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COCOV V E ID R A - 19 GE
REGULATORY RESPONSE to COVID-19 the
LESSONS FOR MOVING FORWARD W R I T T E N B Y C O R E Y D AY
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he novel coronavirus pandemic has disrupted nearly every facet of our lives, yet through all the change and confusion there have been bright spots. Many distilleries pivoted from crafting their own unique spirits to mass-producing hand sanitizer to fill that gap in the supply chain. It is heartening to see members of the craft spirits industry pull together to help their communities. At the same time, distilleries are struggling. Regulations and guidance on how to operate and what is permissible are changing rapidly. Distilleries are facing new questions on multiple legal fronts, from the propriety of employee temperature checks to how to comply with the level of sanitation required before opening to the public. The unfortunate reality is that some distilleries may not be able to weather the storm. Fortunately, many states — though far from all — have instituted some form of regulatory relief for the alcohol industry. The variation of relief state-by-state, and in some cases county-by-county, is creating a natural experiment of sorts. Our hypothesis is that the jurisdictions that act quickly and creatively to alleviate some of the operational hurdles distilleries are currently facing will have the lowest distillery closure rate. Looking forward, we hope that the temporary regulatory relief measures implemented during the pandemic lead to more permanent legal changes, thereby easing restrictions on distillers and their ability to do business. In this article, we summarize the regulatory relief granted to licensed distilleries across the U.S. due to COVID-19 for two primary reasons: as a short-term resource to assist distillers and customers during the pandemic, and as a long-term resource for those seeking
Looking forward, we hope that the temporary regulatory relief measures implemented during the pandemic lead to more permanent legal changes, thereby easing restrictions on distillers and their ability to do business. 72
to amend the law governing distilleries in their home state on a permanent basis. First, we look at the temporary regulatory relief made available to distilleries by state and county liquor authorities during the pandemic. If your distillery is located in a state that has not offered any form of regulatory relief, the information contained in this article provides a useful model for seeking action from your own state regulators. For instance, if curbside delivery (with the appropriate social distancing protocols) is providing a meaningful business solution to distilleries in Oregon and allowing consumers to avoid another trip to the liquor store, the concept could potentially work in your state too. If alcohol delivery in Arkansas didn’t lead to a reported spike in underage consumption, why would your state be different? Second, if a state is willing to make a temporary change to support businesses during a crisis, why not make that change permanent? The longer these temporary changes last, without some disproportionate negative consequence, the harder it will be for states to reverse those changes. In fact, some states have already enacted permanent changes during this pandemic. Kentucky, for example, expedited the passage of their direct to consumer delivery bill. Now may be the best time to raise these ideas with your local legislature. Now, a caveat. This information is, by necessity, a snapshot in time. By the time you read this article, some of these changes will be gone, some expanded, and some still in place. With that said, you should frequently review your state’s, or county’s, regulatory guidance for the most up-to-date information.
50 STATE SURVEY First, the disappointing news. We identified twenty states1 that have not implemented any regulatory relief2 for distilleries. Some states made no changes for the alcohol industry in general. Other states offered relief to some licensees, such as beer and wine licensees, but not to distilleries. Other states were less than crystal clear on whether relief provided to other licensees also applied to distilleries. 1 Arizona, Georgia, Iowa, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, New Mexico, Oklahoma, Puerto Rico, South Carolina, South Dakota, Tennessee, Utah, West Virginia, Wisconsin, and Wyoming. 2 This survey was looking at changes in response to COVID-19, specifically. It is possible that some of these states may already allow to-go sales or delivery.
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