Distilleries facing more than $14,000 in fees after making hand sanitizer amid COVID-19 pandemic

DELMARVA – Hand sanitizer is something that we’ve all relied on during the COVID-19 pandemic. But local distilleries say that the price they’re going to have to pay for making it is coming as a big surprise, and a financial blow. “We did this to help our community and to be penalized for that in the eleventh hour after the most challenging year just feels incredibly wrong,” said CEO of LYON Rum and President of the Maryland Distillers Guild Jaime Windon.

The Food and Drug Administration announced that distilleries that temporarily registered as Monograph Drug Facilities to produce hand sanitizer amid the COVID-19 pandemic must now pay $14,060 in fees for fiscal year 2021. If they don’t de-register as one of those facilities by the end of New Year’s Eve, they could be on the hook for another $14,060 for fiscal year 2022. “In nothing that we saw when we went through that registration process that indicated that there would ever be a fee associated with our being willing to step up and create this product,” said Owner and Head Distiller of Painted Stave Distilling.

Rasmussen says making hand sanitizer was never something they intended to make a profit on. Instead, he says they only wanted to help serve their community and keep their lights on and employees on the job. He says now that they’re facing the fee, it only piles on more uncertainty in an already unpredictable 2020. “We finished the year in a spot where it’s not where we want to be. But we didn’t feel as concerned or as bad as we imagined we would be. This puts us significantly behind,” said Rasmussen.

Windon says they’re also scrambling to get off the hook. She says they haven’t made hand sanitizer in months, and had no idea that a fee was on the way. “This is a fee that is retroactive in many ways. That’s how we feel at least. It’s something that we already did, and yet it’s due in February,” said Windon.

Thursday night, the United States Department of Health and Human Services announced that they blocked the fees from the FDA. In a tweet, HHS Chief of Staff Brian Harrison said “Small businesses who stepped up to fight COVID-19 should be applauded by their government, not taxed for doing so.” He continued, “I’m pleased to announce we have directed FDA to cease enforcement of these arbitrary, surprise user fees. Happy New Year, distilleries, and cheers to you for helping keep us safe!”