Dear friends and supporters,
We are heartbroken to share that we have stopped operations and are no longer producing our amazing bitters. Recently, we were notified by the AZ Department of Liquor Licensing and Control (DLLC), in conjunction with the Attorney General’s (AG) office, that the DLLC has reversed a 2013 decision and have now declared that cocktail bitters are considered a “spirituous liquor” in Arizona. Due to this ruling, AZ Bitters Lab (AZBL) has no reasonable path to continue production operations, at this time.
BackgroundIn 2013, the DLLC ruled that cocktails bitters are exempt from liquor licensing due to being designated as a flavor extract provided the individual product is classified as such by the Department of Treasury Tax and Trade Bureau (TTB). AZBL has received TTB certification on all of our products as “non-beverage alcohol/flavor extracts”. It is common practice throughout the industry, in nearly all US states, and throughout Australia and Europe, to treat cocktail bitters in the same manner as vanilla extract.
We were recently contacted by the DLLC and informed of their revised determination of our product, resulting in numerous conversations (via phone and email) with them and the AG’s office. The main argument they made is that current legislation does not differentiate between potable (such as Fernet, Cynar, etc) and non-potable (aka cocktail) bitters and that “bitters” are included in the list of types of spirituous liquor in the AZ Revised Statutes (ARS).
Sadly, we received their final ruling: we would be required to apply for and receive appropriate licensing for the production and sale of a spirituous liquor or cease operations entirely.
Difficult Decision
There are numerous obstacles and significant costs for us to transition from a flavor extract/food producer to a spirits producer. It was never our intent to become a spirits producer when we started AZBL. We have invested 8 years in building a successful and efficient food production business, and, to become a spirits producer, we would have to start from scratch, on all levels–from finding a production facility that would have to be approved as a distillery, to new labels showing that AZBL is a spirituous liquor, as well as all new models of shipping, selling, gifting, and marketing, not to mention that all of the work we have done to enter the EU market would also come to a close.The DLLC has not, to date, answered any questions we have asked regarding specifics on how the State will now regulate bitters within AZ. We need those answers to determine if there is a viable path to continue. We never envisioned being in the spirits business and therefore, stopped production with no viable path to continue at this time. As far as we understand, cocktail bitters can still be made in-house for on-premise use only.
The End of a Successful Chapter
To say that the last 8 years have been amazing is an understatement. We have been blessed to have met so many wonderfully creative bartenders and bar owners, passionate industry folks and producers, and enthusiastic fellow imbibers throughout AZ, the US, and the world. Starting with Pig & Pickle, every time we saw our bitters on one of your menus, we felt so humbled. We are thankful to all of the home bar enthusiasts that brought a piece of us home with them and shared their creations with our bitters.We are so grateful to those whose commercial kitchens we were fortunate to share, W Rieth & Vanessa Luna, and, most recently, Tracy & Chuck Dempsey. To all of the small business shop owners that put our products on your valuable shelves, we thank you.
And to Young’s Market/RNDC, you all rock! From the early days with Robert, Jason, and Casey, all the way to today, the Craft Spirits Team and Sales Teams were top-notch.
AZBL started as a hobby, a way for us to learn, have fun, and most importantly, spend time together. We never thought about starting a business, or could have ever dreamt what it would turn into. We are proud to have been able to represent the Arizona cocktail industry by having our bitters used in bars and restaurants in Arizona, across the US, and in Australia, France, and New Zealand. Our bitters have been included in four cocktail books and featured in many articles and publications. For a little company without a lot of resources, our bitters had great presence and far reach.
AZBL isn’t over. The end of production for the foreseeable future is just the closing of this chapter. The upside is, with vaccinations and improving numbers, we will now have time to actually visit all of our favorite spots and see all of you, our community, that we have been missing so much over the last year. We will also have more time to get back into R&D at our home, which is where it all started, in our own AZ Bitters Lab. We don’t know what the next step will be, but we do know that we still have that creative spark that got us started all those years ago, and we will see where that light leads us next.
