Surprise $14,000 FDA fee could be 'death blow' for local distillers

At the beginning of the pandemic, dozens of local distillers stepped up and started making hand sanitizer. Now they could face a more than $14,000 FDA fee.
Posted at 3:04 PM, Dec 31, 2020

At the beginning of the pandemic, dozens of local distillers stepped up and started making hand sanitizer, which was in short supply last spring.

It was a point of pride for local distillers early on in the pandemic, while they were hampered like most industries, they found a way they could still help.

“Our members and distillers across the country just shifted operations to do the right thing to help people,” Long Road Distillers Co-Owner Jon O’Connor said.

Though this week they’re finding out they could be responsible for a more than $14,000 fee from the FDA.

The feds initially made it easier for distillers like Long Road to make hand sanitizer and they did, in droves.

Now nine months later it could cost them more than $14,000 for helping out.

It’s because distillers who wanted to help, had to register as an over-the-counter drug producer with the FDA.

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“We believe part of the most recent CARES Act that was passed, the FDA included a fee for over-the-counter drug manufacturers,” O’Connor explained.

If local distillers are forced to pay the $14,000, O’Connor, who also serves as President of the Michigan Craft Distillers Association, says it could be a "death blow” for even more small businesses.

“We understand the severity of this pandemic, and you know we’re trying to do the right thing, and it's just it would be really unfortunate for those of us that stepped up to do the right thing to try to help, if that $14,000 fee was the thing that might be the end of it all,” O’Connor added.

“Incredibly unfair. It's really kind of crazy applying a substantial retroactive fee and giving us only three business days to de-register ourselves from getting an additional unknown fee next year,” says Joel Bierling of Bier Distillery in Comstock Park.

“Really puts the cap on a bad year. Until now, our hand sanitizer story was our highlight in a dismal year,” Bierling added.

O’Connor says he’s already been in touch with lawmakers to see if they can help.

In the meantime, Long Road is no longer making hand sanitizer, so they unregistered with the FDA to avoid getting hit with another fee in the new year.