Illinois: Suburban lawmaker, distillery push law to bypass liquor distributors

Monday, April 10, 2017 10:50:00 AM

Source: Daily Herald

March 25, 2017


On a busy night, a bar across the street from Fred Robinson's small suburban distillery might call asking for a quick delivery of a few extra bottles of whiskey, rum or gin.


State law, however, prohibits Robinson from filling that order.


Instead, Robinson, co-owner of Copper Fiddle Distillery in Lake Zurich, and all other hard liquor manufacturers must go through a distributor to get their products into Illinois bars, restaurants and retailers.


"It could be a week or two before they get restocked over there," Robinson said.


That doesn't make sense to Robinson, and now a suburban state lawmaker is taking his case to Springfield.


Under a bill introduced by Republican state Sen. Dan McConchie of Hawthorn Woods, Robinson and others in the fast-growing craft distillery industry could deliver a limited amount of their own products rather than work through distributors.


McConchie, whose district includes Copper Fiddle, said he wants to make it easier for the small distilleries to grow. His bill, he said, has gained bipartisan support in the Capitol.


The measure would allow distilleries that produce a maximum 100,000 gallons a year to deliver up to 25,000 gallons annually to bars, restaurants and stores.


McConchie expects self-distribution to create additional sales and increased production by the craft distilleries, leading to more state and local tax revenue. Liquor distributors would benefit in the long run if small distilleries across the state grow, he said.


"Once they're big enough and they're shipping lots of product," McConchie said of the craft distilleries, "it makes total sense for (distributors) to step in and be able to do what they do best."


The bill would provide similar self-distribution opportunities for distilleries that craft breweries received in 2011. State law allows small breweries to distribute a maximum of 232,500 gallons on their own if their production doesn't exceed 930,000 gallons.


Illinois' growing craft distillery industry is helping drive the distribution issue, McConchie said.


The state now has 31 craft distilleries, with 20 in Chicago and the suburbs, according to the state liquor control commission. There were 19 small distilleries in early 2014.


While distributors typically deliver national alcohol brands to retailers by the case, Copper Fiddle co-owner Jose Hernandez said sometimes he just wants to get a few bottles on a shelf. The business still would use a liquor distributor in most instances, but having the self-delivery option would allow him to get products out faster locally, he said.


Not all small distilleries are on board with McConchie's proposal to amend the state's 83-year-old liquor control act.


Paul Hletko, founder of Few Spirits in Evanston, said craft distillers could wind up working against each other. Illinois' longtime three-tiered system of producers, liquor distributors and retail establishments works well, he said.


"I can't overemphasize the value of the distributor," Hletko added. "Because distributors exist, it allows distillers to focus their efforts on distilling and growing and building the brand, rather than trying to make deliveries."


Karin Lijana Matura, executive director of the Wine and Spirits Distributors of Illinois, said officials from the nonprofit trade association plan to meet with Copper Fiddle's owners "to try and determine what their additional needs are."


"Until we have a better understanding, we will reserve comment on our position on (the proposal)," she said.


Jeff Walsh, founder of Oppidan Spirits in Wheeling, said he does not envision self-delivering his business' offerings, such as American botanical gin and malted rye whiskey. However, he said, it would be good to have the option if a distributor suddenly stopped carrying his products.


"It would be nice, at least in the short term, to be able to service your accounts," Walsh said.


Numerous suburbs already are supporting McConchie's proposal through the Lake County Municipal League and Northwest Municipal Conference. Lake Zurich village board members also went on record in support by passing a resolution March 20.


"The village seeks to support small business owners as a crucial component of fostering a vibrant local economy," Lake Zurich Mayor Thomas Poynton said, "and creating sustainable, destination-type establishments for the community to enjoy."

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