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Kristina Partsinevelos of FOX Business explains how the alcohol industry and small craft distilleries are affected by the coronavirus outbreak and the potential price hike next year.
Distilleries that made hand sanitizer amid a shortage earlier this year were shocked to learn this week that the Food and Drug Administration (FDA) was slapping them with a fee of $ 14,060, but in a reversal on Thursday Evening, the Department of Health and Human Services directed the FDA to stop applying the fee.
“Small businesses that have stepped up to fight COVID-19 should be applauded by their government, not taxed for it,” said Brian Harrison, chief of staff at HHS, in a declaration.
“I am happy to report that we have ordered the FDA to stop applying these arbitrary user fees and surprises. Happy New Year, Distilleries, and kudos to you for helping us keep us safe!”
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Workers bottle hand sanitizer produced by J. Rieger and Co., a Kansas City, Missouri, distillery on March 20. People waited up to two hours to buy the disinfectant, made from overproof gin, in response to the coronavirus pandemic. (AP Photo / Charlie Riedel)
The coronavirus pandemic caused a shortage of hand sanitizer earlier this year, so hundreds of distilleries across the country stepped up and transitioned their production lines to hand sanitizers to fill gaps.
But on Tuesday, the FDA announced that those companies were to pay a fee of $ 14,060 to manufacture the hand sanitizer as part of a new over-the-counter drug user fee program, which was set up by Coronavirus Aid, Relief, and Economic Security (CARE) Act in March.
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“These unexpected charges serve to punish already struggling distilleries that stepped in at a time when the right thing had to be done,” said Chris Swonger, President and CEO of the Distilled Spirits Council, before the reversal.
An FDA spokesperson told Fox News earlier Thursday that these “user fees will provide additional resources to help the agency conduct our important regulatory activities in a more timely manner and ultimately help provide public access. to innovative over-the-counter monographs “.
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But distillery owners couldn’t believe the surprise fees after an already difficult year that wiped out results.
“After all that, do you come to us and tell us we owe you money?” And the same goes for the people who made hundreds of thousands of bottles and those who made 100? There are small distilleries that haven’t even made $ 15,000 in revenue this year, ”Jason Barrett, owner of Black Button Distilling in New York City, told WXXI.
Constance McDonough of Fox News contributed to this report.
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