Twelve 33 Kevin Oborn distillery owners are donating hand sanitizer for free in response to the COVID-19 coronavirus emergency. Osborne put out two of his 100-gallon heaters, following World Health Organization guidelines for creating the mixture. Jonathan Blitz was surprised when he got the news that his distillery in Durham, Mystic Farm, and Distillery, had to pay approximately $14,060 to the Food and Drug Administration which was quite stunning for him. The FDA was evaluating a tax on hundreds of distilleries, such as those that came from alcohol extraction to hand sanitizer, to fill the shortfall when the coronavirus infection was wiped out across the country in March-April.
In an announcement published this week, the FDA said it was allowed to collect fees under the Coronavirus Aid, Relief, and Economic Security or CARES Act which assisted businesses, governments, and victims in this disease. Distillers like Blitz have never been seen coming. The cries of distillers and their trade groups reached the leaders of the Department of Health and Human Services, which includes the FDA. They issued a statement late Thursday saying they would not have to pay the tax. That news was praised by the American Craft Association and its president, Becky Harris of the Catoctin Creek Brewing Company in Virginia.
In April, at least 35 distilleries in North Carolina operated manual cleaners, according to Carol Shaw, director of the North Carolina Distillery Association. Many of the washing machine manufacturers faced difficulties, Shaw said, including the Dock Porters refurbishment facility in Charlotte, which closed and lost revenue. For Mystic, manual production took over the entire facility, Blitz said. All of the tanks were used to make a hand-held washing machine, forcing the company to suspend production of their standard production of whiskey for five months. The industry will feel the effects of the pivot in 2023 or 2024 when it sells that whiskey, Blitz said.
The company has resumed whiskey production. Pete Barger, owner of Southern Distilling Company in the Statesville, said he spent a lot of money to make a hand-held cleaning machine, including hiring attendants and installed attendants. He financed in the capital and driven to meet FDA requirements for hand sanitizer. When he first saw the fee, he thought to himself, “Thank God, this is not $ 100,000,” he supposed. But at the same quick look, it is a vast amount of money for a small company, where they are not the main hub of what they do day in and day out.
Durham Distillery began making hand sanitizers in April, said President and CEO Melissa Katrincic. She was “shocked” when she first heard about the tax, she said. Distilleries were in a unique position to make a hand sanitizer because of their equipment and alcohol, Katrincic said. Durham Distillery provided a hand-held cleaning machine to restaurants, bars, first responders, health care workers, and shelters, she said. Not only did distilleries have to stop producing spirits, but they also had to follow FDA guidelines and get approval, as well as find the plastic containers to hold the hand sanitizer.