LANSING, Mich. – The Michigan Craft Beverage Council is now taking applications for its new program, called the qualified small distiller program, to June 16.

Michigan’s small distillers may file an application with the Michigan Dept. of Agriculture and Rural Development (MDARD) to be certified as a qualified small distiller. The advantage of this certification is the distiller will then qualify for a reduced mark-up beginning January 1 of next year. And the reduced mark-up is significant, according to Janelle Jagmin, executive director of the Michigan Craft Beverage Council.

“Right now distillers pay a 65 percent mark-up when they sell their product to retail establishments,” Jagmin said. “This program cuts the mark-up in half, to 32.5 percent. The retailer can then take that savings and use it to grow their business.” Distillers buy winter wheat, rye, corn, and other grains to make whiskey, vodka, gin, bourbon and other kinds of alcoholic beverages. According to a recent announcement about the program, a distiller that is already a certified small distiller must renew their Qualified Small Distiller Certificate by July 1 to retain the tax break.

According to Jagmin, Michigan has 80 craft distillers in operation right now and Michigan is currently seventh in the nation for the number of craft distillers. “This industry is definitely growing right now,” Jagmin added. The new program creates an incentive for craft distillers to use Michigan grown grains, thus providing an additional market for the state’s farmers.

As Jagmin noted, the program is very new, having started just last year after Gov. Gretchen Whitmer signed into law Public Act 135, which seeks to help the craft distillers’ industry by lowering mark-up costs associated with the purchase of Michigan grains. “Small businesses are the backbone of our economy and today I am proud to sign bipartisan legislation that supports an iconic and growing Michigan industry – craft distilleries,” said Whitmer last July 5.  

“The signing of this bill by Gov. Whitmer is the single largest help for craft distillers since 2007 when Grand Traverse Distillery started producing spirits,” said Ken Rabish, owner of Grand Traverse Distillery. “We have always used local grain and this is going to help the bottom line tremendously. We were planning on a price increase with our vodka line since we have never increased the price and with the cost of living adjustments we just couldn’t afford to sell it any longer at $30 a bottle. This program  helps to maintain the cost for consumers.” A certified small distiller is required to buy at least 40 percent of the grain they use from Michigan growers for their products. More about this program can be found at the MDARD web site at http://www.michigan.gov/mdard, or by emailing mdard-qualifieddistiller@Michhigan.gov.