Distillers may get lift from the state

OLYMPIA — Don Poffenroth can show you how he makes whiskey from Washington-grown grains at his new Dry Fly distillery in Spokane. But he can't sell you a bottle or even offer a nip.

Customers who want a taste have to walk to a pub next door to buy a drink. If they want to purchase a bottle, Poffenroth says, he has to "draw them a map to a liquor store."

The reason: Only state liquor stores can sell bottles of booze, a holdover from the end of Prohibition in 1933. But that's likely to change soon.

Bills moving through the state House and Senate with bipartisan support would let Poffenroth, and others like him, operate craft distilleries that offer free samples and sell up to 9 liters of liquor per customer.

If approved, Senate Bill 6496 is expected to jump-start a new industry in Washington. Several distilleries could open around the state, including one in Woodinville.

"I think it's going to be a huge explosion," said Arlen Harris, director of the Washington Brewers Guild and a lobbyist pushing the distillery bill. "I imagine that within the first year there will be 10 to 12."

The measure has the backing of Democratic leaders in the House and Senate. There's no apparent opposition, but it's too early to tell if that will remain the case. Gov. Christine Gregoire's office said the governor isn't familiar with the bill yet.

Poffenroth, who opened shop four months ago, is currently the only distillery in the state and the first since Prohibition. He makes whiskey, gin and vodka. There are many more people, however, who want to start their own distilleries and say the proposed law would make it much more feasible.

"For a long time in Washington state, it was very restrictive, and there wasn't a lot of incentive to start a small craft distillery, but this bill will take many of those roadblocks out of the way," said Danny O'Keefe, a Vashon Island songwriter who is considering building a distillery in Woodinville with some partners.

In addition to letting distilleries offer free samples — up to 2 ounces in half-ounce glasses per person — and sell bottles, it would lower the current license fee from $2,000 to $100. It also would require at least half of the raw materials used to make liquor to be grown in Washington.

The changes would put the distilleries on par with wineries and microbreweries, proponents say.

By law, distilleries currently can sell liquor only to the state, said Brian Smith, a spokesman for the Washington State Liquor Control Board. And the state is not obligated to buy their product.

"We're a retail outlet. We want to put on our shelves the kind of product people are looking for," Smith said. Distilleries would have to "come to us, and we would take a look at their ability to ship the product and market it and back it up."

Poffenroth said distilleries now have to buy their equipment, build a distillery, get a state license, "and the state could say, 'We don't like the way you did your packaging so we're not going to buy your stuff.' "

That gamble paid off for Dry Fly.

Poffenroth said he produces 250 cases of liquor a month. "We're selling out," he said. "Everything that we produce, as soon as we bottle it, it's leaving the next day to the state warehouse."

The proposed craft-distillery legislation would help him by making Dry Fly "an agri-tourism kind of facility," he said.

Berle "Rusty" Figgins, who has been involved in the state's wine industry for years, recently built two distilleries in Washington that are waiting to be licensed. One is in Ellensburg and another in Mattawa, Grant County.

He called the legislation "a real dramatic step."

With the craft-distillery legislation, "If you're a manufacturer, well, you're being given extraordinary, by comparison, new freedoms. It's great," he said.

Craft distilleries are a growing trend nationally and are considered by many to be one of the last untapped markets for specialty alcohol products.

Oregon has allowed craft distilleries for years and now has 17. Most are in the Portland area. Four have opened in the past two years, and three more are expected to open in 2008, said Mike Sherwood, vice president of the Oregon Distillers Guild.

Advocates say craft distilleries would provide an additional market for fruit and grain growers in Washington. They often locate near existing wineries and breweries.

"Say I want to make a brandy: You make a wine first, and you distill the alcohol out the wine," Figgins said. "By heating the product, you drive off the beverage alcohol as a spirit vapor and you cool it out of the liquid form, and it comes out of the still."

Figgins said that when "you mention the word 'still,' people think moonshine. That's why I want to use 'distillation.' We don't have stills. We have distillation apparatus."

Andrew Garber: 360-943-9882 or agarber@seattletimes.com.