NC distilleries operate under new laws
For the first time since Prohibition, liquor bottles are being sold outside of the state’s Alcoholic Beverage Control system.
A new law, in place for a month, is allowing craft distilleries to sell visitors a single bottle of their product. It’s a small but significant shift in how liquor is distributed in North Carolina, which has long maintained a tightly controlled system of state-run ABC stores.
The distillery sales are among several newly relaxed restrictions on alcohol sales in North Carolina. Beer and wine retailers can now sell alcoholic cider and wine in glass jugs called “growlers” that have become popular in recent years to take draft beer home.
Retailers and distillers both say the changes should result in stronger revenues for their businesses. Critics worry about what’s next.
Until last month, Broadslab Distillery near Benson had to send visitors to the nearest ABC store after an on-site tour. Because of that, the tours weren’t profitable for owner Jeremy Norris.
“By the time I paid the labor to get the venue open, we didn’t make any money,” Norris said. “All the people who participated in tours expected to buy a bottle. They were real confused when you told them you couldn’t sell it to them.”
Before you can get a souvenir bottle of Broadslab’s spiced rum or “Legacy Shine,” a white corn whiskey, Norris’ staff scans driver’s licenses into an app that ensures the buyer hasn’t bought a bottle within the past year.
While the tight controls mean that only a tiny percentage of liquor sales will occur outside the ABC system, the law change wasn’t without controversy.
The Christian Action League was among several conservative groups that lobbied against the bill, which was signed by Gov. Pat McCrory in June. It went into effect Oct. 1.
The league’s director, Rev. Mark Creech, worries that distillery sales could be the first step toward a privatized liquor sales system in North Carolina.
“I have described the bill as a crack in the windshield of our ABC control system,” Creech said. “Once you start allowing the sale of liquor outside our ABC stores by anybody, you will be hard-pressed to deny that right to others.”
But Norris says the state’s growing number of craft distilleries likely wouldn’t back a privatization plan. That’s because the state’s centralized ABC system helps small businesses get their products in stores across North Carolina.
In states with private liquor stores, Norris said, “it’s a lot more work as far as getting widespread business, and the business gets a little more cutthroat.”
The N.C. Distillers’ Association has other legislative priorities it will be lobbying for, according to Scott Maitland of Top of the Hill Distillery in Chapel Hill.
“This is a good first start, there’s plenty of things that need to happen,” he said. Distilleries face far more complicated permits than wineries and breweries when offering tastings at festivals and events. They also want the ability to make cocktails in their tasting rooms and sell more than one bottle per customer per year.
Maitland says North Carolina lags behind other states in creating a friendly environment for craft distillers. More than 40 other states have been allowing distillery bottle sales for years.
“North Carolina has a strange relationship to liquor,” he said.
Despite the restrictive laws, new distilleries have been opening at a rapid pace. The state’s first opened in 2008 in Rockingham County, and when Maitland sold his first bottles at Top of the Hill in 2012, his distillery was the state’s fifth. Now there are 27, including seven in the Triangle.
“We’re seeing the same kind of beneficial impact in our urban and rural communities (from distilleries) as we’ve seen with breweries,” Maitland said. “We’re actually off to a much faster start on the distillery side, and we seem to be more geographically diverse.”
Maitland expects the new law will encourage more distilleries, and he said Top of the Hill is already adding more tours to keep up with demand.
“Suddenly the department of tourism and a host of other state agencies are now working with the Distillers’ Association,” he said. “We’re coming up with trails and doing all the agritourism that’s common for wineries and breweries.”
While distilleries ramp up bottle sales, wine and beer stores are now selling wine and hard cider in growler containers – an option for home consumption that had been confined to beer until Oct. 1.
Wine 101, which has locations in Wake Forest and Northwest Raleigh, has added wines on tap and fills one-liter growlers, which are larger than the standard bottle size.
Owner Joe O’Keefe says that quality wines are now being distributed in kegs, and refilling a glass growler can be less expensive for customers.
“The cost per ounce is significantly less,” he said. “They’re getting more wine for less money. It’s cheaper because there’s no glass, there’s no labels.”
Customers buy the growler for $6.99, then each fill-up runs between $20 and $29, depending on the wine. Without any advertising, O’Keefe says his customers have quickly taken to the new option.
“It tastes really good off the tap, it’s really fresh,” he said. “I bought 100 growlers a week and a half ago, and we have four left.”
The growler law change was pushed by the growing number of craft cider businesses in North Carolina. While cider is often served on tap next to beers, state law puts the “fermented fruit” in the same category as wine.
Bottle shops like The Glass Jug in South Durham can now fill growlers with cider as well as beer.
Glass Jug owner Chris Creech said customers have wanted cider on draft, but until October he only sold it in bottles. And since some small local cider producers like Bull City Ciderworks don’t offer bottles, it means more of their offerings will be available for home consumption.
Coming directly from a keg, “it’s going to maintain the carbonation and the freshness,” Creech said.
Like distilleries, the number of cider producers in North Carolina has grown rapidly.
“It’s riding the coattails of craft beer,” Creech said. “We’ve seen a big jump in the varieties of ciders available and the amount being produced, and also the demand for it.”
Triangle distillery tours
The Brothers Vilgalys in Durham, brothersvilgalys.com
Top of the Hill Distillery in Chapel Hill, topodistillery.com
Broadslab Distillery near Benson, broadslabdistillery.com
Raleigh Rum Company in Raleigh, raleighrumcompany.com
Durham Distillery in Durham, durhamdistillery.com
Fair Game Beverage Co. in Pittsboro, fairgamebeverage.com
Seventy Eight °C Spirits in Raleigh, 78cspirits.com