Cider News: September 2013

September 27, 2013

If you remember at all, last year the East Coast had a horrible apple crop while Washington State had a larger than normal crop. Well, apple trees tend to be a little bi-annual, so last year’s crop failure has lead to this year’s bumper. I’m predicting next year to be a hard year again as a result.

Meanwhile, there is legislation here in the US to lower taxes on craft cider, and I’ve thrown in some other stories from around the world as cautionary tales.

March Update on I-1183

March 21, 2012

As you recall, last November, Washington voters approved I-1183, which basically allows private sales of liquor instead of state sales. Even though the law does not go into effect until June 1, my local Fred Meyers has actually already done a lot of shifting of products in order to get shelf space for the liquor, shelf space that will remain empty for another three months.

I said last fall that I was focused on the distribution aspect of I-1183. A few weeks ago, The Olympian wrote an article about how, starting on March 1, Washington bars and restaurants could buy liquor direct from the distilleries. I think this is a good thing. I had argued that a distributors are still needed for a business in the alcohol industry, but sometimes, you need the ability to bypass them for the local economy. This article still confirms this is happening, as Dry Fly Distilling out of Spokane is in the process of getting a distributor. What I am hoping is that local restaurants will start carrying locally made alcohol and promote it more because the shorter distance makes it easier to bypass a distributor. I see distributors as being a good thing for a larger scale, bigger distance market.

There is some speculation that liquor prices will be going up, according to the Seattle Times. I-1183 had some increased fees to cover the cost of enforcement and education, fees that make distributed liquor 10% higher than state sold liquor. It will be interesting to see if this actually pans out.

Last of all, just this week the Cowlitz County superior court ruled that I-1183 does not violate the state’s constitution. In this case, Judge Stephen Warning actually overturned his previous ruling on the matter. The suit argued that I-1183 violated “state rules requiring initiatives to address only one subject because it included a provision to set aside $10 million for public safety.” Warning’s ruling on March 2 stated that the measure did address two subjects, but he overturned his own decision on March 19, stating that “there is a well-established – albeit negative – relationship between public safety and liquor,” so I-1183 is seen as dealing with all issues of liquor and not a separate issue. There are other challenges to I-1183 still happening.

Meanwhile, my Fred Meyer’s store will have rows sitting empty for the next three months, waiting for June 1 when they can sell liquor.

PBS’s Prohibition

January 13, 2012

Next week, on January 16, 2012 mark the 92 years since the Volstead Act was ratified and became the 18th Amendment to the US Constitution, being about the beginning of a 14 year era known as Prohibition.

Last October, PBS aired Prohibition by Ken Burns and Lynn Novick. It took me a little bit to get around to watching the 5 ½ hour show, which was available at my library. It kind of covers the era from about 1840s through the 1930s from all angles.

Interestingly, in the 1800s, there were saloons, where only men went to drink. As a result, women were very instrumental in having Prohibition come about, partly as a safety measure for their security, safety, and the wellbeing of the family. Men would take their wages and spend it all down at the saloon, and perhaps come home drunk and beat on everyone. The battered family would starve because he spent his paycheck in an age where women did not work outside the home. There were other sides to the debate, such as Anglo-Protestant Americans being against alcohol, trying to save the drinking immigrants, but the idea of a space where only men went and how women protested is interesting to me. In addition, when Prohibition was in place, women actually began to go places to drink. It created a shift creating more gender equality, while creating a shift in space by closing saloons and opening female friendly speakeasies.

Prohibition was actually an amendment to the Constitution, as people at the time believed that this was the only way, since no other amendment had ever been overturned. Historians, however, talk about how it is ironic it is that the Constitution is about limiting government for the sake of personal freedoms, and Prohibition limits personal freedoms. One historian commented something to the extent that, “If you wanted people to brush their teeth, outlaw toothpaste. People will then start secretly brushing their teeth.”

Ultimately, Prohibition failed because people who supported it thought people would obey just to obey. Very little money was actually set aside for the enforcement of the law. People still wanted their alcohol, which created an illegal black market. This black market paid off a lot of officials, which really created an age of uncertainty and corruption.  Police would turn a blind eye to the distilling distribution wars that were happening, powerless to stop them. Also, once you have people breaking one law, it makes them less likely to follow others. And if you cops are corrupt and not enforcing one law, they may not enforce others.

I am obviously simplifying this era too much, but the show Prohibition walks you through all this and more, talking about the times, specific people and events, terms, culture, politics, and much more. For instance, Prohibition actually brought about today’s modern system of lobbying. Most of it is historians talking with black and white photos being shown and ragtime music in the background. I also like it how a few people are interviewed who lived in the times, or whose parents were somehow involved in either side of the battle. Prohibition is a well done, informative show about America’s history with alcohol during the 1840-1930s.

Hobbyist Moonshinin’

January 9, 2012

Max Watman, in closing of Chasing the White Dog, basically swears off being a distiller/moonshiner, even if he was only doing a pint at a time. He struggles with the “moral ambiguity” of being a hobbyist distiller, equating to something like a person who grows marijuana for himself and friends, which is different than someone who sets up a marijuana farm business. He did acquire some moonshine, the stuff made for pure profit, and said it was awful and needed to be regulated for health and safety. The stuff a hobbyist would make isn’t for profit, and he argues that it should be legalized. He says that with the way current laws are written, where one household can make not sellable 300 gallons of beer or wine a year (I was lead to believe it was 200 gallons, but maybe the laws changed), if you took all 300 of those gallons and distilled them at 10% conversion rate, you would have 30 gallons of spirit. He then alludes to the suggested idea that spirit sales would not decrease because people would want to test it out against store bought stuff (I have heard this to be a myth in New Zealand, where home distilling is legal, and supposedly spirit sales did not decrease). Watman thinks that if the government is really that scared about losing its tax money, hobbyists should have the option of paying $150 licensing fee a year without the ability to sell their spirits.

I have to say, I like this thinking. I recently poured five gallons of cider down the drain because it had a yeast film infection I couldn’t seem to get rid of. If I had bottled it, the infection would have come back. I could have pasteurized it, but I’m not set up to do that many bottles. Not that I’m set up to do distilling, either, but it would have been something new. And five gallons would have ended up as half a gallon of apple brandy, if that. Not only that, but in 2010, I made about 50 gallons of cider and wine, and I only did 40 gallons in 2011. I think, maybe if I could distill, I would ramp up production to make maybe a gallon of spirits (10 gallons more of cider?) a year, because I honestly don’t drink spirits that much. I sip cider and wine, but I down a cocktail. So the way I drink is faster, and my body just can’t handle the higher alcohol. However, I would be making pommeau.

Thing is, I’ve seen stove top stills in stores, and it wouldn’t be that hard with the internet to either buy one online or find plans to build one, which is what Watman did. I also do not think I would be caught by any authority. I know that sounds cocky, which is exactly why I can’t just be a moonshiner. There is a chance that I would be caught, and then I could never open my cider house, and who knows what other issues that would create with my career, and even that of my husband’s.

Oh, but I wish I could!

How I will Vote on I-1183

November 4, 2011

Initially, I was for I-1183. Why? Because I was for last year’s failed attempt at I-1100. However, recently, I’ve become more of a fence sitter on how I will vote next Tuesday.

Some say it will allow gas stations to sell hard liquor. Not true per 2g, as a store has to have 10,000 sq ft of enclosed retail space. This pretty much limits the sales to grocery stores. A down side of that is that you wouldn’t see specialty alcohol stores like wine shops or beer bottle shops open up. The only way around that is via Section 103-3-c, which states that a current state liquor store bought at auction may be allowed to continue to operate as a liquor store. According to Jordan Schrader of The Olympianthere is some wiggle room for undefined rural areas go get around the 10,000 sq ft requirement, but I am unsure where that is at in the proposed initiative.

There have been arguments about how this will increase sales to minors, partly because of the scare tactics regarding the before mentioned (impossible) sales at minute marts. The thing is, 2L of the law states that “the standard fines and license suspension penalties for selling liquor to minors twice as strong as the existing fines and penalties…” So really, a business has way more to lose if they sell to underage drinkers, so it is actually in their best efforts not to. However, Schrader does say that statistically, the state run stores are effective at turning away 94.3% of underage drinkers, while private companies have a success rate of only 80.5%, but that includes bars that already sell hard liquor and mini marts that won’t sell it. Though, honestly, a lot of Washington’s underage drinking occurs because somebody of legal age bought the liquor and gave it to somebody underage, and no amount of enforcement is really going to stop that from happening.

Last year,  I looked up various statistics regarding state run systems vs private systems, and the results of switching from one to the other.

Thing is, Costco has pumped $22.5 million dollars into support for this bill. People cry foul over that, but the biggest criers are actually the out of state distributors lobbying in Washington DC, who have raised $11.7 million dollars, reports The Olympian on Oct 22, 2011. My husband said, “Either way, a corporation has bought your vote.”

I think what really has me on the fence, though, is this letter to the Seattle Times written by an Oregon Distiller.  Mind you, last year, another Oregon Distiller wrote in favor of I-1100. Granted, the second distiller has been around for over 20 years and has built up a decent size business, so maybe he isn’t at the same level as the distiller for Dundee.

My husband and I have been debating over how to vote. What I am really focused on is distribution. I don’t like that if I am licensed to make cider that I have to find a distributor in order to have a little shop in my neighborhood sell my cider. I think it is difficult to support a local wine maker, brewer, or even distiller with the distribution laws the way they are. I don’t know how many times I have walked into a restaurant or country store selling wine, and not a single one is from that area, and that is frustrating. But would I-1183 fix that? Melisa Allison wrote in The Seattle Times on October 8, 2011:

I-1183 would let retailers negotiate for volume and other discounts on wine and liquor, and let them store it in their warehouses.

Small wine distributors worry they would not survive in a system that lets retailers play hardball on pricing. They also think they would be pushed off grocery shelves to make room for liquor and wine from big, discount-oriented wineries and large-scale distributors.

“A lot of small wine distributors will go out of business if 1183 passes,” said one Washington wine-distributor executive who asked not to be named.

It is a good article, and even talks about how Costco still uses a distributor in California where they don’t have to use one by law. Don’t get me wrong – I believe distributors are good and necessary in a free market, but sometimes you need the ability to bypass one because they don’t always serve the markets you need them to serve. But would I-1183 be good for me when I’m licensed? I honestly don’t know. And admittedly, refusing to publish your name makes you seem sketchy, like you are lying.

My husband had a few reservations of other types, but he announced to me last night that he thought he was going to vote yes. Part of the thing that seemed to push him over was that he knew both sides were lying, but he felt the no side lied more. He reads more newspapers online than I do, so he is constantly looking for the fact checker articles.

So it sounds like this household will be voting yes on I-1183.

What is Washington I-1183?

October 28, 2011

This election is sort of deja vu for Washington voters, as we will be voting on Initiative 1183, which does away with Washington run liquor stores and allows private businesses to sell hard alcohol. Last year, we voted on I-1100, which sort of did the same thing, but it failed.  The result was the I-1100 writer/sponsor Costco believed that if they fixed some issues with I-1100 and tried again, it would pass. So, I-1183 was born.

Trying to read the 60 page legal text is a bit difficult, but most everything is in the first section. This is how I broke it down:

Section 101

  1. The people of Washington find the state government’s monopoly on liquor distribution outdated, inefficient, and costly. Therefore, they want to privatize and modernize wholesale distribution and retail sales.
  2. This initiative will:
    1. Privatize distribution and retail sales of liquor to reduce government costs and provide increased funding for state and local government services while still regulating
    2. Get the government out of the commercial business of liquor, freeing up the government’s energies to enforcement of laws and public safety regarding liquor
    3. Have the state auction off its existing distribution, facilities, and equipment
    4. Allow private distributors to get a license if they meet requirements set by the State
    5. Private distributors most pay 10% of their gross spirits revenues to the state for the first two years and 5% of their gross spirits revenues to the state after
    6. Allow a limited number of retail stores to sell liquor if they meet requirements
    7. Regulate that a store must have 10,000 sq ft of enclosed retail space in order to get a license
    8. Require a store to demonstrate it can prevent sales of alcohol to minors before obtaining a license.
    9. Ensure local communities have input before a liquor license is issued
    10. Require private licensed retailers to pay 17% of their gross spirits revenues to the state
    11. Maintain the current distribution of the liquor revenues to the local governments and dedicate a portion of new revenues to increase funding for local public safety.
    12. Have standard fines and license suspensions for selling liquor to minors twice as strong as existing fines.
    13. Requires training of employees selling spirits more stringent
    14. Allow wine distributors and wineries to give volumn discounts at wholesale prices to retail stores and restaurants
    15. Allow retailers and restaurants to distribute wine to their own stores from a central warehouse

The next two sections of the law are kind of boring. Section 102 change 66.24 RCW by stating that licensed distributors may begin selling spirits on March 1, 2012, and licensed retailers may begin selling spirits on June 1, 2012. They must have filed for their license 60 days before those dates, and be approved for licensing before those dates in order to participate. The rest of the section is about how long the state may stay in operation and how the state must transition to a private liquor distribution/sales system. Section 103 adds to 66.24 RCW, speficing things like packaging, sale and resale, keeping stock, reporting, and more. An interesting part is 103-3:

  1.  Except as otherwise provided in subsection (3) , retail licenses can only be granted to areas at least 10,000 sq ft in fully enclosed retail spaces in a single structure.
  2. Licenses and renewals are still subject to RCW 66.24.010, but grocery stores licensed to sell beer and wine are “now licensed” under RCW 66.24.010(9)(1) if they want to sell spirits.
  3.  If a current state run liquor store is sold at auction per Section 102, that store may not be denied a spirits retail license.

At this point, I’m to page 8 of the document. It talks about paying for licenses, cost of a license, penalties, and compliance training. I kept reading to page 14, but it is really just wording of licenses, types, regulations, enforcement, etc. I honestly believe that Section 101 was the heart of this initiative, and pretty much anything you want to know can be found there. Admittedly, there is some stuff I missed, but you can catch that in my recommended further reading.

Further reading: “What to consider in deciding on I-1183. Liquor vote: Both sides stretch the truth in ads,” by Jordan Schrader, The Olympian, October 26, 2011. This is a good fact checker story breaking down the campaign ads.

I kind of feel like in order to do a good book review on 21 Questions About Opening a Winery in the United States, written in 2010 by Anda Lincoln and Brad Lincoln, it really needs to be reviewed twice. Once now, before I have an operating winery, and once after I have a winery up and running to see how accurate it is. Admittedly, that could be awhile…

The first page is actually a disclaimer. The first sentence says it all, “ The information about laws contained in this Publication is for informational purposes only, and does not (nor is intended to) constitute legal advice or counsel.” It then goes on to state, “THE CREATORS DO NOT ASSUME ANY responsibility OR LIABILITY FOR ERRORS, OMISSIONS, OR DIFFERING INTERPRETATIONS OF THE INFORMATION CONTAINED IN THIS PUBLICATION.”

Thing is, Anda and Brad were a CPA and an attorney, but I’m unsure if they worked in the wine or beer industry. They quit their jobs and decided to open a brewery, and I think this book is a result of them trying to navigate the United States Alcohol and Tobacco Tax and Trade Bureau (TTB) regulations to get their license.

Admittedly, I’ve been putting off trying to read said TTB regulations, so this is a short little double spaced 120 page book. I think it works well as cliff notes of sorts, though it is incomplete. I now know some of the federal regulations, such as I need a site and equipment before I apply for my wine making license, and it could take 90 days to process if I submitted all the right paperwork. It also talks about all the different times one has to refile, such as even moving equipment around on the premises. It is not exclusive to grape wine, and even talks about cider and mead. It is also well documented, indicating forms and what regulations to read to gain further information at the federal level. It is a quick read, and I think it will help me to understand actual regulations.

The downside to this book is that it is $30 for the electronic version, and $40 for the printed version, which does come with a limited time access to the electronic files, so save it if you go for it! I mentioned before that it is 120 pages double spaced, and they like to have a lot of white space with premature page breaks. I think this book could have easily fit into 60 pages, but I’m guessing publishers don’t like printing something that small.

So, it is a good cliff notes for trying to run the federal guantlet to become a winery, but is $30-40 worth it to you when the TTB regulations are available for free?

Further Reading: