Central Coast Distilleries Face $ 14K Fee From FDA For Making Hand Sanitizer

During a public health crisis, distilleries across the country pumped out hand sanitizer to cover a national shortage.

Now those same distilleries are being told to pay the Food and Drug Administration (FDA) over $ 14,000 to make over-the-counter drugs without the proper license.

“I feel like the FDA greeted me when they needed me, now they keep the door closed for me on my way out,” said Aaron Bergh, owner of Calwise Spirits & Co.

For distilleries like Calwise Spirits & Co. in Paso Robles, making disinfectant has been an opportunity to bring workers back on leave and avoid bankruptcy during the pandemic.

He says that in March, the FDA reached out to distillers for help making more products and waived the drug registration and approval process to get the disinfectant quickly.

In six weeks, Bergh and his team made over 5,000 gallons of the anti-germ formula and shipped it across the state to government agencies and frontline workers.

Now he and nearly 800 other distillers in the United States owe the FDA $ 14,080 in setup fees.

“I feel that no good deed goes unpunished,” Bergh said. “What I could have done what others have done and not register with the FDA and start doing it without registering, but because I followed the rules and registered, now I am audited and taxed. ”

Shock and frustration pervades the industry.

“There must be some mistake. We’re the good guys. We’re the guys who [the FDA] We wanted us to help and we stepped in and helped, ”said Eric Olson, owner of the Central Coast Distillery. “That was our whole goal and there was no way we had to pay later for helping.”

The CARES law passed in March amended the regulation of non-prescription drugs, which allowed distilleries to manufacture the product according to FDA guidelines.

However, as part of the review, distilleries are categorized as “over-the-counter monograph establishments,” meaning business owners must pay the associated fees for the fiscal year by February 12.

On Thursday evening, the US Department of Health and Human Services tweeted a recommendation that the FDA “stop applying these arbitrary and surprise user fees.” However, there has not yet been a response from the FDA.

Olson says many distillers either lost money or didn’t even sell sanitizer.

Many local business owners like him have even donated bottles to homeless shelters and first responders.

“It was in such a hurry to get started. No one even tried to make money. These guys were just trying to get it through people’s hands. I mean, honestly, it was goodwill, ”Olson said.

In an email to KSBY, an FDA spokeswoman said information about the fees was published on the agency’s website in May. On Tuesday, December 27, he announced the amount of the fees.

In a statement, the FDA said it “appreciates the industry’s willingness to help bring alcohol-based hand sanitizer to the market to meet the growing demand for these products during COVID- 19, and we appreciate their efforts. We understand the concern that manufacturers are having roughly the fees they are being asked to pay, especially small businesses during this difficult time. “

Distillery owners have until the end of 2020 to decide whether they want to continue disinfectant production into the New Year, which would cost them an additional $ 14,000 in registration and installation fees.

For Bergh, it’s not worth it.

“This morning, I had to cancel my FDA registration. I would have liked to keep it, so I have it all ready in case there is another massive shortage and we can start manufacturing, but the FDA has created too much risk, ”Bergh said.

The U.S. Distilled Spirits Council said in a press release that the FDA’s announcement came without warning and that they are urging the agency to waive the fee.