The craft distilling movement is growing rapidly. Indeed, the torrid pace of new distillery openings and the boundless enthusiasm of new entrants seem strangely reminiscent of craft brewing (then “microbrewing”) in the late 1980s and early 1990s. Craft distillers even have a simmering product integrity issue (the use of purchased neutral spirits) that splits the new industry like contract brewing divided craft brewers 20 years ago. There are, no doubt, significant differences, but craft distilling today seems poised for a period of growth like the one craft brewers have been (mostly) enjoying for the past 25 years. Not surprisingly, then, a growing number of craft brewers have followed the path of Anchor Brewing (or should I say Anchor Distilling) and expanded their offerings to include distilled spirits. But as brewers quickly discover, there are numerous legal, regulatory, and tax differences between these related, but distinct, businesses. While a full exploration of those differences could fill a rather thick book, this article briefly highlights the most important.
This article was originally published in the March/April 2014 issue of The New Brewer.