State may loosen regulations to help small Wyoming distillers
September 10, 2020
CASPER — Wyoming lawmakers are considering allowing the shipment of Wyoming-made liquor across state lines as a part of a package of bills allowing greater flexibility for the state’s small distillers amid mounting economic challenges brought on by COVID-19.
Spurred by concerns of distillers like Casper’s Backwards Distilling and Kirby-based manufacturer Wyoming Whiskey, members of the Legislature’s Joint Committee on Corporations, Elections and Political Subdivisions voted almost unanimously to draft legislation allowing multiple retail licenses and the potential sale of the products over state lines: two solutions distillers hope could help recuperate revenues that were lost as a result of the pandemic.
The bills — which will be drafted ahead of the committee’s next meeting in November — come at a time where the state’s growing distilling sector has found itself without a critical tool in its ability to compete against domestic industry giants: in-person tasting.
According to testimony by Backwards Distilling’s Amber Pollock and Wyoming Whiskey founder Kate Mead, COVID-19 has delivered a “one-two punch to the craft distilling industry,” impacting both tasting room sales and sales on-premises, a long-term challenge only exacerbated by the industry’s inherent disadvantage to more established, national brands.
Nationwide, tasting room sales for craft distillers have fallen 41% during the pandemic, according to a joint report by the American Distilling Institute and the Distilled Spirits Council, while wholesale business during that same period has declined by approximately 25%.
“There’s no reason Wyoming shouldn’t be the best place in the country to open a distillery,” Pollock said. “We have the capacity for it, we have the opportunity for it if we keep working toward that legislatively. Because that’s what it hinges on: how our laws are written and how they’re taking our distilleries into account. We have that potential, and I’d like to see it realized over the coming years.”
What Wyoming’s small distillers need, Pollock told lawmakers, is flexibility, particularly within a state whose regulations are considered to be “less favorable” to craft distillers by the American Distilling Institute.
While the ability to ship their product directly to customers across state lines could present an option for those distillers, Pollock suggested another avenue to increase revenues in their own communities: allow distillers to sell their products at more than one location. This could address a common logistical problem for manufacturers occupying more industrialized facilities less conducive to casual foot traffic.
Because Backwards Distilling is limited to just one retail license, Pollock said that visitors to her industrial facility in Mills have to travel all the way to the business’ tasting room in downtown Casper if they are interested in purchasing the product directly.
By expanding the state’s permitting, Wyoming could allow distillers additional options to reach new customers and potentially create additional jobs.
Then there’s the question of shipping.
While lawmakers advanced legislation Thursday that would allow Wyomingites to order up to 108 liters of wine to their homes per year, the question of exporting Wyoming spirits through the mail is one that has yet to be answered.
Though states like Kentucky have recently updated their statutes to allow out-of-state liquor shipments directly to consumers, Mead said that logistics companies like UPS and FedEx have been reluctant to deliver Wyoming Whiskey’s products through the post, citing a lack of clarity in Wyoming law.
Though Sen. Charlie Scott, R-Casper, suggested merely looking into those barriers, Rep. Scott Clem, R-Gillette, pushed lawmakers to adopt language permitting the out-of-state shipment of those spirits, with the details to be hammered out at a later meeting of the Joint Corporations Committee this fall.
What shape those laws will ultimately take, however, is questionable.
In his own testimony on the bills, Department of Revenue Director Dan Noble — whose department oversees liquor sales within Wyoming — highlighted several potential constitutional issues with both pieces of legislation, including favoring small producers over larger ones, blurring the lines between retail businesses and manufacturers, cutting out the middle man, and costing the state revenues.
Though other states have advanced legislation that seems to violate those laws in the past with few problems, Noble warned that a groundswell of legislation could potentially prompt the intervention of the federal government, lessening Wyoming’s extensive influence on liquor laws as a monopolistic “control state.”
“We’re not selling Twinkies here; we’re selling alcohol, and there is a reason why we are regulating this product,” Noble said. “As many as 80,000 people a year are impacted — or sometimes die — from this product, and we want to be sure it is handled responsibly. That’s what the state’s task is, and that’s why it’s regulated in all 50 states.”