WASHINGTON – In a recent letter sent to Louisiana’s congressional delegation, trade associations representing 19 distillers throughout the state urged Congress to provide additional economic relief to distilleries facing enormous financial hardship due to the impact of COVID-19.
The letter was sent from Louisiana Distillers Guild President Andrew Lohfeld and Distilled Spirits Council of the United States (DISCUS) President & CEO Chris Swonger.
In the letter, the leaders of both associations noted that Louisiana’s distilled spirits industry had been thriving prior to COVID-19, supporting over 23,000 Louisiana jobs and $1.7 billion in economic activity in 2018.
“As a result of the COVID-19 crisis, many distilleries in Louisiana have been forced to furlough or lay off employees. Absent additional relief, some distilleries soon may be faced with the tough decision to permanently close their doors, thus also impacting their farmer suppliers and others throughout the hospitality and tourism industries,” the industry leaders stated.
They urged Congress to act swiftly to enact further measures that provide liquidity and certainty to distillers who have seen sudden and steep declines in sales with the closure of distillery tasting rooms, restaurants and bars, as well as retail outlets in certain areas and airports.
“The distilled spirits industry is uniquely positioned at the nexus of the hospitality, agriculture, retail, and tourism industries. The livelihoods of farmers, glass bottle makers, truck drivers, warehouse workers, and countless others connected to the hospitality and tourism industry are compromised by the challenges confronting the distilled spirits industry,” they said.
According to a survey of craft distillers, by the Distilled Spirits Council and the American Distilling Institute, two-thirds of respondents do not believe they will be able to sustain their businesses for more than 6 months.
The survey, which included feedback from 118 distilleries across 35 states and the District of Columbia, found that approximately 43 percent of distillery employees have been let go or furloughed since the start of the COVID-19 crisis. The average distillery respondent had almost 14 employees before the COVID-19 crisis and has let go nearly 6 employees.
In the letter, the association leaders urged Congress to include four critical components to aid distillers as part of any additional economic relief package including:
- Provide federal excise tax relief, through permanently enacting the current rates and deferring FET payments
- Seek the suspension of tariffs on distilled spirits
- Support the RESTAURANTS Act, which creates a revitalization fund for eligible food service establishments to keep workers employed, maintain operations, and meet financial obligations.
- Fund and approve another round of PPP and EIDL loans
“We are proud that over 13 small, medium and large distilleries across the state are also doing their part to prevent the spread of COVID-19 by transitioning to produce hand sanitizer, but they will continue to need the help and support of Congress for months to come,” they added.