Distilleries advised to cease serving cocktails with off-site ingredients

By DAN FOX
EDITOR

In August, the nine spirit distilleries in Alaska received an advisory from the Alcohol & Marijuana Control Office (AMCO), which called for them to cease serving cocktails made with off-site ingredients. The Alaska Alcohol Beverage Control Board recently met over the issue, and voted to support and uphold that advisory as written.

Erika McConnell, director for AMCO, said the advisory directs licensed distilleries to cease selling – or giving out samples – of drinks that are made by mixing their distilled products with other ingredients that are not produced on the licensed premises, effectively calling for an end to serving cocktails at spirit distilleries.

The fallout of the board’s decision has left some distillery owners expressing confusion about how to proceed, and concern about the future of their businesses.

Heather Shade, co-owner of the Port Chilkoot Distillery in Haines, said she thinks the advisory is unclear, and is causing her business some confusion. Shade said that nowhere in the state statutes does it say distilleries are prohibited from mixing their distilled products with flavoring ingredients. The ABC board mandate is to regulate alcoholic beverages, Shade said, and she doesn’t “see any reason why they would regulate adding something that they don’t have jurisdiction over in with our product.”

“[It’s a] pretty common trade practice, and a pretty common way to serve spirits,” Shade said.

Skagway Spirits Distillery co-owner Janilyn Heger, along with her husband Gary Heger and son Lucas Heger, worked for almost three years to get Skagway Spirits licensed and up and running. Its doors first opened in summer 2017. The ruling won’t be the end of Skagway Spirits, but it will have an impact, Heger said.

“I’m not going to say it’s not going to hurt, [but] it’s not going to be our demise,” Heger said.
Mixed drinks are “vital” to the business model, Shade said. She added that she thinks it is safer to consume a distillery’s product in a cocktail, rather than straight from the bottle.

“It [the ABC board’s ruling] would not allow us to market our product to the consumer in a way that helps them understand it,” Shade said. “It also, I think, puts us at more of a safety risk. When you mix spirits with another ingredient, it reduces the alcohol content, it makes people consume them slower, enter the blood stream slower.”

The situation spawned from a complaint to AMCO that a distillery was serving mixed drinks and providing entertainment. After reviewing the relevant statute – which was put in place by House Bill 309 in 2014 – AMCO released its advisory.

The section of HB 309 in question states a licensed distillery may sell “not more than three ounces a day of the distillery’s product to a person for consumption on the premises.”

McConnell wrote in a Sept. 13 letter to the ABC board there is nothing in the HB 309 language that would suggest a Bloody Mary, martini or margarita qualifies as a distillery’s product.

“I think that saying if we can’t use anybody else’s alcohol, vermouth or anything, fine,” Heger said. “But to not be able to mix a cocktail at all? I think they’re overreaching. When the alcohol board gets into non-alcoholic beverages, it’s an overreach.”

McConnell said the advisory was well within AMCO and the ABC board’s jurisdiction.

“An alcoholic beverage is a beverage that has alcohol in it,” McConnell said. “And so, even if it has other things in it, it’s still an alcoholic beverage, and thus the board has authority over it.”

The ABC board has opened a “regulations project” to discuss what, if anything, can be mixed with a distillery’s product.

The regulations process is not a fast one – McConnell said often takes take anywhere from 4-6 months.

In the meantime, McConnell said distilleries should be complying with the direction of the ABC board.