IssuesStatewide NewsTexas Whiskey Distilleries Donated $6.1 Million of Hand Sanitizer But Face Crippling Regulatory Burdens

Distilleries discovered they could kill two birds with one stone — help their communities and restore some lost revenue — by producing hand sanitizer, but it hasn't been all smooth sailing.
April 24, 2020
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An old saying suggests that one should treat outside wounds with rubbing alcohol and inside wounds by drinking alcohol.

Texas distilleries have been hard at work combining the two. As supplies of hand sanitizer ran low in March with a coronavirus-caused demand spike, producers looked to other options to meet the needs of their communities and restore some of the lost revenue streams.

Fort Worth’s Acre Distilling was among the first to start.

But the ball did not stop rolling there.

According to the Texas Whiskey Association (TXWA), 44 different distilleries, 19 of which are affiliated with TXWA, across the state have begun making and donating hand sanitizer to “hospitals, law enforcement, EMS, nursing homes, blood banks, pathology laboratories, oncology centers, emergency rooms, and military posts.”

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TXWA says their producers receive 50 requests per day on average for the sanitizer.

It took a few weeks to both ensure their production capabilities and navigate the regulations of the production, but after that, it was full speed ahead for these distillers.

In all, the distillers have collectively donated about $6.1 million in sanitizer, costing them roughly $4.2 million in added expenses.

At least 120,000 to 150,000 gallons of hand sanitizer have been donated by the affiliated distilleries.

Spencer Whelan, executive director of the TXWA, told The Texan, “Our distillers have been able to supply such a large amount of hand sanitizer because they are distributed throughout the state, making it easier to get where it needs to be.”

This negates the need to climb the various logistical constraints that come with centralized distribution.

The distillers, Whelan added, are increasingly turning to sales over donation because they cannot sustain themselves by solely donating. “Several distilleries have donated tens of thousands of gallons, individually,” he continued.

Gulf Coast Distillers in Houston, for example, has discontinued its production of anything other than hand sanitizer.

But some regulations are threatening their ability to continue production. One such regulation stipulated by the FDA requires hand sanitizer to have a “bad taste,” Whelan added. The FDA has enforced this rule, and costs have increased which may prevent many of these distilleries from being able to produce it without going bust.

This enforcement came after distillers requested a waiver.

Going forward, Whelan said that many distilleries are taking these alternative operations day-by-day as it’s unknown when the market will open back up in full. Only a few of the large distillers, he added, can sustain themselves producing sanitizer. The rest are doing it as a community service and “there’s only so much more they can do” before it drags them under.

While the distilleries are “essential” businesses, they have operated on a pickup or drive-thru basis and have supplemented their income by selling merchandise. Their regular business, like for so many other businesses has seriously depreciated.

Since coronavirus spread, TXWA says its distilleries have lost between 60 and 80 percent of revenues due to the decreased consumer traffic.

Other aspects of the regulatory code are also threatening the distilleries’ ability to operate selling their normal product. The Texas Alcoholic Beverage Commission (TABC) has regulations on the books that make doing business difficult for these distilleries. These include a two 750 mL bottle per person per day limit, in-person pickup requirement, a prohibition on one person picking up product for another, and a ban on shipping.

The TABC website states, “The Texas Alcoholic Beverage Code was enacted to protect against involvement of the criminal element in alcoholic beverage trafficking.” And their mission is to “serve the people of Texas, and protect the public health and safety.”

Additionally, the to-go options Governor Abbott implemented by executive order for restaurants and other businesses do not apply to distilleries. Thus, the TXWA is asking lawmakers and enforcers to remove the direct-to-consumer restrictions from which other alcoholic product producers like breweries and wineries already benefit.

Governor Abbott has elected to temporarily rescind numerous regulations for a myriad of industries to better enable COVID-19 response. But Whelan is one of a growing number of Texans who questions whether some of those regulations should be codified in the first place.

“The COVID-19 crisis is exposing the fragility of a lot of laws, and these are examples of that,” Whelan emphasized.

Whelan said that in 36 hours, over 5,000 messages have been sent to legislators in Texas asking for this reprieve.

Regardless of a potentially burdensome regulatory climate, distillers are making the best of a bad situation and helping their communities despite any barriers they must hurdle.

Something, surely, which deserves to be saluted by raising a glass to freedom.

Editor’s Note: An earlier version of this article misstated the status of the FDA’s rule enforcement. 

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Brad Johnson

Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad watching and quoting Monty Python productions.