Oregon Distilling is a Multi-Million Dollar Industry

New Deal Distillery

Forty six distillers in Oregon generated $53.3 million in annual liquor sales in the state. That is almost 12 percent of Oregon’s total liquor sales for 2011. This trend echoes Oregon’s DIY spirit seen in the past with Oregon wineries in the 70’s and Oregon micro-brews in the 90’s. Now Oregon Distilleries are on the rise.

Oregon’s unique marketplace promotes a positive environment for local distilleries. To help improve selection to customers, the OLCC can ship a partial case or just a few bottles to retail liquor stores across the state. This encourages the liquor store owners to feature new and local products because they can order just one or two bottles at a time to monitor how well it sells.

OLCC's Executive Director, Steve Pharo takes pride in providing a level playing field for small manufacturers, which helps them compete with the big national brands. Distillers in Oregon do not have to ‘buy shelf space’ to get their product into stores. Because the markup is uniform on all products, Oregon distillers don’t have to worry their spirits will have a different margin than the big producers.

OLCC carries over 1,800 different distilled spirits products daily. Approximately 336 products are from local Oregon distillers. All Oregon liquor stores carry a selection of Oregon distillery products.

Oregon spirits play a role in Oregon’s emerging ‘mixology’ culture. Pharo notes that local products are weaving their way into the creations of mixologists who are looking for new and unique flavors for their cocktails. The OLCC has seen sales trends that show local products are also popular among Oregon’s tourists because travelers enjoy taking Oregon-made products back with them.

Patrick Bernards from Bull Run Distillery and the Oregon Distillers Guild shared that what he finds very exciting about Oregon & the local distilling movement is that Oregon distillers are producing every spirit category from vodka and gin to whiskey, rum and liqueurs.

In recent years, OLCC has made several improvements to benefit local Oregon distillers. Oregon distillers can offer tastings, or sell their products by the glass at a restaurant in their distillery or another location. Oregon Distillers can also now apply to be "distillery agents" so that they can sell unopened bottles of their product from their distillery or tasting room. Another benefit is that distilled spirits tastings at liquor stores can now include mixers – which helps the customer get a better idea of how the product would be used at home.

Bernards adds that as the local Oregon distilling industry grows, they are able to reinvest in their businesses and hire additional staff. The industry’s growth also helps promote and support many other local businesses from the companies they hire to deliver supplies and create web infrastructure to those who build the distilling equipment.

Customers looking for a particular Oregon liquor product can go to www.OregonLiquorSearch.com for availability. If it isn’t available at the neighborhood liquor store, a customer can place an order at the local liquor store with no additional charge to the customer.

Who has the lowest liquor prices?

You may have heard some say that liquor is cheaper in California. The facts are that only a handful of products are significantly lower, while most products are very competitive. In fact, after you’ve added in the California sales tax, many popular products in Oregon are actually less expensive.

Many retail stores in states like California use a sales tactic called “loss leaders.” This is the practice of drastically marking down a few popular, fast-moving products to entice customers into coming into the store and purchasing other products. But then other products are likely marked higher to make up the cost difference.

The OLCC does not use these techniques to entice people into liquor stores. For public safety reasons, the state does not try to encourage alcohol sales or try to entice people into the stores.

The most common size bottle sold in Oregon is 750 ml also known as "fifths." Most people who purchase alcohol purchase this size - and this is the size where Oregon is the most competitive.

We took the advertised prices from a popular grocery chain and liquor store in California (including their sales tax) and compared them to Oregon. The price comparison showed that the final cost of a "fifth" of Smirnoff Vodka in Oregon was $12.95. In California, the final price (including sales tax) was $15.21. Another popular brand, Bailey’s Irish Cream, was $21.95 in Oregon - the average price, including tax, was $23.92 in California.

In a 2010 study, there were many brands in which the Oregon price was lower than California ’s: Bacardi, Jack Daniels, Seagrams, Jose Cuervo and Hennessy - just to name a few.

Many products were pretty comparable. For example, in Oregon you can buy a “fifth” of Captain Morgan for $18.48 - it’s $19.02 for the Captain south of the Oregon border. Skyy Vodka is currently $21.99 at Oregon liquor stores and you can buy it for about $19.57 in California.

So, for most prices Oregon is very competitive. However, there is one area where prices may be higher. Other states often price the half gallons/gallons of alcohol cheaper than they are here in Oregon. Oregon’s sales data shows that there aren’t as many people buying liquor in large sizes for their personal use. Oregon liquor stores do carry the larger sizes, but the most frequently purchased size remains the “fifth.”

Oregon will not compete for lower prices of the larger sized liquors. The Oregon Constitution has charged the state with “…the promotion of temperance in the use and consumption of alcoholic beverages, encourage the use and consumption of lighter beverages…”

Oregon is a good state for local distillers

Remember the 70’s when Oregon wineries were just getting their foothold in the market?  And do you recall the boom of the Oregon brewers back in the 90’s? Now, the prosperity of Oregon entrepreneurs is shining on the distillery industry. 

                                         

OLCC has licensed more than 40 Oregon distilleries and the number is growing. Our unique Oregon culture promotes a positive environment for craft distilleries. For example, a distillery license in Oregon costs only $100. Another benefit is that distillers do not have to "buy shelf space" to get their product into stores. Because the OLCC treats all products equally – there are no extra fees that local distillers have to pay to get their products on the shelves of liquor stores.

The OLCC warehouse has a unique system for getting new and local products into the market. We refer to this area as “Re-pack.” The OLCC warehouse will break up a full case of liquor to allow stores to place partial case orders. Liquor stores don't need to fill their stock rooms with a full case of each product. They can order just one or two bottles to see how well it sells.   

There have been several recent law changes that benefit Oregon distillers. Distillers can now offer tastings (small samples of product), or sell their products by the glass at a restaurant at their distillery or another location. Another law allows distilled spirits tastings at liquor stores to now include mixers – which helps customers know how they would use the product at home. 

Oregon distillers can also apply to be "distillery agents" so that they can sell their product from the distillery or tasting room. Over half the distilleries in Oregon are also distillery agents.

The OLCC takes pride in helping to establish responsible businesses in our state, and in helping Oregon become a leader in the nation for the burgeoning craft distillery industry.

The truth about Food Carts - today

Recent media attention has raised questions by many about a booth operated by the Oregon Bartenders’ Guild that is selling hard liquor.  Hopefully we can clear up some of the confusion as to how allowing this booth to temporarily sell alcohol is different than issuing an annual license to a food cart.   

For years, OLCC has allowed food carts or “open-air booths” to have temporary sales licenses.  What we believe caught the attention of the news media is that this particular temporary sales license is positioned in a popular food cart area in Southeast Portland. Given the timing of the OLCC’s current discussion of what legal options are available in regard to issuing annual licenses to food carts - we can understand the reporters’ confusion. 

There will be an informational presentation on the topic of issuing an annual license (like that issued to a bar or restaurant) to a food cart during the Commission this month in Bend.  How the Oregon Bartenders’ Guild’s booth differs is that this is a temporary sales license (what we commonly refer to as a TSL).  The Oregon Bartenders’ Guild (a nonprofit organization) approached the OLCC with the concept in September to see if what they were proposing was allowed.

Operation of a TSL at an outdoor event is used across the state, however, it is most commonly used to serve beer and wine.  That being said, selling distilled spirits is not new.  The OLCC has issued other temporary licenses to vendors who sell distilled spirits at events such as rodeos, Cinco de Mayo, and the Fall Festival in Bend.

The Oregon Bartenders’ Guild booth is separated from the other food vendors by stanchions. Unlike what was suggested in the articles, there are no jell-o shots being served by this vendor.  Enforcement personnel visited the vendor at different times last weekend.  Reports were that the licensee was doing all of the things they promised to do.  Staff observed the licensee checking ID and there was no one within the licensed area who appeared to be underage or visibly intoxicated.

In communication with the licensee’s Event Director, he has assured staff that they have and will continue to “monitor people’s alcohol intake to a total degree.”  He went on to share that they are neither encouraging nor allowing people to drink to excess.

Here is some additional information to help frame how the Oregon Bartenders’ Guild’s TSL works:

•          The Oregon Bartenders’ Guild has been granted a Temporary Sales License (TSL)

•          A TSL allows the sale of distilled spirits, malt beverages, wine, and cider for drinking on the licensed premises.

•          A TSL also allows for the sale of factory-sealed containers of malt beverage, wine, and cider for drinking off the licensed premises

•          Food must be available in all areas where alcohol consumption is allowed, but the food service requirements are different for a temporary as compared to an annual license

•          OLCC charges $50 per day for a TSL license

•          Max 31 days for the license – However, they could be granted an additional 29 days for the temporary license if they meet the requirement for an annual license

•          Oregon Bartenders’ Guild is a non-profit organization that is registered with the state of Oregon

•          A non-profit organization with a TSL may receive donated alcohol products from a manufacturer/wholesaler

•          A non-profit organization with a TSL is exempt from the service permit requirement IF they attend a licensee-provided training and sign the OLCC brochure “What Every Volunteer Alcohol Server Needs to Know” (Although, The Oregon Bartenders’ Guild has service permit holders serving the beverages)

Additional information:

Factors used to assess special events:

http://www.oregon.gov/OLCC/docs/liquor_license_and_license_process/specialsaleslicenses.pdf\

Special Events/Temporary Sales Licenses

http://www.oregon.gov/OLCC/LIC/special_event_licenses.shtml#Special_Events_Temporary_Sales_Licenses_

Guidelines for Nonprofit Organizations and Special Events with Alcohol

http://www.oregon.gov/OLCC/docs/liquor_license_and_license_process/tsl_guidelines_rev0111.pdf

Think B4 U Drink: Blackouts, Benders & Binge Drinking Among College Students

As college classes are starting and students are moving in to their apartments, dorms, and fraternity/sorority houses for the fall semester, the OLCC wants to remind students about the dangers of binge drinking.
 
“Binge drinking is a problem that affects a variety of age groups and can be very, very dangerous,” says Rudy Williams, OLCC director of the Public Safety program. “Whether you are celebrating a friend’s 21st birthday, your football team’s victories, or a great score on a test, make sure you are aware of the dangers of binge drinking and the effects that it has on the body.”
 
A few helpful tips for preventing binge drinking:

• Start the night with a non-alcoholic drink or soda
• Limit the amount of money you have with you, and leave your credit card at home
• Drink slowly - try to limit yourself to 1 drink per hour so that you can tell how you feel after every drink
• Don’t drink on an empty stomach. Fill up on food and water before and during the event
• Dance and move around a lot - you can’t drink as much as when you sit down all night
• Go out with a friend who doesn't drink that much, or at all
• Make a decision not to binge drink and help others not to do it
• Do not drink and drive
• Talk with health care providers about your drinking behavior and request counseling if you think you drink too much

“It goes without saying that it is illegal for anyone under 21 years old to drink alcohol. Studies show that binge drinking can have serious effects on a minor’s still-developing brain. Binge drinking as a minor can lead to alcohol dependency as an adult as well as long-term brain damage,” says Williams.

Because intoxication is a progressive reaction, businesses that serve or sell liquor, and their employees need to be able to identify when customers are approaching intoxication and how to manage their consumption. A few of the more common signs of visible intoxication include staggering, slurred speech, loud or boisterous behavior, or annoying other guests or servers. They should also be on the lookout for binge drinkers, because selling or serving to someone who is visibly intoxicated is against the law.

Check out OLCC and Pernod-Ricard's YouTube video targeting the excuses some people make to binge drink.

OLCC launches a new site aimed at liquor licensing

OLCC has launched a new website, www.oregon.gov/OLCC/LIC, to help businesses who have liquor licenses, and those who are applying for a liquor license. The site was designed to provide more convenient and efficient service for license applicants and licensed businesses.

In addition to overseeing the sale of distilled spirits at Oregon liquor stores and its public safety role for businesses that sell alcohol, the OLCC issues and renews more than 14,000 annual liquor licenses, and over 5,000 temporary special event licenses each year.

“The new Liquor Licensing Website is something we’ve worked on very diligently to provide the extra level of service for liquor license holders and license applicants. We hope it will be a great resource for our customers,” said Farshad Allahdadi, OLCC Director of License Services. “It is our division's mission to issue licenses and permits quickly, accurately, and consistently to businesses and employees across the state. By licensing safe and responsible businesses, the OLCC plays an important role in Oregon's economic growth and vitality.”

The new site features a section on “Applying for a Liquor License” with links to specific license types. Applicants can easily find detailed information on the license fees, license privileges, laws and rules as well as the requirements for food service, taxes, bonds and training. The site also walks a potential licensee through the steps of the application process, and lists the forms necessary for each specific license type.

The “Special Event Licensing” portion of the website helps users determine if their special event qualifies for a liquor license, and if so – how to license the event.

There is a section devoted to licensed businesses who want to make changes to their license, such as changing their hours, or adding a sidewalk café or tasting room.

Another great addition is the “Give Us Your Input” feature which allows the public to comment on existing or pending liquor licenses directly from the web.

Go to www.oregon.gov/OLCC/LIC for more information.

Cassandra SkinnerLopata is the new OLCC chair

Cassandra SkinnerLopata has been named Chair of the Oregon Liquor Control Commission’s board of commissioners. She was recently appointed by Gov. John Kitzhaber on July 5. SkinnerLopata has been a member of the OLCC’s board of commissioners since June 2009, representing the 4th Congressional District.

Chair SkinnerLopata has brought a tremendous amount of insight to the Commission from her rich background in public health and law. Her experience with children and families brings an important perspective to the board.

She is a graduate of the University of Oregon School of Law and is currently General Counsel and Medicaid Program Director for Agate Healthcare, the parent company of Lipa (Lane Individual Practice Association) and Trillium Community Health Plan, all located in Eugene. She has held positions on the Governor’s Council on Domestic Violence, the Lane County Human Rights Advisory Committee, and the board of directors for Breaking Free, a non-profit organization promoting empowerment and self-defense for women and girls. SkinnerLopata’s broad range of community service includes volunteering for the Attorney General’s Sexual Assault Task Force, Lane County Legal Aid, and several programs with the Oregon State Bar and the University of Oregon School of Law. She currently serves on the Board of Directors for Head Start of Lane County, the Advisory Board for the Stop Violence Against Women Clinic Project and the Board of Directors for Oregon Women Lawyers. SkinnerLopata was recently recognized as one of Eugene Register Guard Blue Chip’s 20 under 40 for 2010.

SkinnerLopata replaces Philip D. Lang as the Chairman of the Oregon Liquor Control Commission. Lang was appointed by Governor Kitzhaber as the OLCC Chair in February 1998 and after serving 13 years at the OLCC, announced his retirement in June 2011.

About the OLCC Commissioners