Farm Distillery Law for New York – Devin Morgan Explains

shot-of-rum-01 distilleryDevin Morgan, Knull Group

Back in October 2012, we introduced New York’s farm distillery law to our readers. Domestic small batch, craft spirits with regional character are just finding their place in the U.S. market and we are still in the early stages of amazing growth. New York State and Governor Cuomo have taken a stand that New York will be home to some of the leaders of this revolution (alongside the continued growth of New York wine, cider, and beer). New York State Wine, Beer & Spirits have their own economic development website touting recent growth in farm wineries (17%), microbreweries (74%), cideries (83%), farm distilleries (211%), and hop production (400%). A question we get a lot from entrepreneurs thinking about moonshine, whiskey, vodka, and the many variations of distilled beverages is, “What can you actually do as a New York farm distillery?”

First, you can make moonshine, whiskey, vodka, or whatever distilled spirit you like. You have to license a specific location and they will want the details of your equipment and what you are planning on making, but the recipe is largely up to you. The real catch is that you have to use primarily New York farm and food products as ingredients (other than water). Fortunately, we grow a lot of great stuff around the state, so there are still plenty of options.

Second, you can bottle the liquor you make for sale in containers of one quart or less. Unlike larger distilleries, you can sell directly to pretty much anyone in the state licensed to buy, including direct to consumers, to restaurants, bars, and liquor stores, to wholesalers, and to other farm distilleries, wineries, and breweries. You can also sell at farmers’ markets, the New York State Fair, and many county fairs. Note that consumer sales need to be face-to-face, so internet, telephone, and mail order sales aren’t possible at this time. But to assist with face-to-face sales, you get a fairly broad license to hold tastings, in your tasting room, or elsewhere (including farmers’ markets and fairs).

Third, you can sell in bulk to other distilleries and wineries for use in combined spirits, like fruit brandies. Unfortunately, you can’t sell in bulk to other farm distilleries and can’t buy in bulk (and omission in the law I find odd), so it doesn’t appear that a farm distillery can rectify or blend other people’s spirits without pursuing a separate (and much more expensive) rectifying plant license.

Which brings us to the fourth point, you can combine your farm distillery on the premises of most other licensed producers. So, you can add a farm distillery to another distillery, a winery, or farm winery. You may not be able to add the farm distillery to a brewery though.

What about a distillery pub? Well, you can also have a separately licensed restaurant on the same premises as the farm distillery that can serve beer, wine, and liquor. So, there isn’t a single license for the distillery pub, but you can still do it by getting both a farm distillery and retail restaurant license for the same place.

Oh, the other big limitation of New York farm distilleries is that you can’t manufacture more than 35,000 gallons per year. For most craft distillers, this really isn’t a problem. And, if you get that big, you always have the option of applying for the appropriate large distillery license. So, get out there and build your own farm distillery to make great craft spirits and help put New York on the artisanal liquors map.

By the way, the New York State beverage business website has a handy chart for figuring outwhat kind of incentives there are for the NY beverage industry to help you get started with funding your dream.

About the Author
Devin Morgan is Co-founder and Of Counsel to Knull Group (www.eatdrinklaw.com), a firm for food-obsessedbusiness and intellectual property lawyers in Cooperstown, NY.  He is focused on the growth of the craft food and beverage industry in New York State and is the primary author of the Eat. Drink. Law. blog.  Click here to receive a free report from Devin on growing a distinctive food or beverage business.  He is also a big fan of the Cooperstown Farmers’ Market.