What's on Tap

What's on Tap

Law change brings opportunity for NC distilleries

Posted October 4, 2015

High spirits: Distillery business booming nationwide

North Carolina has historically been a state that has kept a tight hold on the service and sale of spirits, but a change in the law is set to loosen the cap on existing restrictions.

Rim & Gabe Vilgalys, alongside Jason Parker, began Brothers Vilgalys in 2012 with the release of their Krupnikas – a sweet and smooth spiced spirit made with locally sourced ingredients. They operate out of a small warehouse on the outskirts of downtown Durham where they mix and age their own special brand of liquor. 

Krupnikas is a Lithuanian styled liquor brewed with honey and 12 different spices to give it its unique taste. Originally brewed by the brothers as a tasty drink to make for their friends as well as pay homage to their heritage, it eventually evolved into the business the brothers and Parker now run today. Bottles can be found at local ABC stores for $29.95, and drinks at establishments like Mateo and Bull City Burger and Brewery in Durham and The Foundation Bar in Raleigh.

Jason and Rim offer tours and tastings in the front room of the warehouse, and on Oct. 1 they unveiled a brand new tasting room and bar area in the space next door funding in part by a $20,000 Kickstarter campaign. This openingcoincides with new liquor legislation that allows distillers to sell one bottle per customer per year directly out of their own distillery, opening up a new revenue stream for local spirit manufacturers. Previously no sales whatsoever were allowed at distilleries in the state. 

Distillers: NC laws prohibited growth

Craft breweries, meaderies and distilleries have swept the country in the past few decades, transforming a once small industry into a major source of tourism and economic growth. Experts speculate that micro-distilleries are the next big thing for the booze business. However, many local industry members have been worried about their business prospects being stunted by harsh state regulation.

“The exponential growth of distilling as an industry was passing this state by in large part because of the tougher laws for distilleries here," says Melissa Katrincic, Durham Distillery co-founder.

To entrepreneurs like her, the passage of this law is a chance to catch up to the meteoric rise in craft spirits seen in the rest of the nation.

The push for some distiller autonomy has been in the making for years, beginning back when there were just six or so distilleries in the state. The North Carolina Distillers Association has been fighting this battle for some time alongside industry leaders like Scott Maitland of TOPO Organic Spirits in Chapel Hill and Jeremy Norris of Broadslab Distilling in Johnston County. Now, with more than 30 distillers in the state, local spirit manufacturers have finally won some ground. 

“We are gonna have people who are interested in North Carolina products coming to a North Carolina business, and support that North Carolina business by spending their dollars. We’re going to support North Carolina agricultural products,” says Parker, who uses local honey in the Krupnikas. “We also get to support the infrastructure of the state because we aren't trying to escape any excise taxes or any local ABC payments, and the result of that is that we think this is going to allow us to create more jobs in Durham, and in the state.”

Other control states, like Oregon, have flourished in the wake of direct sales. Portland even has its own area known as Distillery Row where patrons can walk through a several block area tasting and purchasing spirits from micro-distilleries.

Fears remain

However, not everyone is excited about these more lenient lax liquor laws.

Jon Carr, a lobbyist for the association of local ABC boards believes the law is a start down a slippery slope.

“They're seeking to sell one bottle (at a distillery). One bottle leads to two. Two leads to 12. 12 leads to unlimited sales—unlimited leads to sales at sellers that sell other products," he says. He and others in opposition worry that this crack in the foundation might erode the ABC Board’s control of spirits and lead to total privatization.

Industry leaders don’t seem to want privatization, though. When confronted with the scenario above, Rim responded, “That would be chaos. We would have to redo all the stuff we’ve done to get our product on shelves. I find [The ABC System] a much easier system to work under than a private system.”

According to Rim and the local spirit makers interviewed, the passage of this law is a win-win.

“The sales of the local products in the stores go up, because when people want to buy a second bottle, the odds of them coming back to me are very low, actually currently impossible. They’re gonna go back to their local ABC store.”

Job growth, tourism growth, sales growth

While the NC ABC might be apprehensive about the passage of the new law, distillers are clearly ecstatic. The passage of this law has already driven job creation and product expansion.

As of last week, Katrincic reported that the passage of this law “enabled us to hire two distillery guest associates to support the tours and tastings”, while Jason and Rim just recently debuted four new liqueurs and had the following to say about their upcoming ventures, “We may be working on a special product that will release around the holidays, you can tease that in your article.”

Rim hopes that this law and its affect on the local spirits scene continues to spur on the the rapid growth of industry in the local area and state as a whole.


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  • Dave Roth Oct 5, 2015
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    Why would you solicit a quote from an admitted lobbyist? It's like you're doing their job for them for free.

  • Teddy Fowler Oct 5, 2015
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    Total privatization sounds good to me!

  • Rick Fetter Oct 4, 2015
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    "worry that this crack in the foundation might erode the ABC Board’s control of spirits and lead to total privatization."
    Good, it is a business and should be privatized like it is in the vast majority of other states. Competition would benefit the consumer as it is now it is a monopoly.