Distilleries feel panic after surprise fees from FDA; HHS says fees are mistake

Problem Solvers

DENVER (KDVR) — Imagine getting slapped with a $14,000 fee just for trying to help your community. It’s what some distilleries across the country were grappling with just days before the new year.

In the spring, dozens of local distilleries like Ballmer Peak in Lakewood stepped up to meet a community need. Seeing empty shelves for hand sanitizer, they were in a unique position to help with all the tools to make it.

“We gave out hand sanitizer to our local community, to police and fire, the hospitals and health care workers,” said co-founder Austin Adamson.

At the time, most distilleries were just giving the sanitizer away, and didn’t intend to include it in their business model for profit. 

Distilleries began getting approval from the Alcohol and Tobacco Tax and Trade Bureau, and then with the Food and Drug Administration to legally make the product safely. Part of the process involved registering with the FDA.

But months after the fact, well after main suppliers had caught back up with demand and there was no need for small businesses to pitch in, FDA fees started kicking in to the tune of $14,060. 

“Because we registered as a drug producer, we might be charged $14,000. I guess it shouldn’t be surprising with how the rest of the year’s been but it’s still, it’s a little scary,” Adamson said. “$14,000 is a lot!”

After media reports brought the issue to light, the U.S. Department of Health and Human Services, which oversees the FDA, took action and realized this was a mistake.

“Small businesses who stepped up to fight COVID-19 should be applauded by their government, not taxed for doing so,” said HHS Chief of Staff Brian Harrison in a statement to the Problem Solvers. “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!” 

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