New Law Could Let Distillers Charge For Booze Tastings

St. George Spirits of Alameda used to sell glassware — and offer a complimentary taste of its spirits with a glass purchase. The reason? It's against the law for distillers to charge for tastings and sell bottles at their distilleries, like brewers and vintners can.

Although the Department of Alcoholic Beverage Control recently cracked down on St. George's creative interpretation of current regulations, St. George's tasting room might be charging for tastings as early as September. That's because the California Artisanal Distillers Guild is on a mission to pass a bill that would enable distillers to charge for on-site tastings.

It's not just St. George Spirits that would benefit. Making money with tastings would enable the craft spirits industry to bring in welcome additional revenue, says Michael Randolph, owner of SF Vodka. "It would help with marketing, and it would give me a huge budget to work with if I could actually charge for the tastings," Randolph says.

That additional revenue would also fuel creativity, according to Arthur Hartunian, CADG president, who distills spirits too. "We're all very creative, but you can't release a product to market if a distributor doesn't want to sell it," Hartunian says. Selling bottles and giving tastings on site would allow artisan distillers to try new ideas and innovate with small batches.

The bill originally proposed by the CADG also included direct-to-consumer bottle sales, "but it didn't come out that way," Hartunian says, explaining that there was unexpected opposition from large distributors and wholesalers.

Not every distributor was reluctant to back the bill, however. Adam Spiegel, owner of California Street Distribution, believes that changing the legislation to include bottle sales "will bring some great revenue to cash strapped businesses," Spiegel wrote in an email. It would also put more money into distributor's hands because of the increased production.

All of distillers we spoke with were baffled by the opposition, believing, like Spiegel, that on-site bottle sales and tasting rooms would also be beneficial for distributors and retailers.

After a customer's first on-site taste or bottle purchase, spirits drinkers are probably not going to return to the source for a re-supply, says St. George distiller Lance Winters. However, "when they go to a restaurant to order a drink and they see St. George Spirits on the menu, they'll say 'oh, I've been there before, use their gin for my martini,'" he says. This could then lead them to their local retailer to buy more. "It's going to help each of those accounts."

Hartunian and Winters say that tasting rooms and on-site bottle sales have the added benefit of improving the economy in California. "Mostly local distillers use local supplies, local trucking companies, glass makers — all of them are California companies," Hartunian says.

Winters also mentioned that the current legislation is holding back California distilleries' ability to compete with distillers in states with more progressive tasting and sales regulations. Out-of-state craft spirits companies can use the additional revenue from onsite tasting and sales to "beat us in our home market," Winters says.

 
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