If you make hooch, the state gets its cut

CHAPEL HILL -- State law allows Scott Maitland's Top of the Hill restaurant to brew beer and sell it straight to customers.

Now he plans to open a small distillery, jumping onto a small but growing trend of micro-stills that are cropping up across the country, hoping to offer his patrons and other customers his own line of spirits.

There's just one catch: If he wants to sell his liquor to customers, he'll first have to buy it back from the N.C. Alcohol Beverage Control Commission -- at a large markup.

North Carolina is one of 19 "control" states in the U.S., meaning that state government manages all liquor sales. Even bars and restaurants have to buy their hooch from the local ABC. People with the right semi-shady connections can buy a mason jar of moonshine fresh from an illegal still not far from the Triangle, but in North Carolina you can't buy shots of bourbon made by the owner of your favorite watering hole.

That's one reason why there's only one licensed liquor-maker in a state where making moonshine is an illicit tradition.

Maitland plans to become the state's second licensed distiller, legally making vodka, gin, rum and bourbon in a small factory at the northern edge of Chapel Hill, miles from his posh brewpub at Franklin and Columbia.

"Visitors will be able to learn and see the entire process -- from water to vodka or any other liquor," Maitland said by e-mail.

Maitland wants to process local grain and molasses in two 650-liter stills with 12 barrels for aging. They'll distribute it to liquor stores across the Southeast.

If Maitland's plans become reality, Top of the Hill Distillery will be among fewer than 30 licensed facilities in the United States making small batches of artisan whiskey, according to Bill Owens, president of the American Distilling Institute. All told, there are more than 150 micro-distilleries across the country, making whiskey, vodka and other spirits.

"They're going to play a good high-end game. They're going to elevate the industry," said Owens, who visited Top of the Hill's brewery on Franklin Street last year. "They've got all the ducks in a row. ... Learn how to make beer before you even talk about making whiskey."

Opening a micro-distillery is a natural next step for a brewpub like Maitland's, said Owens, because expertise gained from brewing beer will help the transition to distilling whiskey and other spirits.

Homegrown liquor

Piedmont Distillers Inc. in Madison, north of Greensboro, is the only licensed liquor producer in North Carolina, making two legal "moonshine" drinks out of corn: Catdaddy and Junior Johnson's Midnight Moon.

Joe Michalek started Piedmont in 2004, 10 years after he moved to the Triad area from the Northeast. He tasted his share of fruit-infused moonshines at backyard barbecues and decided to team up with Johnson and bring them to the open market.

Johnson, the legendary stock car champion, did a stint in federal prison decades ago after getting busted while tending his daddy's still.

And the storied origins of NASCAR are rooted in the souped-up cars that moonshiners used to race their product from hidden stills to urban markets.

"The more and more I encountered it, the more and more I was impressed by the flavor," Michalek said. "It always has been a craft business. ... It's driven a lot by pride."

Craft distillers are thriving in states such as California, Colorado, Texas and New York, all of which have private liquor distribution. Last year, The New York Times reported that 10 to 20 new micro-distilleries were opening every year in the United States.