Bloomery before. Well, maybe again.
WE NEED YOUR HELP.
March 10, 2015
UPDATE: Your voices have been HEARD! The Senate and House passed SB 574 to lessen the tax and fee burden on WV Craft Distillers. We need your help NOW in urging Governor Tomblin to “SweetSign” our Bill into law. Please take three seconds to sign the petition:
We hope to be serving you soon!
February 10, 2015
Effective immediately, Bloomery Plantation Distillery, Charles Town, WV, has closed its doors. We cannot re-open our doors until Prohibition-style laws that are strangling our business are changed. We reached out to the West Virginia Alcohol Control Board to help clarify the ambiguities and inconsistencies in the code. But the Commissioner has responded that his hands are tied. He suggests that we present to the legislature our needs and have the current Prohibition-era laws updated to reflect current market needs.
Our Eastern Panhandle legislators have all been very supportive and certainly understand our plight. The legislators have assured us they are working to resolve this problem quickly. There are procedural steps that are underway. Fingers crossed.
What’s at stake? Ten distilleries in West Virginia are at stake. Economic development, tourism, agriculture, and jobs are at stake. In this specific instance, Bloomery Plantation Distillery is at stake; an agricultural tourism small business that has won 21 state, national, and international awards; employs 17 people; and has brought 50,000 people through West Virginia in three short years, generating hundreds of thousands in tourism dollars which benefit the state and local economy and promoting West Virginia as a destination for both tourism and small business.
After imploring Commissioner Moats since November 24th, 2014 to review the regulations which have misclassified the distilleries in West Virginia as retail liquor licensees (liquor stores), and to realize the subsequent negative consequences on the craft distilling industry in West Virginia, Commissioner Moats has yet to render a decision. As a direct result of this, Bloomery Plantation Distillery is unable to continue its operations in WV.
Why? Over the course of the past three years, the WVABCA has misclassified the distilleries and mini-distilleries in West Virginia as holders of retail liquor licenses which are based on sealed competitive bids submitted to the WVABCA every 10 years (WV Code Chapter 60, article 3a). Neither Bloomery Plantation Distillery nor any other distillery in the state have ever participated in this sealed bid process allowing the sale of all alcohol, such as gin, bourbon, wine, etc., in the way that a liquor store does.
The distilleries in the state actually hold licenses to manufacture liquor and sell that liquor in their tasting rooms as opposed to being holders of retail liquor licenses (WV Code Chapter 60, article 4). This resulting misclassification forces distilleries and mini-distilleries to go through the WVABCA’s bailment system in the same way as liquor stores in the state do per Title 175 of the Legislative Rule of the WVABCA which governs the bailment process.
The problem? Per our conversations with the Distilled Spirits Council of the United States (DISCUS) and review with our legal counsel, distilleries are actually exempt from going through the bailment system. WV Code Chapter 60, article 3a-17 requires that retail licensees purchase liquor from the WVABCA. Because distilleries, including Bloomery Plantation Distillery, do not hold retail liquor licenses, rather, they hold a license to manufacture and sell as a distillery, they are not required under this section to purchase liquor from the Commissioner; as such, they are exempt from the bailment requirements of Title 175.
So what is bailment? What this term means is that a distillery or mini-distillery in WV first has to sell its bottles at wholesale to the WVABCA at a set price, which then marks the bottles up at 28% of the price at which it purchased the bottles from the distillery. The distillery then has to buy the bottles back from the WVABCA at that 28% markup. In addition, the distillery then is required to mark those bottles up a further 10% (minimum) to sell at retail in order not to have a competitive advantage over the retail liquor license holders in the area. The distillery is then required to pay a 10% Market Zone Tax, back to the WVABCA on all of its retail sales. Those monies are then distributed to the three or more retail liquor licensees (the local liquor stores) in the surrounding market zone of the distillery.
So what does all of this mean? Bailment has been a major factor in precluding growth of distilleries in West Virginia. For example: Bloomery Plantation Distillery produces a handcrafted, farm-fresh bottle of SweetShine for $10. We sell this bottle to the state at $14. They mark the bottle up, and we buy it back for $19. We sell it at retail for $24, and then pay the state back $2.40 so that they can give that money to the local liquor stores. This is all in addition to the 11% that our customers are charged in the form of alcohol and sales taxes. If WVABCA handling fees – for cases which are never actually handled by anyone but us – are included at $3.10 per 6-bottle case, the WVABCA and the retail liquor stores make more than we do on each bottle we sell. Being misclassified as a retail liquor licensee is killing both a business and an industry in West Virginia.
What “liquor store” is required to give 10% of its retail sales to the other liquor stores in its area? What “liquor store” in West Virginia has the required overhead cost of growing lemons, ginger, raspberries, pumpkins, and other fruits, roots, and nuts? What “liquor store” is recognized as a leader in its niche and attracts fans and tourists from all over the country and, indeed, the world? What “liquor store” hires amazing fun-tenders and talented local musicians to entertain its guests, to provide a lasting memory of a fun and unique visit to the Eastern Panhandle? What “liquor store” refers its patrons to other liquor stores to purchase product, to other local businesses to shop and eat, and to explore all of the activities and experiences that Wild and Wonderful West Virginia has to offer? Not one. It’s time to stop the madness. We urge fans of Bloomery Plantation Distillery and indeed, any distillery in the state, to contact their state legislators and implore them to support the Prohibition Regulation Reform Actions to save the craft distilling industry in West Virginia and this small business. Hopefully it’s not too late.
Bloomery Plantation Distillery has thoroughly enjoyed growing here alongside and among the wonderful small businesses and incredible patrons who have frequented our beloved little cabin on the hill and experienced our history, hooch, and hospitality. Thank you.