HUNTSVILLE, Ala – When hand sanitizer supply was running low, countless distilleries pivoted their production to hand sanitizer, often giving it away for free to frontline workers. Now, those distilleries are facing a $14,000 fee from the FDA.
“If it’s left untouched, it’s not going to be pleasant. A lot of people, especially the small guys, are going to exit the business,” said Jeff Irons, the owner of Huntsville-based Irons One Whisky Distillery.
The distilled spirits industry is only getting started in Alabama. There’s only about 20 or so in business.
This comes as small businesses across the country struggle to keep their doors open amid the pandemic. Thursday was also the deadline for businesses to go online and unselect their hand sanitizing ambitions or face more FDA fee’s in 2022.
For the most part, distilleries stopped or slowed hand sanitizer production down several months ago when national supply stabilized.
“I started getting all sorts of phone calls from people saying, hey do you need hand sanitizer? Because we have it by the train load. I was going, I think I’ll stop making it now,” said Irons.
National distillery groups are urging businesses to hold off on paying the $14,000 fee while they work with lawmakers and the FDA. The American Craft Spirits Association says the aforementioned task has been difficult because of the holidays.
The word difficult doesn’t cut it for distilleries who often rely on now-closed tasting rooms, let alone spirit taxes in states like Alabama.
“We pay a more reasonable federal tax now on whisky. State taxes are fairly high. We have the 4th highest state tax in the United States of America,” said Irons.
Months ago, Irons noticed distilleries were trying to sell their equipment. He fears the FDA fee issue will do the economy no favors.
“It’s a challenging environment for small businesses. Let’s make it a little bit more pro small business than we are right now,” said Irons.