As of 23rd March 2020, the US has the 3rd highest number of confirmed cases in the world, with New York now the epicentre of the outbreak.
Most of the nation’s schools and non-essential businesses (restaurants, gyms, bars, casinos) are closed, major retailers have voluntarily shut their doors, and people are being asked to work from home where possible. Though beverage alcohol retail stores are open in most states, having been deemed “essential”, thousands of the nation’s breweries, distilleries and wineries have closed on-site restaurants, tasting rooms and tours, a move greatly affecting smaller producers who rely on revenue generated by visitors.
The immediate efforts to the economy are evident in a rise in unemployment claims, a drop in the US stock market over the past month, and government issuance of COVID-19 stimulus relief.
In response to the on-going crisis, the beverage alcohol industry’s suppliers, distributors and trade organisations have urged members of Congress to offer relief, resource and support to those affected across the industry.
Hand Sanitiser Production
With a nationwide shortage of hand sanitiser during a growing public health emergency, the Food and Drug Administration (FDA) has issued guidelines for preparation of alcohol-based sanitisers as many distilleries both large and small offer to produce in effort to help their communities. Distillers are using their undenatured alcohol to produce hand sanitiser and disinfectant spray, and while they are technically subject to pay Federal Excise Taxes on this denatured alcohol, they are calling for Congress to waive this tax in this instance.
The American Distilling Institute and Southern Methodist University’s Data Science program have created a map of distilleries around the world making hand sanitiser.
Pernod Ricard announced that four of its US facilities are making hand sanitiser to donate to COVID-19 relief efforts: Fort Smith, Arkansas, Smooth Ambler Spirits in Lewisburg, West Virginia, Rabbit Hole Distillery in Louisville, Kentucky, and TX Whiskey Distillery in Ft. Worth, Texas.
Bacardi’s distillery in Cataño, Puerto Rico, which produces more than 80% of the company’s rums, partnered with Olein Refinery to provide ethanol for more than 1.7 million bottles of hand sanitiser.
Diageo announced it will provide 2 million litres (about half a million gallons) of 96% alcoholic grain-neutral spirit to sanitiser manufacturers at no cost. That amount is enough to produce 8 million bottles of sanitiser at 250 millilitres each.
Anheuser-Busch is re-focusing its global manufacturing and distribution networks to create more than 1 million bottles of hand sanitiser that will be donated.
Restaurant/Bar Service Industry Support
A shut down of all non-essential businesses has affected the service industry sector the hardest. According to the National Restaurant Association (NRA), there are over 1 million restaurants and 15.6 million employees across the US. With 37 states now issuing on-premise establishments to temporarily close or revert to take-out only, the sector (which represents approximately 20% of annual beverage alcohol sales volume) is facing economic uncertainty.
Some states like California and New York, are temporarily allowing for bars and restaurants to sell beer, wine and pre-mixed cocktails to-go to mitigate sales loss from closures. However, the overall impact nationwide according to the NRA “indicate that restaurants and the foodservice industry could sustain $225 billion in losses and eliminate 5-7 million jobs over the next three months.”
Several industry companies have donated millions of dollars collectively to bar and restaurant employee relief funds, including Tito’s, Beam Suntory, Diageo, Southern Glazer’s, Patron, Pernod Ricard, Michter’s, Zamora and Sazerac, with more expected.
Ways you can donate:
- USBG Bartender Emergency Assistance Fund
- The Restaurant Workers’ Community Foundation COVID-19 Emergency Relief Fund
- Fireball World’s Biggest Tip Jar
- New Amsterdam “Support Your Local Bartender” ™ T-Shirt
Beverage Alcohol Retail Stores – Essential Business
After the Pennsylvania Liquor Control Board closed over 600 stores statewide, many across the industry warned of the potential of illegal sales or bootleg production and have urged other state governments to deem alcohol retailers as essential businesses like grocery stores and to remain open.
The US alcohol industry accounts for 2.5 million jobs nationally across manufacturers, distributors and retailers, according to the Wine and Spirits Wholesalers of America. instead of closing alcohol retailers, the WSWA recommends states could instead:
“Permit curbside pickup of orders placed online with a retailer or enact provisions to allow curbside pickup during the COVID- 19 pandemic.
Allow retailer employees over 21 years of age to deliver alcohol to customers from off-premise locations after checking the customer’s identification.
Enable restaurants to offer alcohol along with food orders for takeout or delivery. For example, allow consumers to bundle their food and alcohol purchases into a single transaction when ordering.”
Many states have enacted such measures or kept alcohol retailers open. With a work-from-home order in place for its residents, New York State recognised the beverage alcohol three-tier system is deemed essential and therefore exempt from a new rule requiring at least 75% of a business’ workforce to work from home.
Other Industry Efforts
The Distilled Spirits Council has been working across the industry to mobilise and urge Congress to offer COVID-19 economic relief. Read the latest news on efforts here.
The Brewer’s Association (BA), which represents small and independent craft brewers, has surveyed members and found at 98.9% already report some impact of COVID-19 on their business, with 64.1% saying they’ve slowed production. The BA COVID-19 resource centre is available here.
The National Beer Wholesalers Association (NBWA), which represents over 3,000 licensed, independent beer distributors has put together COVID-19 resources to protect employees, customers and partners here.
The American Craft Spirits Association (ACSA) offers resources for members here.
Wine Institute is working closely with the federal, state and local governments to ensure wineries and vineyards can continue to operate. Read updates here.
The Wine and Spirits Wholesalers Association (WSWA) is actively working on various efforts, with updates posted here.
Resources from the IWSR
- IWSR Coronavirus Risk Assessment Model
- Weekly snapshots of the virus’ impact on alcohol consumption behaviour in ten core markets (starting in April 2020)
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