Ralph at Tuthilltown

Fred is absolutely right. I referred to cases in my previous, it was in error. I meant proof gallons. Now if we could just get the State of NY to adopt proof gallons as the measurement device. In NY the State requires reporting in "wine gallons" even for spirits. But to be clear, any limits we agree to should be "proof gallons". Thanks Fred.

It may also be a protein haze. Some of our customers prefer it. But clear is good. You can refer to winery manuals for a clarifying agent, or chill filter. Good luck.

The A-1 and DD licenses in New York both permit acquisition of a Wholesale Distribution license, permitting self-distribution. This is how we got started. It is a separate license application and requires additional bonds in place, but it is available. I'm sitting with Commissioners of the NYS Law Revision Commission shortly. We will be discussing revisions of NY State ABC law as it relates to Producers. All New York State distillers or applicants are invited to email me your talking points and I will bring them to the table. Please keep the comments and concerns brief and to the point. And lets stick for now to the things that are easily accomplished and reasonable. For instance, we have positive reaction from some quarters in Albany to the notion of a proposal to shift the licensing and regulation of Producers of alcoholic beverages in NY to the Department of Ag and Markets. Which of the arcane, ridiculous, costly, illogical, unenforcable, impractical, meaningless regulations would you like revised; but more importantly, HOW? We will be speakng with attorneys, not producers, not industry types. We must not limit our comments to whining and complaining, we must offer alternatives which accomplish the same overall need. You can email your comments AND possible solutions to me: ralph@tuthilltown.com

This is dicey territory. Who is "in" and who is "out"? Who "deserves" to be allowed into the ongoing discussions? Should they be excluded or merely ignored? Personally I am curious what others think and ask, even the novice or interested non distillers. But the point is well made. Those who are Members of ADI should perhaps have access to the more technical information and discussions than Joe the Would-Be Distiller, or the curmudgeon who simply tosses in his two cents without qualification. I agree there are many questions posed by amateurs or people who simply are not taking the initiative and actually doing some homework before posting the question. It's like the cell phone, if you don't want to be accessible turn the thing off. Same with the questions you don't like, don't respond; their presence on a forum is no burden to anyone, just ignore it. That said, perhaps the Forum should be in two sections, one for the general public and spirits geeks, and the other for Members Only. This is not without precedent, most Organization sites require membership and sign in for access to important information. The danger is the vetting process. An open site, without any restrictions will always draw the unqualified and the critical who offer only annoyance and no solutions or reasonable alternatives. I would not oppose a change to limited access, a "For Members Only" area of the site which would include contributing to the Forum. It is not unreasonable to have this sort of thing for the serious among us who have joined and continue to participate in a productive manner. If a non-pro decides to join and pay the fee they should be in. I don't agree that only Producers or those applying for permits or who have stills should be admitted. The only realistic qualification can be Membership in ADI. Perhaps there should be an additional Membership category for non-pros, with limited access attached. But it is worth further discussion.

In a week I will be meeting with the NYS Law Revision Commission to discuss the restructuring of New York Alcohol Beverage Control Law. The goal is a reasonable rewrite of the laws pertaining to Production. The SLA mission in NY is "regulation" there is no mention of "support" in the enabling legislation by which the SLA came into existance. This is a fallback position when the SLA is asked to provide some guidance and help to Producers. It is not in their nature to "help" the Production side of the beverage alcohol industry. I have proposed to the State of NY, and will discuss it at this meeting, the State separate Production from Enforcement and move the responsibility for licensing and regulating Producers of beverage alcohol products in NY to the Department of Ag and Markets where it belongs. The SLA is organized for and experienced with the regulation of Distribution, dealing mainly with on and off premises retail locations, distributors and importers. They have no experience or desire to shape the Production side. Wineries in New York are under the wing of the Department of Ag and Markets, recognized in law as "Farm" operations. The same is not true for the small brewer or distiller. We will attempt to cure this by putting all responsibility for Producers under Ag and Markets. Once the goods are bottled and leave the Producer's bonded premises (or are shifted to the retail side of a winery or farm distillery or brewery) the goods and their sale would fall under the watchful eyes of the SLA. That is the appropriate structure, allowing for the fact that Producers making use of New York agricultural raw materials, and especially when they are actually growing or contracting to grow the raw materials they use, are Farm operations. Wineries are already recognized thus. Keeping grain growers from this status and from the help and support of Ag and Markets is discrimation against grain growers in favor of fruit growers. Ag and Markets is better equipped to address waste, water and any other agronomic issues the small ag Producer deals with daily. For the above reason, it is now time in New York to define the "micro spirits producer", otherwise it can not be codified in NY law. I have proposed to the Commission and to Ag and Markets the definition which has evolved in this discussion. This is the exact reason why it is important to come to consensus about the definition. Not unlike the issues of carbon emissions (bear with me, this is not as big a stretch as it at first seems) if each individual state elects its definition on a catch as catch can basis, we will have no consistency across the country. We must try to agree on a definition we can submit on a State by State basis and to the Fed. And we must get to it soon.

Regarding the notion of reshaping the Micro tax proposal so that the reduced rate applies to "the first 60,000 cases", rather than applying the maximum number proposed (60,000 production limit) defeats the entire purpose of establishing a tax consideration for the small producers. The producers putting out 2million cases a year do not need our discounted rate, they're raking it in. I'm sorry to say this seems like the bigger producers attempting to cash in on the micro proliferation. It is not a solution, but instead is merely giving big alcohol producers a break for something they are not. I am opposed to the application of the discounted rate in the proposal to include major producers who PRODUCE more than 60,000 gallons a year. Our proposal is generated and intended to HELP the small producer grow and prosper. It is not simply a discount for everyone to glom onto.

Yes it's true, 2019 did get signed. Unfortunately the SLA did not know it when we submitted our application for the DD license. Our original application included a detailed proposal for "alternating use" of the distillery. That was when the law did not specifically state that a distillery could hold multiple licenses. The bill clarified and stipulates that holders of an A-1 license (among others) could also hold a DD or other distilling license. Thus the need to have an "alternating use" between two separate companies (yes, the SLA at first insisted we had to start and build an entirely new facility) was eliminated. We had to send the SLA the wording from the law before we could get them to agree that we are not starting a new distillery; we are an existing distillery applying for another license. We seem to have gotten past any misunderstandings and are finishing up the application process. The lesson: Read the Law, not summaries, not Cliff Notes, go to the source and read it till you understand it.

Brett the answer to this mystery is....."Yes". All of the above. Fact is that you have to get your Fed Basic Permit before anything else, and in order to do that you have to have a built, operable distillery ready to go. That means you have to order your stills about 4-6 months in advance of the time when you exect your facility to be ready for installation. Suggest you begin your permit process at the Fed and contact the still maker you are going to use and begin both processes at once. By the time your stills are ready you may be ready to submit your application with all the accompanying documentation.

Equipment is not the determining factor in "craft". It is the work, experience, knowledge and care the producer brings to bear on the creation of their final product. I think that the argument over what constitutes "craft" can go on forever. But it will always be a philosophical discussion. For the purposes of practical application, we should stick to defining "micro" and leave the other debate for after the meetings over whiskey, or absinthe, or gin.

Totally agree with the above comment. The best arguement is that this is NOT a reduction in existing revenue, but a means to encourage the development of an entirely new tax paying industry. We may be making the same basic product as Big Alcohol, but we are not in the same business. Our legislators need to be educated that this is not an "alcohol" issue. The impact of "micro distillery" industry development reaches far beyond simple alcohol sales. The effects are felt in the taxes paid by tourists (spending money at the distillery and in nearby rural areas), visitors' buying spirits (sale tax), rural development (most of the micros are in rural areas), agriculture (our raw materials, when possible grown locally), and employment (all levels and especially entry level jobs for local workers). All along the way the participants are paying additional taxes that would not have been paid without the existance of the micro distillery. R

Many of the points raised in your comment, above, are addressed in later comments in the discussion. I think we have gone past "equipment" as the determining factor. Whether or not it is a pot, has a column or whatever, it is not the hardware that makes it "craft". The term "craft is really not appropriate for a legal definition, but more in the way of a characteristic of the type of producer you are. We seem to have addressed the use of the word "craft", generally agreeing that the phrase "micro spirits producer" is more inclusive. The total volume suggested is a number that was chosen to be most inclusive while still keeping ourselves focused on the qualifier "micro". It is certain that using GNS, a producer can turn out 100,000 gal a year. But is that "micro"? States which define "micro" or which have small distillery license classes seem to top out at 65,000 a year and we are attempting to be inclusive and consider the existing limits developed by different states. In my humble opinion, a distiller who is packing (and selling, that's an important point to remember, you have to sell it all) 26,000 - 750ml bottle/cases a year (65,000 gallons or product) or roughly $12mil a year gross revenue, is already stretching the limits of "micro" (and enjoying equity value in the neighborhood of $100mil). For our operation (at current production level - 4,500 - 375ml bottle/cases a year) we would happily acquire the next license class and graduate out of the "micro" class if the gods of the marketplace blessed us with that kind of good fortune and consumer acceptance. We know, from our own experience, that kind of mass production requires heavy investment in machines and serious upgrade of staff, equipment, waste treatment and space; it is not what we here at Tuthilltown imagine as a "micro" or "craft" operation. But that's an opinion. The question about the phrase: "including but not limited to" was included to steer the understanding of what we use by way of example. It is arguable to say that "including but not limited to" is self-contradictory. In this case it is a way to clarify what materials are mainly used. The more salient question might be, is GNS an "agricultural raw material"? It is made from corn, but it is made in an industrial plant. If it comes as GNS, has it become an industrial raw material? The definition of "micro producer" is not expected to totally satisfy everyone. But we must make accommodation for the necessity to arrive at an accepted definition before the Fed or Big Alcohol do it for us. We will not all agree, but we must agree to disagree and move on. The definition proposed is on the table, unless anyone can find some substantial problem with it we should leave behind the discussions on the finer distinctions and get on with it. Melkon has made some tremendous progress in his starting efforts at lobbying our case for reduced tax rate. But before we can really settle out any issues, we have to come to some consensus. Time to shit or get off the pot. R

In New York State there is no "code" governing distilleries on a local basis, just the ABC law and the STATE LIQUOR AUTHORITY regulations and they only address local zoning on the minimum level by requiring applicants to notify their local municipality of their intent to apply for a license 30 days prior to submitting the application, and to submit a copy of the notice with the application. This enables local municipal types to comment or react. The more important point is that New York is a "right to farm" state. If your facility is on a farm, or in an agricultural district (check with your County Planning Department to see if you're in an Ag District) and otherwise qualifies as a "farm" the designation trumps many local zoning and much of the Uniform State Building Code. For instance, a Farm can erect accessory structures without going through the local Planning Board. Farms can spread effluent on their land at "agronomic levels" (check with Cornell Cooperative Extension about soil tests and agronomic levels); at those levels the farm is exempt from the requirement to file a land spreading notification or from requiring a permit to spread. Being on a farm, and holding a Farm Distillery license also allows the distiller to sell product direct to consumers at the distillery (the A-1 and other distillery licenses prohibit such sales). Your farm does not have to be large. The "farm operation" includes all lands leased by the farm for the propagation of crops, so you can have 7 acres and lease nearby farmland and grow corn or rye or such as those and use them to supplement your stock of grain. Same for fruit. If at all possible, locate your facility on a farm (minimum 7 acres) and grow SOMETHING that you can use in your process that results in generation of minimum $10,000 in revenue to the "farm". Being a farm affords enormous latitude to your operation and gives you the protection (such as it is) of the Ag and Markets Law. It also exempts the distillery from certain permit requirements. R

You two guys need to get a room......(kidding, kidding, of course). This is a lively discussion. And it is especially interesting when it rolls over into the kinds of things that GNS users are doing, like Melkon. I propose the word "infuser" would fit. Melkon is a great example, using his skills, intuition and the best materials to create new expressions in spirits. Why a person who is not actually distilling would want to claim the title is not beyond understanding, it has cache, it is not the kind of title the public understands fully. Hell, all of us who actually do this shit are having a pretty difficult time getting to a definition. But there is no shame in practicing a Craft that has GNS as its base material. The "Craft" is not in the materials, it's in how they are treated and the character of the starting material is changed under the careful manipulation of the Craftsman.

Thanks for that last from our cousins making beer. This is the kind of extended description we will need (to steal from the brewers) as we go forward and the national industry organization comes together. It is along the lines of a mission statement in that it has subjective descriptions of each type of producer. We may want to separate out the term "craft" and stick with a generic "micro" till the organization has established it's base and can address the more philosophical issues. In this discussion we have tried to focus on a broad stroke definition of what we all do, so that we have a technical starting point, a clear statement of the constituency the organization represents, which is not limited to distillers, but includes a wide variety of types, not unlike the sample above from the brewers. Thanks.

Please refer to the proposed definition of "micro distillery". It addresses the issue of rectification vs distillation in that is calls for a change in the character of the distilled material, not merely the watering down of gns and redistillation without any noticable or practical effect on the spirit. The terms "craft" and "master" are subjective. It is possible to monitor and "regulate" the use of the term "distiller", notwithstanding the small differences in who is actually "the distiller" in a small distillery, but it is not possible to regulate based on subjective terms. But the bottom line is who the hell cares? Unless those protesting are insecure about their own place or title they need to draw distinctions between the guy who turns on the still and the guy who manages the operation. This is a discussion for another string. For my part, all the debate on who is a "master distiller" or just a "still operator" is a waste of valuable time and effort. And by the way, "making it better" is not what "craft" is about, "better" being another totally subjective term that will vary from one person to another.

The EU governs in matters pertaining to the sale of "whiskey" and "whisky" in European Union member countries. Their rules for what can be called "whiskey" or "whisky" apply to both forms and also, you'll be interested to know, specifically include American Bourbon and American Rye in that definition, with the stipulation that to be sold in the EU as either "whisky" or "whiskey" (and including American spirits) the spirit must be aged in oak for minimum three (3) years. It is a redefinition of American Bourbon and Rye Whiskeys. The US recognizes both spellings as well. There is no legal requirement for either spelling that I'm aware.

I'm partial to the "grain to bottle" phrase as a general description of the character of an operation. I do not think getting any qualifers into the COLA process is the solution to the problem of qualifying someone as "traditional". There is a certain amount of self-policing needs be done by the industry. The scope of any term is very important. In a comment above, Denver suggested that 100% Agricultural raw materials means nothing but, to the exclusion of enzymes and any other additives of process. I think we have to be practical as well as true to form. The fact is that criteria can be carried to absurd proportions if one goes as far as to exclude added yeast for instance. Are natural flavorings derived by an infuser acceptable? Is Fermaid okay? How about buffers used to control pH? Let's stay practical as well as true to the basic form as possible under our limited circumstances. How many can afford a malting room and staff to cook the sprouted barley? Who wants to depend on naturally occuring airborne yeast? These are interesting and historic processes, but they are not practical or cost effective in the modern world. It could be said that GNS is from agricultural raw materials. So let's keep it real shall we? We must all educate our customers so they understand that a small producer is more like a stand alone specialty baker than a Wonder Bread plant. The vast majority of drinkers may never "get it". We are finding best results in educating the barmen and wait staffs of our restaurant customers. We invite them to the distillery and show them why our product is special. They not only become our very good customers, but they also become our best salesmen and introduce it enthusiastically to their customers. That said, it is not neccesarily true that the consumer should or can be brought around to small spirits en masse. As I said, some will never "get it". That's why our goods are special, rare and costly. They are appreciated by a smaller customer base. I guess the message is focus, focus on your product and your customer and don't be afraid to tell him/her WHY your spirits are unique.

We have decided that educating all the drinking public is out of the range of our pocketbook and perhaps a waste of time anyway, after all "least common denominator" is not the kind of market we want to attract. We set out to educate one customer and one bartender/retailer at a time. The "general public" is far to large a market for the micro-distiller anyway. But to Chuck's point, perhaps in the future we can sort out who does what with which spirit, but for the time being we must keep things simple and straightforward. Yes there are rectifiers out there bottling under names that are no more than that, a "brand", selling cheap. And until the term we all agree upon is accepted and we protect it, that practice will continue and no way to sort out the real distiller from the rectifier in the public's perception. Don's term "grain to bottle" is a clear statement of the type of producer he is. We are that type too. Perhaps this phrase "grain to bottle" is a good one to protect and use to describe the products of those who produce this way. I would include it on our labels, it says it all. And for another distiller to use the phrase, it would mean they are either going the true micro-DISTILLER route or they are lying, in which case they risk Fed reaction under truth in advertising. That said, the term "micro-distiller" as we are attempting to codify it, would preclude major distiller/rectifiers from bottling and being included in the community of micro-distiller (annual volume limit). That will not prevent them pirating the term for their own marketing purposes, unless it is a protected term (which ADI should adopt and protect). It would strengthen the term and its protection if the Fed and States would adopt the term as we are defining it, and add the term to the COLA vetting process, ensuring it is not included on a label if the distiller does not meet the criteria. That is, if we want the Fed regulating such things, not sure we do. Once we all agree to the extent we can, the next step would be to develop the different categories within the ADI membership: blender, rectifier, etc. But for the time being, we can not afford any level of schadenfreude. Let those who would "cheat" go ahead, feed them rope and eventually they will hang themselves (after all, what true Micro-Distiller can afford hundreds of thousands to promote a brand nationwide, no less actually keep up with demand). And in the end it's what's in the bottle and how the consumer receives it that will determine the success or failure of any new brand. Some cheaters will slip through, it is the nature things. But we can not determine our future based on what they will do or not do.

Around here, we do not refer to ourselves as "Master" anything. We're all Journeymen. Our distiller staff, if they manage the still or process mash or clean the tanks, are "Distillerymen". The whole discussion of who is a Master Distiller, or a Distillery Worker, or Chief Cook and Bottle Washer seems to me a bit premature for an industry which has no qualifying criteria for the term. I hold, the term "Master" anything is not one a person bestows upon themselves, it is recognition from the accepted industry body. Shit, anyone can go get themselves a Master Distiller tee shirt and wear it, doesn't mean they are one.

I think this is another discussion. Since the distillery is the entity which is licensed, a larger manufacturer making a private label brand under its existing license would not fall into this category if they are making over the 65k gallon top end. As for any misleading promotion, that's a problem for the Fed and the consumer to sort out. Let's just focus on this definition. Thanks for signing on.

I'm agreed with Chuck's revision of the structure of the definition, let's focus on the following text and start to build concensus here: Micro Spirit Producers may make no more than 65,000 proof gallons of product per year in a single licensed premises. Micro Spirit Producers use a variety of techniques which substantially change the character of the raw materials. Those techniques include but are not limited to: infusion, distillation, blending, and/or rectification. Micro Spirit Producers use agricultural raw materials including but not limited to grains and/or fruit. The reference to "agricultural raw materials" perhaps needs more discussion. To my way of thinking, the phrase refers to the base materials that form the basis for the alcohol production, not process additives. For instance, adding a buffer to reduce acidity, that buffer could be a mineral rather than from agricultural source. Or nutrients added to aid in the startup of fermentation which have an organic origin (that is to say, not necessarily certified as "organic" but rather produced from organic matter). These seem to me more in the way of "process". Perhaps there is a way to clarify that in the definition, but I'm thinking it's not necessary. Comments??

Thanks Chuck. Consumer expectations are indeed the bottom line for all us trying to make hay with our craftiness. But I do think that "traditional methods" and "experimentation" are not mutually exclusive. It is, after all, an American tradition to improvise and innovate, a tradition I'm sure was also applied to distilling spirits since the first still was erected in the US. And I also agree with your comment about the discussion on "craft". We should not get off point here. There seems to be no objection to the language or the scope of the proposed definition. Let's move forward. Who among the readers and industry types participating here agrees with the definition as it has evolved, to be inclusive of "Micro-Spirits Producer"? We need to come to decision on this so that it can be turned out to legislators and used in the reduced tax discussion with the Fed and various States.

I agree with Chuck on this. The Fed licenses single Premises as a distillery, each as a single licensed facility with specified components and infrastructure. And in principle I also agree with this> Read your piece today Chuck. I think the equipment people use does not distinguish them as craftsmen. If a distiller is using a column or a pot or a teakettle on the stove, none of that hardware speaks to the care and concept behind what he produces or the process he uses along the way. I'm thinking you agree; however I got the impression from the piece you feel that a real American whiskey maker has a particular form to follow to be considered such or an American craft distiller. I hope I'm wrong in this interpretation. The "traditions" I see are perhaps four or five generations old and the nearly total absence of the scale of the new American distiller has not existed for that time in the US. If we go back past Prohibition there are uncounted examples of "traditional" distilling that include makeshift, bootstrapped, scavanged, bought and moved, innovation in the creation of small distillery spirits. So the return of this kind of experimentation and innovation speaks to a return of real traditional whiskey making, I think, not a deviation from it.

James Wagner, ESQ, an attorney with alcohol experience in the DC area took a look at the proposed definition and comments: I believe that it is wise to err on the side of broadness in definition...to factor in changing goals and desires of producers. Much of the discussion shows a subtantial range of subjectivity on the "craft" or "artisan" nature of the production. I'm assuming that the prime goal of defining "Micro Spirit Producers" in the first place is to gain a statutory benefit, including tax treatment and reporting requirements. If that is the case, the focus should be on reaching consensus on the volume limitations. As far as proposed edits, I would suggest minor edits as follows: Micro Spirit Producers make alcoholic beverage spirits utilizing a variety of techniques and agricultural raw materials including but not limited to grains and/or fruit, which substantially change the character of the raw materials. The techniques used include, but are not limited to: infusion, distillation, blending, and/or rectification. A Micro Spirits Producer may make no more than 65,000 proof gallons of product per year in a single licensed premises. Let's please begin to get participants and distillers on board so we can begin to get this to Legislators as a concensus definition accepted by most of the legitimate small producers. R

And I thought our bourbon was young! Frankly I don't know why a producer would try to use "bourbon" to describe his "white dog", rye or wheat or whatever. That said, it is correct, the Fed regs have no minimum time in oak requirement except if you intend to call it "straight" whiskey. And far be it from us to criticize anyone at the edge of the definition (but still inside of it).