This Week in the Mercury

Monday, January 23, 2012

Will Micro-Distilling Die with Privatization?

Posted by Nathan Gilles on Mon, Jan 23, 2012 at 4:58 PM

  • Illustration by Patrick Long
It’s official: Micro-distilling is big business in Oregon. But maybe not for long.

According to the Oregon Liquor Control Commission (OLCC) the state’s 46 distilleries accounted for $53.3 million in annual sales last year, or about 12 percent of total liquor sales state-wide.

And what's driving those robust numbers, besides Oregonians' need to forget their sorrows? According to the OLCC, the OLCC is.

“We provide a level playing field for small manufacturers, which helps them compete with the big national brands,” Steve Pharo, OLCC executive director, says humbly, in a statement.

Without getting into logistics, that's not untrue. Basically, the OLCC—by marking up everyone's products at the same rate and making it easy for small distilleries to ship just a few bottles of booze to stores—has allowed the local outfits to compete with the big national producers. And the results are real.

State liquor stores carry some 336 brands from Oregon distilleries. Portland boasts a large number of these stylish alcohol producers, many of which, like Integrity Spirits, can be found on "distillery row" down in Southeast.

But don’t let the warm fuzzy feelings from all those local spirits lull you into a false sense of chic alcoholic complacency. Not with a fight over privatization looming.

Last November, Washington residents voted to privatize their state’s liquor sales, moving the sale of booze from state-run stores to privately owned grocery stores. The Northwest Grocery Association, which lobbied for the change, is now targeting Oregon’s state-run liquor stores.

Will this end Oregon’s golden age of local spirits? Maybe yes. Maybe no.

But if OLCC policies are providing the fuel for all that growth in the micro-distillery movement, either these distilleries are going to see their profit margins plummet (and maybe vanish) without the OLCC or—GOD FORBID!—we'll all have to start paying more for our locally made social lubricants.

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