WATERTOWN, N.Y. (WWNY) - Just days ago, distillery owners across the country were worried their generosity during the pandemic may cost them thousands of dollars. But, it turns out they won’t have to pay after all.
Back in March, Clayton Distillery stopped making spirits and switched to pumping out hand sanitizer.
Owner Mike Aubertine says it was something the distillery could do to help as the demand for disinfectants went through the roof.
But then 9 months later, Aubertine and other distillery owners got surprising new: the government wanted to impose fees on them for doing that work and it could have cost the businesses around $23,000 each.
“The fact that, you know, we started it in the beginning and ended up donating a lot of it and not ending up making hardly any money on it to begin with and now what we did make is going to be gone, given back to the government in fees,” said Aubertine.
The fees were initially imposed by the Food and Drug Administration as part of what’s called a monograph drug user fee program.
The FDA was looking to apply it to facilities like distilleries which produced hand sanitizer during the pandemic.
President and CEO of the Distilled Spirits Council Chris Swonger says the council’s phones were ringing off the hook.
“There was a lot of confusion because no one was anticipating this so the entire industry mobilized and started to call their members of Congress really freaking out,” said Swonger.
Swonger says the news got to officials in the Department of Health and Human Services, who say the action was not cleared by their office.
After department leaders discussed it, they deemed the FDA doesn’t have the authority to issue such a rule, meaning these surprise fees won’t need to be paid.
Swonger says it’s a win for all parties involved.
This is a great, good government, good advocacy, you know, story that will certainly help all of these businesses navigate the challenging days of the pandemic over the next couple of months,” said Swonger.