The Virginia Distillers Association has been quite busy and quite successful during this year’s legislative session. We all know that Virginia is for Lovers but now we’re seeing that the state legislators are also in love with the entrepreneurs that make distilled spirits in the state.
There are three key pieces of legislation that have recently been approved with the support of the Virginia Alcoholic Beverage Control Authority (ABC) and the Virginia Distillers Association. One thing to note, VA is a control state and all liquor sales go through the state.
- In Distillery Commission Increase – HB 1770 / SB 1668 allows for an increase of commission paid to Virginia distilleries for Direct to Consumer (DTC) sales that happen onsite in the distillery from 8% to 20%.
- Expanded Sunday Hours – The right for Virginia ABC stores and distillery stores to open as early as 10am on Sundays, expanded from 12pm.
- All Counties Go Wet – HB 2634 / SB 1110 changes all counties in the state from dry to wet unless the county opts-out. The bill has a delayed effective date of July 1, 2020 but allows localities to hold anticipatory referendums beginning July 1, 2019. There are nine counties that are dry with portions of 31 counties that are partially dry (moist) that will be wet when the law takes full effect. The nine dry counties include Buchanan, Charlotte, Craig, Grayson, Highland, Lee, Patrick, Russell and ironically Bland.
“Our partners at Virginia ABC understood the challenges that we face as spirited entrepreneurs, and through their support, legislation was passed that directly incentivizes growth,” said Gareth H. Moore, President of the Virginia Distillers Association and CEO of Virginia Distillery Company in Lovingston, Virginia. “Our 64 licensed distilleries are a part of the fastest growing sector of the beverage business in the commonwealth, and improving the economics for direct sales and allowing expanded hours is good policy for Virginia distilleries, Virginia ABC, Virginia taxpayers, and of course, consumers of Virginia spirits.”
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“Sundays continue to be a popular shopping day for many of our customers,” said Virginia ABC Chief Executive Officer Travis Hill. “This legislation will allow us to better serve those who choose to shop on Sundays, and provide economic growth for the state and our burgeoning distilled spirits industry.”
The formula for pricing distilled spirits in the commonwealth is the same whether the product is sold at a Virginia distillery, or at a local ABC retail store. At distillery stores, in order to cover overhead expenses associated with retail sales – employee salaries, electricity, credit card processing machines, etc. – distillery store operators receive a commission. The previous commission rate of 8% of gross sales exclusive of sales tax was too low to cover retail expenses; leading to a loss on sales where the spirits are made. When the legislation goes into effective July 1, 2019, the commission rate will increase to 20%, enabling healthy growth of distillery operations.
Contributing to the success of HB 1770 / SB 1668 was ensuring that the legislation would be revenue neutral for the state. Since retail stores and distillery stores are regulated as government Virginia ABC stores, both will have the elective option to open on Sunday at 10am as opposed to the current 12pm – a schedule already used by many Virginia wineries and breweries. The additional revenue from the expanded hours is expected to cover the incremental commission increase without impacting budgetary goals set for Virginia ABC by the General Assembly.
The General Assembly also supported other progressive distilled spirits legislation this year, including HB 2634 / SB 1110, which is intended to ‘flip’ Virginia’s dry counties to wet unless the locality has a majority vote referendum to continue dry.
Distilled Spirits Council President & CEO Chris Swonger said, “Virginia has made tremendous progress in providing consumers with the convenience they demand and creating a more modern spirits marketplace. We commend the Virginia ABC and state lawmakers for fostering a strong business environment for Virginia’s booming distilled spirits industry.”
The Virginia Distillers Association is a nonprofit private trade association focused on promotional efforts to increase awareness of Virginia’s growing craft spirits industry, as well as the regulatory and legislative needs of the industry.
View all Virginia Distilleries.