California distilleries could be in danger of losing business overnight. Legislation that allowed them to ship direct to consumer is set to expire by 2026.
“We're hopeful. I mean, I'm an eternal optimist and otherwise I wouldn't be a farmer. You got to be an optimist," said Alex Villicana said, owner of Villicana Winery and Re:Find Distillery in Paso Robles.
For Villicana and many others in the region, it could be the end of their ability to ship directly to consumers, something that was made temporarily legal back in 2020 to offset pandemic shutdowns.
“It basically kept our doors open," Villicana said. "If we didn't have that, we would probably be out of business at this point.”
According to Villicana, the loss of shipping directly to consumers would be about 30%, and for Rod and Hammer distillery in San Luis Obispo, it could be at least a $200,000 hit, according to co-owner Hamish Marshall.
“That's two to three different employees," Marshall said of the potential financial loss. "It keeps the lights on, it pays the mortgage, etc... So it's going to be a hit for sure.”
Beer and wine have no regulations regarding shipping direct, but according to Villicana, craft distilleries are facing opposition from wholesalers, laborers in the industry and even the wine industry itself when it comes to efforts to make shipping directly to consumers a state law.
“That 200-plus craft distillers in California don't have the lobbying ability or strength to battle those huge organizations," Villicana stated.
Luckily for Re:Find and Rod and Hammer, they have ways to offset the hits. Villicana has a successful wine business that they can lean on, and for Marshall, as a larger craft distillery in the region, they have distribution in 47 states. But smaller distilliers might not be so lucky.
“To cut that supply off to these smaller distilleries is really, is disappointing and it's going to hurt a lot of them in this county," Marshall said.
“Hopefully we all weather it and hopefully the tourism industry lasts long enough in Paso Robles that they stay busy enough that they'll be able to keep their doors open," Villicana added.
The legislation that has allowed them to ship directly to consumers in California is set to expire by the end of 2025. Meanwhile, owners like Villacana hope legislators in the state can intervene within the next month.
