Distillers in Virginia and North Carolina have recently seen legislation move through both of their state governments which could have significant positive impacts on their businesses. In 2019, North Carolina saw the successful completion of NC Senate Bill 290. Earlier this year Virginia saw VA Senate Bill 824 take shape and begin its journey through the state government. Read below for a summary of each bill, starting with North Carolina. 

North Carolina

NC Senate Bill 290/SL 2019-182 – Distiller Regulatory Reform Bill

On March 18, 2019 the Distiller Regulatory Reform bill (NC SB 290) was filed with the State of North Carolina Senate by primary sponsors Sen. Rick Gunn (Rep), Sen. Dan Blue (Dem), and Sen. Kathy Harrington (Rep). According to the Legislative Analysis, Third Edition S290-CSTQ-26, Senate Bill 290’s overview describes this legislation as:

“Senate Bill 290 would (i) expand the types and amounts of products that distilleries could sell at the distillery, (ii) allow certain orders of distillery products, (iii) allow distilleries to issue purchase-transportation permits, and (iv) allow ABC stores to conduct in-store spirituous liquor tastings”.

Source: Legislative Analysis Division Summary, Third Addition, S290-SMTQ-43

SB 290 passed the state Senate on  June 25, 2019 with a vote of 39-4, at which point it was handed over to the state House. After spending time in various committees of the House, SB 290 was voted on and approved by the North Carolina House on July 11, 2019 with a vote of 86-28. Final vote was held by the State Senate on July 16, 2019, passing with a vote of 31-10. It was then presented to Governor Cooper on July 19, 2019, which he then signed into legislation, making it law (SL 2019-182) on July 29, 2019 at Graybeard Distillery in Durham, North Carolina.

NC SB 290 has created a positive impact on distillers all over the State of North Carolina. Here are 3 major changes that distillers will experience as a result of this law’s passing:

  1. Distillers may now sell cocktails, beer, and wine at their facilities. This has made it possible for local distillers to provide additional alcoholic beverages, beyond the previous small product samples, to patrons when their distillery is visited. The option to open a cocktail bar on site offers distillers an alternate source of income and foot traffic into their establishments; likely increasing on site bottle sales of their distilled spirits. Let’s be honest, not everyone wants to drink their spirits as a shot or neat. This allows distillers the opportunity to showcase their products in cocktails that may appeal to a larger consumer base thus providing additional opportunities for sales.
  2. Distillers do not have to keep their patrons limited to purchasing only 5 bottles per year on site.  
  3. Distillers may now hold product tastings at different ABC stores around the state. Again, this offers distillers the opportunity to get their product in front of consumers who may not have purchased a bottle of their distilled spirits if they hadn’t been afforded the opportunity to try before buying.

NC SB 290 came with much applause and fanfare from the distilling community for obvious reasons. It appears to be a win win for both the distillers and the consumers! In fact, Rickhouse Ramblings took the opportunity to speak with a local distiller about the impact this bill has had on their business. They have more than doubled their on site bottle sales due to the addition of the bar and the removal of the bottle purchase limit. They have also seen an increase of sales at local ABC stores during their recent tastings.

Virginia

VA Senate Bill 824 – Alcoholic beverage control; distiller licenses, Internet orders and shipments

January 2020 saw VA Senate Bill 824 (SB 824) introduced by Sen. Frank Ruff (Rep). SB 824 passed the Senate committee on January 31, 2020 with a vote of 14-0. The bill was read the third time and passed the Senate vote on February 5, 2020 by a margin of 40-0.On February 14, 2020 the state House passed the bill off to the Committee on General Rules who assigned it to the ABC/Gaming sub-committee. On February 20, 2020 the sub-committee voted to continue the bill until 2021. 

Below is a summary of VA SB 824 as approved by the State Senate:

Alcoholic beverage control; distiller licenses; Internet orders and shipments. Allows the Virginia Alcoholic Beverage Control Authority to include provisions in its agency agreements with licensed distillers operating government stores that allow such distillers to sell spirits and low alcohol beverage coolers through Internet orders and ship such orders directly to consumers within the Commonwealth for personal consumption. The bill also clarifies the power of the Board of Directors of the Authority to sell alcoholic beverages through Internet orders and to ship such orders directly to consumers or licensees within the Commonwealth.”

Source:  Virginia’s Legislative Information System

Many Virginia distillers are still hopeful this bill will gain traction and pass, however it is currently tabled until 2021. As proposed, SB 824 would allow distillers to get their products out of regional  ABC stores and into the consumer’s hands around the State of Virginia through direct-to-consumer shipping. The reason this bill has been tabled until 2021 is due to concerns over the ability of government owned ABC stores being able to ship to consumers. Additionally, there are concerns that the bill may create an unfair advantage to in-state vs out-of-state products. 

Rickhouse Ramblings will continue to keep an eye out for any additional news on this bill.

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