Lawmakers back bill for small distillers

Lawmakers in West Virginia have voted in favour of a bill to lower the state’s mandatory markup fees and taxes on alcohol sold at distilleries to alleviate financial strains on small producers.

Lawmakers have voted in favour of a bill to help small distilleries in West Virginia

Aimed at helping small distilleries, Senate Bill 547 passed the House of Delegates on Tuesday with a majority vote of 91 to eight in its favour.

In 2005, a three-tiered system of controls called bailment was introduced to govern the state’s 11 distilleries.

The system requires distilleries to “ship” their products to Nitro, West Virginia, via paper transactions where the West Virginia Alcohol Beverage Control Administration (ABCA) marks up the price by 28%, then adds an additional US$3.30 per case for shipping.

Then, the state also taxes the case by an extra 10%, paid for by the distilleries and retailer, before another 10% market-zone tax is also piled on, which goes to alcohol retailers in the region.

Under the new bill, the state’s 28% markup fee on the price of products sold to consumers at distilleries would be lowered to just 5%.

Furthermore, the 10% market-zone payment would be reduced to 2% of gross sales price or for the value of all sales at the distillery each month, with maximum “market-zone” payments that distilleries must pay each year capped at US$15,000.

A fee of US$0.80 per case would still be implemented, however small distilleries would be permitted to generate up to 50,000 gallons per year, compared to the current 20,000 limit.

It comes in light of the wake of the closure of Bloomery Plantation Distillery, which blamed the current “unfair, unreasonable process” that caused its profits to “haemorrhage”, as reported by the Herald Mail Media.

The Senate has been informed of the vote and will need to vote on the change before it can be forwarded to governor Earl Ray Tomblin for consideration.