Ohio liquor purge worries local craft cocktail bar owners

Posted at 8:00 AM, Nov 29, 2016
and last updated 2016-11-29 19:02:36-05

CINCINNATI -- Two steps forward, one step back.

That’s how several local craft cocktail bar owners are characterizing the Ohio Division of Liquor Control’s purge of 705 slow-selling distilled spirits from its warehouses as part of an inventory reduction program.

"It really, really sucks," said Molly Wellmann, whose Wellmann Brands owns Japp’s Since 1879 and the Famous Neons Unplugged in Over-the-Rhine, as well as Myrtle’s Punch House in East Walnut Hills. "It seems like it is going backward in a way."

In October, the ODLC said that the reduction “optimized inventory” within its state-licensed liquor stores and opened space for higher-selling products at its warehouses ahead of the holiday season. Ohio is one of 17 alcohol control states, which means it has a monopoly over the purchase and distribution of liquor with a 21 percent ABV or above.

"The reduction is the first in the last three years, a time in which we added nearly 1,000 products and did not remove any," said Kerry Francis, director of communication for the Ohio Department of Commerce, of which the ODLC is a part.  "The product line right now is around nearly 3,000 products."

Francis said those slow-selling spirits will remain available for retail sale at individual liquor stores, but the state will not accept new orders for those products. That means once supplies sell out, they will not be replenished.

Those items represent only about 4 percent of liquor sales in Ohio, according to the ODLC. However, craft cocktail drinkers will still feel the impact, Wellmann contends.

"It really does hurt Cincinnati and Ohio for that matter,” she said. “People in Cincinnati are well traveled, and they are introduced to these incredible products. Then they come home and expect to get these incredible products."

Quantity versus craft

Wellmann acknowledged that when she started championing craft cocktails in Cincinnati in 2008, she did not have half the items still on the state's list of available spirits for sale. But while the percentage of sales of some of the purged items is small at a state level, Wellmann, Sundry & Vice owner Stuart King and Jacob Trevino, owner of the Overlook Lodge and Video Archive, contend the removal of those specialty spirits has a bigger impact on them than the state realizes.

"In terms of loss, so much of our bar program was predicated on introducing new, unique and family-crafted products to this marketplace," said King. "We lose the opportunity to create really unique cocktails."

Stuart and Trevino both lamented the removal of Copper & Kings brandy from state warehouses. Each owner said that as a newer craft distillery based in Louisville, Copper & Kings is at a disadvantage under Ohio's high-sales volume system, as it is just starting to build a reputation.

That also means craft cocktail bar owners are at a disadvantage when it comes to introducing new products that their bars can build reputations on, they said. "This rule seems to not allow smaller distilleries to get their foot in the door," Trevino said.

Wellmann cited St. Elizabeth Allspice Dram as an example of a specialty liqueur on the ODLC's purge list that her bartenders use in making many classic cocktails.

"It is something that is added in small amounts," she said, noting that the liqueur likely will never see huge sales numbers.

Beyond losing available product, the bar owners see the reduction as an example of problems the craft cocktail industry faces in general while operating within the state's liquor-control system.

"We are fighting for the availability of the product in the market,” Trevino said. “It's our job to bring and introduce new spirits. Sometimes that takes time."

Advocating for change

Trevino said one solution is to give bar owners more direct control of what they stock. Under the current system, bar owners must order from the OLDC’s list of available spirits through a local state-assigned liquor store. The liquor store places the order with the state, which then ships it from a privately licensed warehouse to the store. The store is then tasked with notifying the bar owner to pick up their order.

If the spirit does not appear on the state’s list, bar owners or licensed sales representatives for liquor distribution companies can petition the ODLC to add it.

"The hard part is selling and getting the sales because there are just too many people to get it screwed up," said Adam Roelle, who became the Ohio spirits manager for Cavalier Distributing in 2014 after running a state liquor store in Columbus. "Why should they have to go through this much of a process to just give people what they want? I really feel like an advocate for them."

Roelle said under current law he is more of a marketer for distilled spirits than a distributor or sales rep. However, the state does currently have a more streamlined system for beer and wine distribution, he said. Basically, bar owners can order those products from a private distributor such as Roelle. In that system, Cavalier Distributing then purchases the bar owner's ordered product from manufacturers and sells it to the bar directly.

Under that system, bar owners have more control in determining which wines and beers will make their individual businesses profitable, versus the current state system for spirits, which is driven by high-volume sales and is therefore easier for the ODLC to manage.

Roelle, who works closely with King at Sundry & Vice to find new spirits to order, said he does not foresee immediate changes to how craft cocktail bars currently get their hands on high-quality or rare distilled spirits.

"It is more important right now than ever that customers who care about this stuff use it," he said. "When people want to bring in an awesome, cool new gin, I tell them, ‘If you don't use it, you're going to lose. If you want this to be available, this is what you've got to do.’ These places definitely need to put their money where their mouth is."

Wellmann, Trevino and King said they are discussing ways to advocate for their business interests collectively on a state level, and Francis said the Department of Commerce is willing to listen.

"We are looking at ways to increase two-way communication," she said.