Few things help beat back the Arizona heat like a stiff drink from one of the state’s budding craft distilleries.
Still, many Arizonans are forced to suffer the summer sun without their drink of choice due to the way the craft liquor industry is regulated in the state.
Indeed, while craft liquor is experiencing something of a golden age across the country, Arizonian distillers are forced to contend with a raft of restrictions unique to their industry, inhibiting their ability to reach a growing base of thirsty customers.
Fortunately for distillers and liquor connoisseurs alike, relief may be on the way. An omnibus liquor bill working its way through the Arizona Legislature would loosen, lift or streamline many of the state’s craft distilling regulations.
Under initial regulations for the industry released in 2013, distilleries making less than 20,000 gallons could apply for a craft distiller’s license, permitting them to produce liquor for wholesale in the state. They could also serve consumers at their distilling site and operate a single off-site tasting room.
While these regulations allowed the industry to officially establish itself in the state, they also put a ceiling on its ability to grow.
Gary Ellman, of the Arizona Craft Distillers Guild, a trade organization, says the industry is being hurt by the state’s prohibition on straight-to-consumer shipping. The ban adds distribution expenses for cost-sensitive distillers and prevents them from reaching consumers in areas not served by wholesalers.
That complaint resonates with Dana Murdock, president of Thumb Butte Distillery in Prescott, Arizona. She says she currently has to turn away customers because of Arizona law.
“Not a day goes by that I don’t get an email or call from someone wanting to buy a bottle and have it sent to their home,” Murdock told Watchdog.
Also frustrating many craft distillers is the state cap on the number of days they are permitted to serve at festivals, currently set at 75 a year. For many distillers, festivals offer an invaluable opportunity to spread brand awareness and meet potential customers.
This is certainly the case for small town distillers like John Patt, who operates Desert Diamond Distillery with his wife, Deborah, in Kingman, Arizona. Since the town has a small population of about 28,000, Patt relies on the festival circuit to promote Desert Diamond’s brand. Any limitation on the number of festivals he can do, he says, is a limitation on the ability to educate customers on the products he offers.
Fortunately for Patt and Murdock, H.B. 2337 would help alleviate their concerns on both these issues. Under the bill, the cap on festival days would be doubled to 150 days a year, and the process for obtaining a festival serving permit would be streamlined. The restriction on straight-to-consumer sales would be lifted, as well, allowing all craft distillers to directly serve customers.
Distillers have other benefits to cheer if the bill becomes law. H.B. 2337 allows for a second off-site tasting room, which many say would allow them to cope with local zoning regulations that have restricted them to industrial areas of the city. It also lowers the the proportion of liquor licenses per person from one for every 10,000 people to one for every 5,000 people.
Going down smooth
For something as controversial as liquor regulation, the bill has had a relatively tranquil journey through the Legislature. The House passed the bill in February with only 11 no votes, and a similar reception is expected in the Senate. On Monday, the Commerce Committee approved the bill on a 6-1 vote.
The bill now moves to the Senate floor, where it awaits a vote from the full chamber.
Christian Britschgi is an Arizona reporter for Watchdog.org. Contact him at [email protected]