Distilleries that made hand sanitizer during the COVID-19 pandemic and were staring down a $14,000 Food and Drug Administration fee are now relieved of that extra expense after the Department of Health and Human Services stepped in and canceled the collection.
Earlier this year, the FDA reformed a regulation to allow businesses such as distilleries to produce hand sanitizer as “over-the-counter drug monograph facilities.” Seeing a need in the community during the pandemic, local distilleries like McClintock Distilling produced sanitizer to sell and donate. But the FDA recently announced any registered business making sanitizer would owe them $14,060 by Feb. 11.
The news came as a shock to small-business owners who felt they had been producing a much-needed product while making enough money to stay afloat.
“We had just enough money to keep our staff and everything rolling the way we [did],” Tyler Hegamyer, co-founder of McClintock Distilling on Carroll Creek, told the News-Post after learning of the fee.
Local distilleries and national groups pushed back against the fee, and late on New Year’s Eve the Department of Health and Human Services announced it directed the FDA to stop collection.
“Small businesses who stepped up to fight COVID-19 should be applauded by their government, not taxed for doing so,” Brian Harrison, HHS chief of staff, announced via Twitter. “I’m pleased to announce we have directed FDA to cease enforcement of these arbitrary, surprise user fees. Happy New Year, distilleries, and cheers to you for helping keep us safe!”
The news was indeed welcome for Kevin Atticks, executive director of the Maryland Distillers Guild.
“We’re extremely excited and we feel like it’s the right decision, especially for our distilleries who jumped into producing sanitizer for a public service, not as a new business enterprise,” Atticks told the News-Post Saturday. “It was never a money-making enterprise. It was answering a call to provide a public service, number one.”
What money distilleries did make from hand sanitizer went to essential needs, he said, like keeping employees paid. Atticks estimates there would have been 30 Maryland distilleries affected by the FDA fee. The business owners he’s spoken to since the fee was dropped are “ecstatic,” he said.
“Many of them still had sanitizer left over from the effort that they had planned to continue donating,” regardless of the fee, Atticks said.
Atticks had hoped the fee’s effect on distilleries was just a bureaucratic oversight and, once brought to the federal government’s attention, would be reconsidered. He said he’s glad the voices of the distillery industry were heard.