JLF Triangle Blog

A Whiskey Maker’s Regulatory Nightmare

The January/February issue of The Atlantic includes an amazing piece about the regulatory nightmare being endured by Ernest Scarano of Ohio, who owns a small distillery. Here’s what he has to do to comply with government regulations.

Scarano unlocked an inside barn door to show me the horse-stall-size space where his rye was aging in small casks. “When you put it in, you have to pay an intake fee, and then you have to pay a storage fee, and then you have to pay an outtake fee,” he said. Transporting the liquor—which in Scarano’s case involves moving the whiskey from this stall to a retail counter about 50 feet away—triggers a minor avalanche of additional notifications and paperwork, exacerbated by the fact that Ohio, as a “control state,” holds a monopoly on the sale of liquor. This means Scarano has to “buy” the liquor he’s made himself from the state before he can resell it to customers.

This is just one example of why we must be very careful about imposing regulations. There must be a cost-benefit analysis, and that is rarely done. Here in North Carolina, regulatory reform is a key priority for the legislature. We will likely see lawmakers continue with reforms they passed last session.

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