Hand Sanitizer Won’t Cut It: NJ Distilleries Ask Congress For Help
Trade associations representing more than 25 distillers in New Jersey have sent a letter urging Congress to provide additional economic relief during the pandemic.
Before the pandemic, New Jersey's distilled spirits industry had been thriving, supporting more than 55,000 jobs and $4.6 billion in economic activity in 2018.
New Jersey Craft Distillers Guild President John Granata said things have been challenging for the distillers since COVID-19, especially with the closing of their tasting rooms and the inability to connect with customers the way they had been doing before.
Some distilleries were making hand sanitizers when the pandemic hit. Granata said it kept staff busy and customers interested but it was a costly investment.
With all the changes and the executive orders, distilleries have had to re-invent themselves multiple times. Unlike other licenses in New Jersey, the distillers have been discriminated against, said Granata, because they were never given any provisions to do residential deliveries like the breweries and wineries.
Distilleries can now do to-go cocktails, said Granata. But not having connection to customers has brought business down considerably. He said some distilleries have had to let go some of their skilled employees.
While he does not know exactly how much money the spirits industry has lost in New Jersey, Granata said he thinks he can speak for everyone that at least 80% of the business disappeared overnight.
So the distilleries are hoping Congress will act swiftly to enact further measures that provide liquidity and certainty to distillers.
Granata said three years ago, the industry lobbied to get a federal excise tax reduction and got it. At that time, it was a reduction from $13.50 per gallon of alcohol down to $2.70 per gallon for the first 100,000 gallons any distillery made. It was a two-year law but last year it was extended to December.
Granata said if nothing is done to help them by December, that $2.70 a gallon excise tax will jump back up to $13.50 a gallon.
"That would literally wipe out probably more than half of the distilleries across the country," said Granata.
The tax is less than $10 on 31.5 gallons of beer, added Granata.