Proposed bill could grant California's small craft distilleries expanded direct-to-consumer shipping
The Central Coast is emerging as a destination for wine and craft beer, but small distilleries are also increasingly present in the local craft liquor scene. But distillers in Paso Robles and around the state say they’re limited by laws preventing them from shipping direct to consumers.
A new bill in the state legislature, SB620, could change that.
After the start of the COVID-19 pandemic in 2020, the state allowed distillers to ship their product directly to adult consumers in California.
“It kept a lot of the doors open, because I think without any income for 21 months, most of us probably would have had to close our doors," said Alex Villicana, the President of the California Artisanal Distillers Guild. He is also the owner of RE:FIND Distillery and Villicana Winery in Paso Robles.
Villicana said the emergency provision allowing direct-to-consumer shipping expired last March, meaning distilleries like his are now back to pre-pandemic rules — unable to ship directly and limited to selling 2.5 liters per day, per customer. His winery, however, operates under different rules.
“[Customers] could buy three bottles of bourbon, but if they wanted a pallet of wine, I could load it onto the back of their truck and send them home with it," Villicana said.
With this in mind, Senate Bill 620 was introduced in the state legislature last year by Senators Ben Allen and Bill Dodd. Central Coast Assemblyman Jordan Cunningham was a co-author. The bill as initially introduced would have let distilleries of all sizes ship directly to adult consumers in California, with certain limitations.
But the bill was amended in the Assembly last month to limit that privilege to smaller craft distilleries who produce less than 150,000 gallons per fiscal year.
"I think that's fair to say, that there shouldn't be a law that discriminates against a producer who has had some level of success and produces over that amount," said Adam Smith with the Distilled Spirits Council of the United States, or DISCUS. The group lobbies for distillers of all sizes, as well as provides economic analysis of the liquor industry for companies.
He said DISCUS initially supported the bill, but changed their stance after the amendment limited the privilege to a certain size of distilleries.
“We're just trying to educate Assemblymembers at this point on what a good bill would look like, as opposed to something that was kind of forced on the distillers in the state last minute," he said.
Senator Ben Allen represents the 26th State Senate District within Los Angeles County. He said the bill has gone through several iterations and changed significantly, so he understands larger distillers’ concerns.
"I totally respect the position of DISCUS, and they know that we were with them from the very beginning. But this is where the bill got to," he said.
Allen said he had hoped for a compromise between the various interests representing smaller and larger distillers, but the bill in its current state is still a step in the right direction.
"Ultimately that didn't fly, and so we're at a place now where we're only focused on the on the small guys, on the craft folks. And at the end of the day, that's really always been more my focus," Allen said.
Even though SB620 is now focused on the craft distilleries like those in Paso Robles, the senator said there could be expanded direct-to-consumer privileges in the future.
"The question, of course is does it go far enough? And you know, that's a battle that's gonna have to be found in the future."
Alex Villicana with RE:FIND in Paso Robles said the bill in its current form isn’t perfect, and could even limit his own distillery business someday.
"You know, if I grow big enough, if I got up to that 150,000 gallon level and I was still growing and and I wanted to ship, I would love that cap to be higher," he said.
But Villicana also said expanding direct-to-consumer shipping would help keep craft distillers around the state afloat, now that the emergency provision allowing that is over.
"Sometimes change happens incrementally, and unfortunately if this bill gets killed and we have to start from scratch next year, a lot of the California distillers and even distillers across the U.S., we'll have lost nine months this year, and then probably another 12 months next year if we're lucky enough to get a bill through next year. So that's a lot of time."