Calwise Spirits Co. Owner Aaron Bergh Credits Support from Media and Public for Decision Reversal But Warns the Dust Has Not Settled
PASO ROBLES – Following immense public backlash, the Department of Health and Human Services (HHS) has ordered the Food and Drug Administration to reverse its decision to impose a last-minute $14,060 tax on emergency manufacturers of hand sanitizer.
“The FDA’s announcement at the beginning of this week was set to wipe out our holiday-season profit,” said Aaron Bergh, a Paso Robles-based distiller, and owner of Calwise Spirits Co. “Because the people rallied around us and spoke out, we found ourselves the recipients of a New Year’s miracle.”
When the COVID-19 pandemic hit the U.S. in March, there was an extreme shortage of hand sanitizer. In response, the FDA issued an emergency declaration that allowed distilleries to produce hand sanitizer. Bergh’s distillery produced over 5,000 gallons of hand sanitizer that was distributed to many federal and state agencies, such as the FBI, Department of State, Cal Fire, and California Office of Emergency Services. On Monday, Dec. 28, it was announced that all “monograph drug facilities,” including distilleries, owe the FDA a $14,060 facility fee in 45 days.
Last week Bergh spoke out to several news publications, including the Paso Robles Press, and the story went viral and soon gained coverage in every mainstream media outlet. It attracted the attention and rage of concerned citizens and even some members of congress. After roughly 24 hours, the HHS announced it was taking action to prevent the FDA from enacting the fees.
Even though the HHS has ordered the FDA to retract the fee, the FDA has not yet stated its intentions to follow through. For distillers, there are still many questions that remain to be answered.
“Although the fee is supposed to be waived for 2020 operations, it appears distillers will still be charged if they continued operating past Jan. 1, which includes selling any current inventory. Are distillers that deregistered to avoid fees going to have to take a loss on their current inventory that is now rendered unsellable?” Bergh asks.
HHS Director Brian Harrison’s statement asserts that leadership was unaware of the plan to enact the exorbitant fee and would have never authorized such an action.
“Perhaps Director Harrison did not authorize this, but it’s clear that someone in a high-ranking leadership role at the HHS or FDA did,” says Bergh. A month ago, he and dozens of other distilleries throughout the country were randomly audited.
One of the FDA inspectors that contacted Bergh said she was part of an operation officially dubbed “Mission Critical,” which included examining production records as well as surveying the sales value of hand sanitizer produced, sold, and on-hand. The inspector also told bergh that the FDA was considering imposing a tax on sanitizer.
Bergh concluded, “Now it’s obvious to me that Mission Critical wasn’t just about public safety. Part of its purpose was to assess how big the money pie was so they could take a slice.” He adds, “I respect and appreciate the FDA’s efforts to keep the public safe by preventing defective products from entering the market. I would have understood if they were operating on a complaint-basis but conducting random audits on law-abiding distilleries during the resurgence of the pandemic and business closures was unreasonably burdensome.”
For now, it looks like distillers can rest easy knowing they don’t have a $14,060 bill to pay and can focus on the more pressing matters that the new year will bring.
“I’m grateful the Distilled Spirits Council of the United States and American Craft Spirits Association were tirelessly advocating on our behalf with the federal government. I think the result of this story is proof that people can make a difference at the grassroots level. Ultimately, this would not have changed without the outcry and support from the general public. Thank you to all who stood up for small businesses like us – your voices were clearly heard.” Bergh shared.
About Calwise Spirits Co.
As one of the youngest master distillers in the world, proprietor Aaron Bergh has created a line of premium spirits that embody the essence of the Golden State. Visit CalwiseSpirits.com