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“We just want to be treated fairly:” MI craft distilling insiders on next steps following Whitmer veto of liquor law changes

Published: Jan. 8, 2021 at 10:41 PM EST
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LANSING, Mich. (WJRT) (1/8/2021)--We know craft beer has become a booming Michigan industry, but increasingly, craft distilleries make up a substantial piece of that revenue pie, with several slated to open across the Great Lakes Bay Region in the near future.

An effort to give the industry a leg up was turned aside this week by the governor despite broad support in Lansing.

ABC12 reached out to industry insiders for a look into why, what the bills would have done and what comes next.

“Distilleries in Michigan have been hit pretty hard.”

Jon O’Connor owns Grand-Rapids based Long Road Distillers. He also heads up the Michigan Craft Distillers Association and is a fierce advocate for his craft.

“When given a chance to succeed, Michigan producers can be among the best in the country,” he said.

Among other tweaks to the state’s liquor laws, Senate Bills 934, 1138, 1139 and 1140 would have enabled Michigan distilleries to self-distribute in a similar fashion to microbreweries. The bills would also have provided for alcohol shipped directly by retailers.

All four won broad bi-partisan support in Lansing and yet died on the governor’s desk, becoming what’s known as a pocket veto. The likely reason: the state’s balance books.

Another piece to this package: tax dollars. What the industry pays the state for every liter of alcohol that enters the marketplace. In the case of beer, that rate is $.20/liter. For craft distilleries, even if they can it, in which case, it’s a similar ABV, they pay $.48/liter.

The legislation would have reclassified liquor-based offerings and reduced their tax burden to a lower, flat rate.

“Everybody wants to be treated fairly that has a business,” Kevin Peil related. “They don’t want to see somebody doing close to the same thing as they are, but getting taxed at two to three times the rate.”

The founder of Tri-City Brewing Company wants to see a level playing field and thin out industry regulations to offset pandemic losses.

“What they need is the barriers lowered for them to be successful,” he argued. “This law would have helped them.”

“We never asked to be treated special, we just want to be treated fair,” O’Connor explained. “In order to see a Michigan industry created, we’re trying to create some parity in that marketplace.”

O’Connor said Friday he was still in talks with the governor’s office in addition to numerous allies in the state legislature. With some reworking, he told ABC12 he still envisions a path forward.

“We hope there’s some urgency in getting this back on her desk at some point in the near future,” he said.

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