A bill allowing Alaska distilleries to once again serve cocktails and mixed drinks in tasting rooms received public testimony Saturday, with a 7-1 ratio of testifiers asking legislators to allow the drinks to flow.
The legislation, House Bill 269, would settle an ongoing dispute between bars, distilleries and the Alcohol Beverage Control Board — which regulates alcohol licensing in the state — over whether Alaska’s nine distilleries should be able to sell mixed drinks in their tasting rooms.
The House Community and Regional Affairs Committee heard public testimony on the issue Saturday morning at the Capitol, with 24 people testifying. Twenty-one were in favor of the bill, many of them distillery owners or employees.
Amalga Distillery co-owner Brandon Howard, who’s been operating his distillery on Franklin Street for seven months, called the current regulations petty. They require his business to jump through purposeless regulatory hoops, he said, to allow customers to taste their product the way it’s normally consumed.
Distilleries can still sell mixers and alcohol separately, but customers must prepare the drinks themselves. Distillery employees cannot prepare them.
“There’s a contrivance and pettiness in the service, a bit of an awkwardness. If I give you an ounce and a half of gin and a mixer, you can tilt that gin into the glass, but if I tilt that gin into the glass for you, I am breaking the law,” Howard said.
Distilleries have been able to serve mixed drinks for about three years. That rule was in January by a 3-1 ABC Board vote.
Bar owners are happy with the change. They say a distillery’s ability to sell mixed drinks unfairly cuts into their business, giving distilleries power to act as bars without purchasing expensive bar licenses, which in Juneau run about $250,000.
But distillery owners say there are already plenty of stringent regulations — an 8 p.m. closing time and a 3 oz. limit on samples — which differentiate bars from distilleries and keep them from competing.
Legislation creating tasting rooms passed in 2014 was intended in part to help Alaska’s distilleries to attract interest from the tourism industry. Forbidding the sale of mixed drinks, Howard added, defeats that purpose.
Though Amalga now sells more of its gin wholesale than via its tasting room, other distilleries depend more on individual sales from tasting rooms. Some reported that they might be forced to operate seasonally or close altogether if not allowed to sell mixed drinks.
Rob Borland, owner of Alaska’s smallest distillery, Ursa Major Distillery, outside Fairbanks, said the bulk of business comes right out of his tasting room.
“Our products are mostly designed to be used in a cocktail,” he said. “Having a tasting room has allowed us to keep our doors open and kind of flourish, for the most part.”
Most who showed up at the Capitol or testified via phone had a financial interest in HB 269. One person without a financial stake in the bill, Kim Metcalfe, testified against the bill, while 11 people without a financial interest testified for the bill.
Owners and representatives from six of Alaska’s nine licensed distilleries weighed in, while two members of the Cabaret, Hotel, Restaurant and Retailers Association (CHARR) testified.
CHARR president Pete Hanson said selling mixed drinks allows distilleries to act as retailers and step outside their bounds as manufacturers, hurting restaurants and bars in the process. Part of the problem is that distilleries currently can’t buy bar licenses, he said. But instead of allowing mixed drinks in tasting rooms, Hanson and CHARR instead favors separate legislation that would allow distilleries to purchase bar licenses.
The decision to ban mixed drinks was left to the ABC Board because a 2014 law regulating tasting rooms didn’t clearly establish whether or not distilleries would only be able to sell their product straight, or mixed with tonics, garnishes and juices, how most people enjoy hard alcohol.
HB 269 would clarify that language by tweaking law to expressly allow distilleries to serve mixed drinks. Other regulations on the books intended to differentiate distilleries from bars would still be in place.
• Contact reporter Kevin Gullufsen at kevin.gullufsen@juneauempire.com or 523-2228. Follow him on Twitter at @KevinGullufsen.
