In a letter sent today to Utah’s congressional delegation, representatives from 14 distilleries throughout the state urged Congress to provide additional economic relief to distilleries facing enormous financial hardship due to the impact of COVID-19. The letter was sent from Hammer Springs Distillers, Dented Brick Distillery, Ogden’s Own Distillery, New World Distillery, Distillery 36, Clear Water Distilling, Salt City Vodka, Salt Flats Spirits, Sugar House Distillery, Outlaw Distillery, Holystone Distilling, Beehive Distilling, Waterpocket Distillery and Alpine Distilling.
The letter notes that Utah’s distilled spirits industry had been thriving prior to COVID-19, supporting more than 3,000 Utah jobs and $431 million in economic activity in 2018.
“Today, because fewer Americans dine and drink outside of their homes, travel, or attend large events, distilleries across the state have lost sales at an enormous rate,” the letter states. “Due to the impact of the pandemic, many Utah distilleries have been forced to furlough or lay off employees, and some are facing the hard decision of whether to close their doors permanently.”
The distilleries urged Congress to act swiftly to enact further measures that provide liquidity and certainty to distillers who have seen sudden and steep declines in sales with the closure of distillery tasting rooms, restaurants and bars.
According to a survey of craft distillers, by the Distilled Spirits Council of the United States and the American Distilling Institute, two-thirds of respondents do not believe they will be able to sustain their businesses for more than 6 months.
The survey, which included feedback from 118 distilleries across 35 states and the District of Columbia, found that approximately 43 percent of distillery employees have been let go or furloughed since the start of the COVID-19 crisis. The average distillery respondent had almost 14 employees before the COVID-19 crisis and has let go nearly 6 employees.
In the letter, the distilleries specifically urged Congress to support the recovery of their businesses as well as restaurants, bars and other on-premise establishments by:
- Passing the Craft Beverage Modernization and Tax Reform Act (S. 362/H.R. 1175), which includes a critical tax cut for craft distillers. Craft distillers in Utah will face a 400% increase in their federal excise taxes in January 2021 if Congress does not act by year’s end.
- Supporting the RESTAURANTS Act, which provide grants to eligible establishments for payroll, benefits, mortgage, rent, utilities, and other expenses and is a critical step forward for the recovery of the hospitality industry.
- Seeking the suspension of tariffs on distilled spirits. The EU tariffs, which have been in place since June 2018, have had a devasting impact on our American Whiskey exports, including from Utah distillers, resulting in a 41 percent decline from $757 million (July 2017 to June 2018) to $449 million (August 2019 to July 2020). The EU may impose new tariffs on other U.S. spirits in the coming weeks if these trade disputes are not resolved soon.
“We are extremely proud that more than six small, medium and large distilleries across Utah did their part to prevent the spread of COVID-19 by transitioning to produce hand sanitizer, but they will continue to need the help and support of Congress for months to come,” the letter stated.