Utah distillers seek economic help from Congress

(Rick Egan | Tribune file photo) Dented Brick Distillery, makers of Antelope Island Rum, is one of 14 Utah distilleries that has asked the Congress to help the industry which has been struggling amid the coronavirus.

Representatives from 14 Utah distilleries — facing financial hardships due to COVID-19 — have asked Congress to provide economic relief to their industry.

In a letter sent Tuesday to the state’s congressional delegation, the Utah distilleries urged Congress to enact measures that would offset the “sudden and steep declines in sales with the closure of distillery tasting rooms, restaurants and bars.”

Utah’s distilled spirits industry had been thriving prior to COVID-19, the letter states, supporting more than 3,000 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 letter was signed by the owners of 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.

Utah distillers are not alone in their struggles.

According to a national survey — conducted by the Distilled Spirits Council of the United States and the American Distilling Institute — two-thirds of the country’s distillery owners do not believe they will be able to sustain their businesses for more than six months.

The survey, which included feedback from 118 distilleries across 35 states and the District of Columbia, found that approximately 43% of distillery employees have been let go or furloughed since the start of the COVID-19.

The average distillery had almost 14 employees before the COVID-19 crisis, the survey showed, and has let go nearly six employees.

In their letter, the Utah spirit makers specifically urged Congress to support the recovery of their businesses as well as restaurants, bars and other on-premise establishments through the following actions:

Pass the Craft Beverage Modernization and Tax Reform Act • The bill 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.

Support the RESTAURANTS Act • This legislation would 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.

Suspend tariffs on distilled spirits • The European Union tariffs, which have been in place since June 2018, have had a devastating impact on American whiskey exports, including from Utah distillers, resulting in a 41 percent decline in sales from $757 million (July 2017 to June 2018) to $449 million (August 2019 to July 2020). The E.U. 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,” the letter states, “but they will continue to need the help and support of Congress for months to come.”