Buying a business can be tricky. Especially an alcohol beverage business.
Dan Hughes and associates learned that the hard way when the State of Vermont issued a cease-and-desist order to St. Johnsbury Distillery, Barnet, formerly known as Dunc’s Mill.
“We were under the impression that we could use and continue to operate under Duncan’s permits (the business was begun by Duncan Holoday) as long as we filed within a 30-day period from closing,” Hughes said. “Because of the name change, I guess that’s not true.”
Skyler Genest, who heads compliance and enforcement for the Vermont Department of Liquor Control, said he was made aware the purchasers hadn’t obtained the permit from the Alcohol & Tobacco Tax & Trade Bureau.
Genest said he confirmed with TTB that the new entity, St. Johnsbury Distillery, had not officially obtained their authorization from the TTB to manufacture spirits. Vermont doesn’t grant state licenses until federal permits have been granted, he said. He said the business was informed that they could not operate until the issue was resolved.
Neither federal permits or state licenses are transferable, he said, adding it has been more than 30 days since the sale took place.
Genest said, “I authored a cease and desist order that they were not licensed by the state nor were they permitted to manufacture alcohol by the feds,” and if they continued to manufacture they would face criminal or regulatory penalty, he said.
Genest said, “We can sympathize with them, and had they reached out to us in the early stages of their business plan … I think we would have walked them through the process and avoided this timing.”
“Here we are, we’re sitting on all our Christmas orders and we can’t ship,” said Hughes, who told the Caledonian Record the news on Friday was “devastating.”
Hughes said, “I understand rules and regulations. I guess my question is, if we are applying for permits and doing everything we can, why can’t we continue doing business? Nothing has changed but the name. If we didn’t apply for the permits or we did something wrong, I can understand a cease and desist.”
“A cease and desist from the State of Vermont a week before Christmas is devastating,” he said. “We bought the business on November 10th full of enthusiasm and now we cannot produce or sell anything until this is settled. One would have thought we could have worked through this and secured our Christmas orders before shutting us down. It’s very frustrating.”
“As soon as they get their federal authorization, there is very little standing in the way of their state license,” Genest told the Caledonian Record.
A spokesman for TTB said he couldn’t comment on the incident, but noted that changes in ownership and control require a new permit and it is illegal to engage in the business without an approved permit.