New state law frees distillers to sell more of their liquor | Food Feature | Indy Week
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New state law frees distillers to sell more of their liquor 

Rim Vilgalys of The Brothers Vigalys Spirits and his Krupnikas, a Baltic-style honey and spice liquer

Photo by Justin Cook

Rim Vilgalys of The Brothers Vigalys Spirits and his Krupnikas, a Baltic-style honey and spice liquer

Everyone's complaining about the heat, but no group is more eager for fall than North Carolina distillery owners. Beginning Oct. 1, they can sell their liquor directly to customers, instead of sending them to an ABC Store.

Four years in the making, the hard-won victory is very limited. The new law allows distillers to sell just one bottle of booze made on premises—for off-site consumption—per person, per year. That's not one bottle of each variety a distiller makes, but one bottle, period.

Still, distillers call House Bill 909 a game changer. Scott Maitland of Chapel Hill's TOPO Distillery, North Carolina's first organic operation, says states with similar provisions have reported "substantial increases" in the sale of all state-made liquors.

"I'm happy that we were able to achieve one of our goals, which was to allow a distillery to sell a little something to visitors," says Maitland, a key proponent. "People who opposed this thought it would weaken the ABC system. From the beginning, that's been a false idea. It's always been about making North Carolina distilleries a bigger participant in the ABC system."

"I think the representatives realized it's a smart thing to do for job creation and tourist revenue," says Jeremy Norris of Broadslab Distillery, which produces whiskey and rum with grains grown on his family farm in Benson. "People come out here, take the tour and want to buy the product. When I'd say that I couldn't sell it to them, they didn't understand. It's going to create a lot of new customers."

Chris Mendler of Raleigh Rum, which entered the rapidly expanding market in April, is grateful for the diligence of those who advocated for the law. "They blazed the path for us," he says. "It's a baby step, but one in the right direction. We're happy that we won't have to turn down business when people say they want to buy a bottle at the end of a tour."

Before selling that first bottle, distillers have a lot of work to do. Each needs to create a searchable database to track sales and ensure compliance with new regulations. Some distillers may need to relocate.

Rim Vilgalys of The Brothers Vilgalys Spirits Company has enjoyed renting an affordable space near Golden Belt on the east side of downtown Durham. While it's a perfect spot for its annual production of 10,000 bottles of Krupnikas, a Baltic-style honey and spice liqueur, Vilgalys says the bare-bones facility is not adequate for frequent tours and onsite sales.

He had been discussing starting an event space with an attractive street-level presence he could share with other distillers. However, the rule that bottles must be sold at the seller's distillery squashed that idea.

His current space involves similar complications. Vilgalys sublets to Barrister & Brewer, which bottles Mystic Bourbon Liqueur and Pebble Brook Spirits, producer of an apple pie-flavored liqueur. This helps reduce Vilgalys' overhead, but his tenants will likely want to relocate since they won't be able to sell their product from his address.

In coming weeks, Vilgalys will debut four new lower-alcohol options, which will be made from the same base as Krupnikas but sweetened with cane sugar instead of honey and flavored with various botanicals.

While Vilgalys won't rely exclusively on North Carolina-grown ingredients in these creations, TOPO's Maitland says North Carolina distillers have more options to use local ingredients than do makers of craft brews.

"Legislators are finally seeing this, and they see that distillers are even more dispersed among rural communities because of the agricultural connection," Maitland says. "It's growing faster than brewing did, which was very fast, and it's going to continue to grow everywhere across the state."

At Pittsboro's Fair Game Beverage Company, Chris Jude uses sorghum grown in Silk Hope and syrup made in Lexington to produce No'Lasses, a rum-like liquor. "This change is a very big deal for us," says Jude, who debuted the spirit in March. "It's pretty difficult to break into the market in North Carolina. Not being able to sell at distilleries is a big issue when you're trying to go up against multinational brands with multimillion dollar marketing budgets."

Jude says distillery sales will leverage the enthusiasm of visitors who tour the operation and sample beverages in their handsome tasting room, which they hope to convert into a bona fide taproom with cocktails, Fair Game wines and local beers. "Without onsite sales," he says, "all we can do is hope they remember us the next time they go to an ABC store."

The law also will help small producers who make creative "one-off" and specialty products that ABC stores have been reluctant to stock. Maitland is counting on the new law to help TOPO sell an organic straight whiskey made with local wheat that he believes will be the first of its kind in the United States.

"It's a rare product and it will cost $79 a bottle," Maitland says. He hopes to introduce it by Oct. 1, the day onsite distillery sales officially begin. "ABC boards have cash flow issues. I understand that. But if we create a demand for it, they'll be more likely to carry it. From a marketing perspective, it's a big win for all of us."

This article appeared in print with the headline "The spirits are willing."



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