The debate over whether Alaska’s distilleries can serve cocktails continues.
The Alcohol Beverage Control Board reviewed at their meeting Monday new regulations which would ban mixed drinks — unless you mix them yourself.
Alaska’s 10 distilleries just got some bad news.
The Alcohol Control Board decided proceed with regulations that stop distilleries from selling cocktails.
For Haines’ Heather Shade, that was a blow.
“It’s almost like the regulatory process is just failing an entire industry,” Shade said.
Shade and her husband have been winning awards for craft spirits since opening the Port Chilkoot Distillery in 2013.
Their businesses plan included getting legislation passed to allow distillery tasting rooms, so people could sample their spirits on-site.
Port Chilkoot has served cocktails and samples year-round in Haines ever since – until August.
The state’s Alcohol and Marijuana Control Office issued an advisory notice that took Alaska’s spirit makers by surprise.
AMCO received a complaint that a distillery was serving cocktails, which was a violation of the law.
“That was astonishing. It’s not a public safety issue,” Shade said. “Tasting-rooms have been operating in this manner for years.”
The three-year-old law says distilleries “may sell not more than three ounces a day of the distillery’s product.” Mixers — from tonic, or juice to vermouth for a martini — didn’t count as the “distillery’s product.” The control office warned distillers to cease selling drinks with ingredients they didn’t produce.
Port Chilkoot changed their menu to comply with the new guidelines and keep serving cocktails.
“We had to adjust by producing all of our own mixers from scratch on site, so they would qualify as our distilleries product,” Shade said. “But now we’ve heard from the AMCO director that that’s not what she meant, and what they want is for us not to make cocktails at all, unfortunately.”
The Alcohol and Marijuana Control Office director sent a message in September to the Alcohol Control Board.
Alaska’s Department of Law had looked into it and their interpretation was that distilleries shouldn’t serve cocktails at all, period.
“This is essentially a manufacturing statute,” said Assistant Attorney General Harriet Milks. “It provides a license to produce distilled alcoholic products — gin, vodka, things like that. It does not permit, on its face, distilleries to serve cocktails.”
The Control Board agreed to get new regulations written to make that explicit. But with a tied vote, they also allowed distilleries to keep serving homemade cocktails until those regulations are finalized.
In the meantime, both regulators and distillers are frustrated.
Milks said cocktails haven’t come up as an issue before because regulators monitor over 2,500 alcohol, and now marijuana, licenses statewide. There are only 10 licensed distilleries, half of which have been operating less than four years.
“Did any of these distilleries come to the board and say hey, we’re selling cocktails, is that OK? No, they never did that,” Milks said. “Unless you communicate with the regulators. . . they don’t just have ESP!”
Shade feels regulators did know distilleries were serving cocktails – or should have.
Alaska distilleries advertise their cocktails in print, radio, social media, on their websites.
The director of the Alcohol Beverage Control Board owns Anchorage Distilling, which serves cocktails in its tasting room.
“Every form of common sense is saying this is a good thing and a legal thing and we just get these arbitrary rulings,” Shade said.
No matter who knew what when, now that the Department of Law has weighed in, Milks said , the board’s hands are tied by that interpretation of the statute.
Legislators are weighing in, too. Eight lawmakers sent a letter to the board, saying they intended for distilleries to serve cocktails when they passed the law.
But that ship has sailed.
“When we provide a legal interpretation of a statute, we do not have free range to read in every possibility that might exist under the sun just because that was not precluded,” Milks said. “If that’s what the intent was, legislator’s can go back and fix that easily clear all this up.”
But the legislature doesn’t reconvene until January.
During their November meeting, the Alcohol Control Board reviewed new draft regulations.
They ban distilleries from serving mixed drinks — or at least from having staff mix them.
Because they can’t regulate non-alcoholic beverages, they can’t ban serving ingredients separately. So, even though you couldn’t order a gin & tonic, you could order both gin — and tonic.
The board voted to move forward with the regulations, and opened them up for public comment.
Christy Tengs, who owns the Pioneer Bar in Haines, feels torn about the board’s decision. Her bar operates under a beverage dispensary license – which in Alaska can cost $250,000, Milks said.
Distilleries don’t have to buy those licenses, and their annual fees are less than half what bars pay.
“Beverage dispensary permits cost a lot of money, and they’re limited in a community,” Tengs said. “It has felt like unfair competition from my view.”
Tengs recently put her bar up for sale. Business is hard enough in Haines, she says, for everyone.
The Alcohol Control Board will review public comments on the draft regulations, before they take a final vote at their January 23 meeting.
You can send a message to the Board at AMCO.regs@alaska.gov.
