Editorial: Tourists toast West Virginia’s new distillery law

About 160 visitors, many from out of state, toasted West Virginia’s new distillery law on Saturday at Bloomery Plantation Distillery in Charles Town, Jefferson County, West Virginia, reported the Journal of Martinsburg.

Here’s to more small business growth — distillery or otherwise — in West Virginia.

Here’s to state lawmakers listening to owners and operators of promising growth businesses and removing — or at least alleviating — outdated taxes, rules and laws.

Here’s to Senate Bill 574, passed by the Legislature and signed into law by Gov. Earl Ray Tomblin, as an improvement in the state’s Prohibition-era liquor and alcohol laws.

The Bloomery Distillery had closed Feb. 10, faced with a myriad of rules and taxes.

“We will never be profitable in the state of West Virginia with this model,” co-owner Linda Losey told the Daily Mail’s Jared Hunt at the time. “It does not compute.”

The state got out of the retail liquor business in 1990, but still controls wholesale liquor sales.

Before this legislative session, to sell at retail, distilleries like Bloomery would have to sell their product to the state, then buy it back at 28 percent markup. Then, by law, they had to mark up their product 10 percent.

They then had to charge an additional 10 percent Market Zone Tax, paid to other liquor retailers in the distillery’s area to make up for their potential lost sale.

“The problem with it is we have an upside down business model,” Losey said at the time. “We pay more to the state and these liquor stores than we make off of our own bottles.”

Because of that business model, Bloomery closed.

But thanks to the Senate bill sponsored by six Democrats and four Republicans, the new law reduces the markup to five percent and the market zone tax to 2 percent.

Perhaps the markup and zone tax need to go too, but at least for now they are at reasonable rates. And the Bloomery Distillery won’t be the only entity to benefit.

“Maybe tourists spend $100 with me, but they’re staying at a hotel, going to the casino, going to the Bavarian Inn, going to MacDonald’s,” co-owner Tom Kiefer said.

West Virginia still has a long way to go to modernize its remaining depression-era alcohol sales laws.

It should completely remove itself from the liquor business, allow Sunday sales and do more to encourage growth of distilleries, wineries and breweries.

Whether you are a drinker or not, Senate Bill 574 is one improvement in the state’s liquor law that every supporter of business growth and entrepreneurship can toast.

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