South Carolina distilleries seek pandemic relief

South Carolina distilleries seek pandemic relief
While businesses are still trying to figure out how to operate amid a global pandemic, small distilleries are a relatively new industry in America and are particularly susceptible to uncertainty. (Source: Live 5 News)

CHARLESTON, S.C. (WCSC) - They are not technically restaurants. They are not technically tourist destinations. They are not technically agriculture.

Yet, in carving out a niche in the marketplace, distilleries have become something of a blend of all three.

The distillery experience cannot be distilled down to just vodka, gin or whisky. Facility tours and tastings have become an integral part of the business model highlighting agritourism.

“What we have seen over and over in South Carolina is a lot of the local distilleries are buying 100 percent of their agriculture in this state. Those fruits and grains are going into our final product,” said distiller Scott Blackwell. “Last year 92 percent of our visitors to the tasting room were from out of town.”

While businesses are still trying to figure out how to operate amid a global pandemic, small distilleries are a relatively new industry in America and are particularly susceptible to uncertainty.

“Most people have not been to a distillery because eight years ago none of us existed. The laws have changed in the last few years so we can exist,” Blackwell said. “We only have around 30 distilleries in the whole state of South Carolina.”

Along with being the co-owner of High Wire Distilling Co. in Charleston, Scott Blackwell is also the president of South Carolina Craft Distillers Guild.

Together with the Distilled Spirits Council of the United State the two organizations sent a letter to the U.S. Congress asking for help.

  • Provide federal excise tax (FET) relief
  • Seek the suspension of tariffs on distilled spirits
  • Support the RESTAURANTS Act
  • Expand the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL)

While all four would be ideal, Blackwell said the biggest, and possibly least controversial, is the first one.

The groups want legislators to extend the Craft Beverage Modernization Act (CBMA), which is basically a big tax cut for small wineries, breweries and distilleries.

“It went from $13.86 per proof gallon for a distillery down to $2.40 a proof gallon. It’s like a 400 percent difference,” Blackwell said. “What we are facing at the end of this year is that tax is going to go back up to $13.86 a proof gallon which would be – especially in these times – would be horrible.”

A reduction in the excise tax was approved three years ago for a period of two years as part of the Tax Cuts and Jobs Act of 2017. It was extended for another year, and is now set to expire at the end of 2020. Blackwell says in that time distilleries in the state have grown by 1600 percent.

“We have on that bill over 76 senators and over 380 house members. It is one of the most popular bills on the Hill right now,” Blackwell said.

He said Sen. Lindsey Graham has signed on to the CBMA, but Sen. Tim Scott has not yet.

“We are working on Senator Scott. We hope he will get behind it,” Blackwell said.

Outside of the CBMA, the two groups would like to see the RESTAURANTS Act passed. The bill would free up billions of dollars to help restaurants which would in turn help distilleries.

“A big part of our business is restaurants and they have been deeply affected,” Blackwell said. “A lot of us are reliant on restaurants for our final product.”

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