How boosting distilleries can boost local communities

North Carolina once led the nation in distilleries. That was up until state and then federal Prohibition. Since the end of Prohibition, however, distilleries have faced a very restrictive regulatory environment, even more so than wineries and breweries.

That’s the bad news. The good news is that relaxing these restrictions can bring about catch-up growth in the distillery industry here:

As breweries and wineries have blossomed already under a license system, North Carolina’s distillery industry is poised for growth under a less restrictive system.

More jobs, more retail outlets, and more distilleries would lead to faster economic growth than could be expected under the ABC system’s strict control. Distilleries rely almost exclusively on local consumers, so building relationships with their neighbors is very important to their survival.

Distilleries also hold the potential for local tourism, especially if the state relaxes many of its restrictions against them (see Table 1 [below]). For these reasons, changes that help boost distilleries also hold the potential to boost community pride.

Colin Campbell’s piece today in The News & Observer provides examples of this potential:

Craft breweries have become community gathering places where you can hang out for hours while sampling unique local beers. The clientele usually avoids drunken misbehavior, so it’s even become popular to bring the kids and let them frolic on the lawn outside.

Because they’re producing liquor, craft distilleries face much more stringent regulations. …

Like breweries and wineries, many distilleries are located in small, rural communities where they can serve as a magnet for visitors.

For example, the tiny Burke County town of Rutherford College is hardly a tourism mecca, but it’s likely that people who come to learn about rum, whiskey and moonshine at South Mountain Distilling Co. will eat at the barbecue joint down the street. And in the Cabarrus County town of Mount Pleasant, Southern Grace Distilleries has repurposed an old state prison as the “Whiskey Prison.”

Less obvious is the distilleries’ positive impact on North Carolina agriculture. Pete Barger of Southern Distilling Company in Statesville told lawmakers that he uses thousands of pounds of grain from local farms in each shift producing whiskey. The spent grain from the process then goes back to the farm to feed cattle. Barger estimates his business indirectly supports the employment of three times the number of people who actually work in the distillery.

For more on this topic, see:

(Click the table for a larger size.)

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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