Prohibition Era restrictions holding back South Carolina distilleries

(The Center Square) – South Carolina Gov. Henry McMaster was on hand this month for the grand opening of Burnt Church Distillery in Bluffton, a 25,000-square-foot whiskey distillery that includes a tasting room, on-site manufacturing, a gift shop and a history room of Lowcountry spirits.

“Just the history and the flavor that they have, playing off of the history of Burnt Church and all that, it’s a remarkable thing,” the governor said while touring the distillery, which will provide 40 full-time jobs and 20 part-time jobs and is expected to draw 150,000 visitors annually.

“Announcements like this one are further proof that our pro-business climate is paying off,” McMaster said. “We’re happy to have Burnt Church Distillery join the Team South Carolina business community, and I can’t wait to see what the future has in store for Beaufort County.”

Co-owner Billy Watterson said it took $15 million over three years to develop the distillery and told reporters he lobbied the touring governor to support companion bills with more than 30 bipartisan co-sponsors working their way through the South Carolina Legislature that would remove Prohibition Era regulations that are impairing the state’s burgeoning brewery and distillery industry.

“He just could not believe that those are laws that are on the books,” Watterson said. “These laws are antiquated. They’re part of an old system. It’s just time to modernize and stop holding back the economy.”

Watterson and the South Carolina Craft Distillers Guild are among vocal proponents of Senate Bill 479, filed by Sen. Sean Bennett, R-Dorchester, and 15 co-sponsors, and House Bill 3769, which counts Beaufort-area Republican Reps. Weston Newton, Shannon Erickson and Jeff Bradley among its 17 co-sponsors.

Neither have been heard in committee, with both awaiting debut hearings before each chamber’s judiciary committees.

Under South Carolina law, distilleries can’t serve food or other kinds of alcohol with the liquor they produce on premises. Tastings are limited to 3 ounces a person, permitted only as part of tours and prohibited after 7 p.m. and on Sundays.

SB 479/HB 3769 would:

• Increase the tasting limit from 3 ounces to 4.5 ounces;

• Remove the requirement that tastings be accompanied by tours;

• Allow distilleries to serve food and other kinds of alcohol;

• Expand hours, while still following Sunday retail sales rules;

• Increase the amount of hard liquor that can be sold for off-site consumption from three bottles to 9 liters.

Bennett has spearheaded efforts to remove “archaic laws” on state alcohol producers to varying degrees of success since 2017, when lawmakers agreed to allow breweries to expand their operations to retail food and beverages.

According to the South Carolina Brewers Association, the number of micro-breweries in the state has tripled to nearly 100 since 2017. Micro-breweries employ more than 5,000 people and contributed at least $800 million to the economy in 2018.

Bennett said the companion bills would apply the same standards to distilleries under state law that regulate craft breweries.

Distilleries “basically want parity and to be treated just like the breweries are now,” he said.

The South Carolina Craft Distillers Guild & Distilled Spirits Council of the U.S. (DISCUS) represents 34 distillers in the state that, before the pandemic, employed 20,000 people and generated $1.6 billion economic impact in 2018.

If the state’s Prohibition Era rules on distilleries were lifted, Watterson told reporters, “We think that our business would grow by 50 percent overnight” primarily from out-of-state tourists.

It’s a no-brainer bill that would create jobs and generate local and state revenues, Bennett said.

Sometimes that’s not good enough for some lawmakers, he said.

“Anytime you’re making significant changes to alcohol laws in South Carolina, you’re going to have to run the gauntlet,” Bennett said.

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