Government Drops $15K Fee for Distilleries Producing Hand Sanitizer

In the spring, when PPE products like hand sanitizer were in low supply from traditional manufacturers, alcohol distilleries stepped in and used their own facilities to help boost supply.

Now, almost a year after the initial shutdowns in the U.S., those distilleries that answered the call were hit with an unexpected charge. It turns out that the FDA required them to register as drug makers, which are typically subject to a $15,000 annual fee.

Blindsided by this, and indignant that their good deed was seemingly going punished, the distilleries and the public alike voiced their concerns to the FDA.

The authorities agreed.

“Small businesses who stepped up to fight COVID-19 should be applauded by the government, not taxed for doing so,” Brian Harrison, Department of Health and Human Services chief of staff, said in a statement, according to CNN. “I’m pleased to announce that we have directed [the] FDA to cease enforcement of these arbitrary, surprise user fees. Happy New Year, distilleries, and cheers to you for helping keep us safe.”

Harrison said that distilleries, from small-batch producers up to big names like Tito’s Vodka, were charged this fee “by mistake,” and that HHS leadership hadn’t approved the charge.

“Many of these are rather small business, craft distilleries, and their business and livelihoods were damaged when restaurants closed down,” Harrison said. “But they jumped into the fray and joined the fight against COVID. It was nothing short of heroic. They are American heroes.”

Knowing that the government won’t implement a surcharge for helping out in a time of need might be an incentive for other companies to join in, producing things like hand sanitizer.

We've seen this in the promotional products industry, especially on the apparel side, when suppliers and decorators shifted their attention to PPE production or sourcing for health care purposes, as well as a greater focus on products like reusable face masks for civilians to use on a daily basis.