Distilleries that helped out in the beginning of the coronavirus pandemic by making alcohol-based hand sanitizer won’t have to pay a hefty fee the government charged them this week by mistake.
When hand sanitizer was in short supply in March, hundreds of distilleries jumped in and made it themselves. In order to do so, they had to register as drug makers, which have to pay user fees every year to the government.
Earlier this week, the US Food and Drug Administration, an agency within the Department of Health and Human Services, charged each of the distilleries a $15,000 fee, according to a senior HHS official.
But the department rescinded that fee on Thursday, claiming it was charged to distilleries by mistake.
“Small businesses who stepped up to fight Covid-19 should be applauded by their government, not taxed for doing so. I’m pleased to announce we have directed FDA to cease enforcement of these arbitrary, surprise user fees,” Brian Harrison, HHS’ chief of staff, said in a statement.
“Happy New Year, distilleries, and cheers to you for helping keep us safe!” he added.
Harrison said the distilleries were charged “by mistake” and that the fees were not cleared by HHS leadership.
“Many of these are rather small business, craft distilleries, and their business and livelihoods were damaged when restaurants closed down,” he said. “But they jumped into the fray and joined the fight against Covid. It was nothing short of heroic. They are American heroes.”
As the pandemic set in earlier this year, hand sanitizer supply dropped as people stocked up on it to try to ward off the coronavirus.
To meet the increase in demand, some distillers began using the alcohol in their facilities to create their own alcohol-based solutions. Some packaged it in small bottles, while others encouraged people to bring in their own containers for refills.
“Due to the recent reports of outages and low supply in our community, We have decided to provide hand sanitizer free of charge to anyone in need. Made with aloe vera gel and 95% ethanol,” one such company, Old Fourth Distillery in Atlanta, said at the time.
CORRECTION: An earlier version of this story and headline mischaracterized the type of payments the government had charged distilleries as fines. They were facing fees.