Liquor producers hopeful alcohol laws to be updated
DES MOINES — Small Iowa liquor distillers may soon be toasting a new state law that would permit them to sell their product on site.
After years of pleading for changes to, in their view, level the playing field with their cousins in beer- and wine-making, small distilleries will be able to sell their product in single servings on site if legislation continues to advance through the Iowa Legislature.
“It’s the bill that we need to get parity with the states around us, and it also puts spirits closer to a level playing field with beer and wine in the state,” said Jeff Quint, owner of Cedar Ridge Winery and Distillery in Swisher. “It’s what we’ve been looking for.”
Small breweries and wineries have been allowed to sell their product by the glass on site, but state law prevents distilleries from doing the same.
Distillers have spent the past few years lobbying state lawmakers to change that, but previous proposals did not garner sufficient support.
This winter, the state formed a task force to examine the issue. The group was comprised of representatives from the beer, wine and liquor industries, plus the governor’s office, the state department that oversees alcohol regulations and the state economic development department. It met seven times over five months to hear from experts and discuss the state’s alcohol laws, many of which have been unchanged since Prohibition.
One key result of the task force’s work was proposed legislation that, for the first time in these past few years, is not opposed by any of the vested interests.
The proposal would allow small distilleries to sell their product — a cocktail, for example — on site and allow large distilleries to have sample tastings and to sell two bottles per person per day.
“When people go to visit a winery or a brewery or a distillery, they do a tour, and then they want to have a taste, and then they want to buy a bottle,” said Andy Anderson, an attorney for Templeton Rye in Templeton. If the bill is approved, the company plans to build a new distillery in Templeton. “It’s harder to do this if you can’t do tasting, can’t sell a couple of bottles. This bill really gives us this opportunity.”
The bill would provide double the relief for Quint’s business. Because Cedar Ridge is both a winery and distillery, it can sell neither spirits nor wine on site, even though other wineries can.
“It’s been very restrictive for us,” Quint said. “Since I’m both, I wasn’t able to do that (sell wine by the glass).”
Garrett Burchett, owner of Mississippi River Distilling Co. in LeClaire, said he is “thrilled” with the proposal.
“It’s a right step in terms of parity with other states and in terms of parity with wineries and breweries in Iowa,” Burchett said.
Previous legislative proposals have been opposed by the Iowa Wholesale Beer Distributors Association. The group, which represents the state’s beer distributors, raised concerns with proposals that in its view weakened the so-called three-tier system, a set of alcohol regulations that requires buffers between producers, distributors and retailers.
The distributors association is not registered in opposition to the current bill, a changed from years past. It is registered as undecided but has given no indication it will work to stop the bill in its current form.
“We have worked with the distillery industry since the Legislature’s adjournment last year to find a solution that accomplishes what they asked for — a way to promote their product to consumers at the manufacturing site — and beer distributors’ desire — to provide a narrow, accountable and long-term solution to the problem,” Nathan Cooper, executive director of the distributors association, said in an email statement.
“From our perspective (the bill) is a reasonable way to accomplish those goals.”
Many industry officials and state legislators credited the task force with forging a bill that they said contains compromises and forged consensus. Created by Gov. Terry Branstad to examine the issue, the task force was led by Steve Larson, director of the state’s Alcoholic Beverages Division, and Debi Durham, director of the state Economic Development Authority.
“I honestly think (the bill) has done as well as it has so far because of that (task force),” said Robert Bailey, spokesman for the Alcoholic Beverages Division. “A lot of recommendations that came out of the study group were added onto this technical bill. ...
“We saw through the whole process, we recognized the inequality there was in the manufacturer sector in Iowa. Beer had more (opportunities) and wine had more, and distillers were left with the short end of the straw, so to speak.”
The proposal still has a long legislative path to travel; it has passed two Iowa House committees but still must pass the full House, two Senate committees and the full Senate before heading to the governor’s desk for his approval.
But industry officials and legislators last week expressed optimism the bill will pass based on one key fact: None of the vested parties is opposed to it.
“I think it’s a great bill. We’ve been working on, I think this is the third year, and we finally have all the interested parties agreeing to this,” said Rep. Guy Vander Linden, R-Oskaloosa, chairman of the House committee that approved the bill last week. Vander Linden also has worked on the issue in previous years.