New Fees Slam Distilleries Who Stepped Up During Pandemic

UPDATE:

The HHS Office of Public Relations has issued a statement that the FDA acted without authority in releasing the fee schedule!

Due to all the outreach and coverage the fee schedule got, the HHS reviewed the order and deemed that the fees were unfairly targeting those who had helped throughout the pandemic, and that the FDA assessed the fee without approval and without the department’s consent. This means distilleries should not be charged for producing sanitizer during a national shortage and global pandemic.

Original story below:

2020 sent the majority of the world into a tailspin. Doors were shut, jobs were lost, and businesses that had operated for decades dematerialized in a matter of months. However, some people stepped up from the proverbial ashes from the tides of march and tried to make a difference in their respective communities.

Many distillers, both small and large alike, turned some of their whiskey production capacity towards something a fearful community was facing a critical shortage of, hand sanitizer.

Many of these companies donated hundreds of bottles, and in some cases hundreds of… well… cases, to local firefighters, law enforcement, non-profit shelters, and other limited-funding organizations who weren’t well equipped to handle contact with those in need safely. Additionally, the vast majority of them were offering their sanitization products at a break-even price considering the approvals, manpower, loss of revenue, donations, and supplies it took.

Now, to rub salt in the wound left by this year, the FDA has come in and slammed these distilleries with a bill of just over $14,000, which could equal out months of profit for some of the younger distilleries. Now, these distilleries are being left to scratch their head at how stepping up to help their community could have sent them tumbling down an incredibly expensive rabbit hole. To make matters even more confusing, special allowances were put into place by local and state governments specifically so that these companies could produce sanitizer and help alleviate the dramatic shortages we faced earlier this year.

How did this happen?

The FDA passed a new set of regulations this last Tuesday, and in this new set of regulations is a shiny new set of fees for what they’re now calling “monograph drug facilities,” which is a new term for anyone producing anything on their new list of over-the-counter drugs.

Unfortunately, they have, in their infinite wisdom, determined that hand sanitizer is a qualifying drug, and that if it was produced for 2020, you retroactively owe the fee and are required to register under their new designation to remain federally complaint.

It is a swift and crushing blow to distilleries still in recovery mode from the hardships of this year, and a slap in the face by the same organization that reached out to them for production help earlier this year. On top of the fee, many of these smaller distilleries are now facing a long uphill legal battle to try and overturn these fees or get an exemption without any clarity as to whether that is even possible.

This comes after a new series of lockdowns and shelter-in-place orders dampened alcohol production and sales during one of the most profitable times of year, the winter holiday.

What can we do?

We can click here and let the FDA know that this is crippling to the entire whiskey community, and that they are unfairly targeting the very people they pleaded for help during national shortages during a global pandemic. This may be the only way to help our friends and save some of our favorite craft producers after they helped us.

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