to its bottle a sticker that bears the words “North Carolina Distillery Tour Commemorative Spirit” in addition to any other labeling requirements set by law. Consumers purchasing spirituous liquor under this subdivision are limited to purchasing, and the selling distillery is limited to selling to each consumer, no more than one bottle of spirituous liquor per 12-month period. The distillery shall use a commonly adopted standard point of sale system to maintain searchable electronic records captured at the point of sale, to include the purchaser’s name, drivers license number, and date of birth for at least 12 months from the date of purchase. The Commission shall adopt rules regulating the retail sale of spirituous liquor under this subdivision.”
SECTION 4.(b) G.S. 105-113.68(a) is amended by adding a new subdivision to read:
“(4a) Distillery permittee. – A distillery that holds a distillery permit issued by the ABC Commission under G.S. 18B-1105.”
SECTION 4.(c) G.S. 105-113.80(c) reads as rewritten:
“(c) Liquor. – An excise tax of thirty percent (30%) is levied on liquor sold in ABC stores. stores and in permitted distilleries. Pursuant to G.S. 18B-804(b), the price of liquor on which this tax is computed is the distiller’s price plus (i) the State ABC warehouse freight and bailment charges, and (ii) a markup for local ABC boards.”
SECTION 4.(d) G.S. 105-113.81(e) reads as rewritten:
“(e) Tasting. – Resident breweries and wineries breweries, wineries, and distilleries are not required to remit excise taxes on malt beverages and wine beverages, wine, or spirituous liquor given free of charge to customers, visitors, and employees on the manufacturer’s licensed premises for consumption on those premises.”