The small batch Germain Robin brandy poured at Selden Standard is considered among the best produced in the U.S., and the Detroit restaurant is among the few in the city that sells it.
Evan Hansen, co-owner of Selden, which this week was named an outstanding restaurant semifinalist for the 2024 James Beard Awards, said it’s “hard not to respect” the company’s “elegant” brandy made with “time-honored but difficult techniques.”
But after these bottles are gone, Michigan law will make it illegal for Selden and Michiganders to buy. The state requires spirit producers to sell a minimum number of bottles of liquor here each year. Germain Robin and countless other rare, small batch liquors have failed to meet that threshold. If minimums are not met, the Michigan Liquor Control Commission (LCC) bans the product.
Restaurateurs and about a dozen industry experts told BridgeDetroit that the rules are an anchor on Detroit’s still nascent high-end restaurants and bars. Demand for craft and rare liquors is reshaping bar menus across the country and restaurants in big cities are creating destinations for residents and tourists with products that Michigan barkeeps cannot access.
Thoughtful bar programs, or curated drink selections, are an essential part of a vibrant and cutting edge restaurant scene that can put a city on the national culinary map and Michigan’s limits are “very frustrating,” said Travis Fourmont, owner of Detroit’s Bar Pigalle, a high-end French restaurant and bar on John R.
“It’s not that we don’t want to and we don’t have the know-how,” he said. “[Restaurateurs] in Detroit know spirits as well as the top dogs in New York and Chicago – we just can’t get the product.”
Critics view the rules as even more questionable in the context of Gov. Gretchen Whitmer’s push to attract more young people, who, relative to older folks, have more of a preference for the products affected. While the rules are in place for all of the state, many say impacted bars and restaurants are concentrated in Detroit.
Germain Robin’s California alembic holds a hint of apple and ages seven years in Limousin oak barrels that impart strong caramel notes. It fetches $22 per pour, while some small batch liquors at Selden cost as much as $80. The financial loss may be negligible since customers will likely opt for other liquors that are in stock, but restaurateurs say the consumer experience takes a hit.
At least three brandies Selden stocks have been “delisted” by the state. Hansen said he and other restaurateurs are in talks about whether to raise the issue with the LCC and state representatives.
“If there’s a product I want and there are only eight other bars in town that also can use it, but we all really want it – why shouldn’t we be able to get it?” Hansen asked.
A ‘control’ state
The LCC restrictions are largely in place because managing hundreds or thousands of rare products for a small number of businesses is an unwieldy task for the state, David Marvin, an LCC administrator, told Bridge.
Marvin said the state has licensed 12,000 products, and “we can’t cater to a small number of brands.”
“If it’s only going to sell at one or two bars, the commission has to make a decision to make sure we have enough capacity to deal with the vast majority of what people are buying,” Marvin said. “We have to have some limits in place.”
The situation stems from Michigan operating as a “control” state, meaning the LCC effectively has a monopoly on liquor sales. It buys booze, marks it up about 65% and sells it to authorized distributors who then sell to bars, restaurants and stores. Michigan is one of 18 control states nationwide, and the system was established after Prohibition in 1933.
One bar owner characterized the LCC as “a giant party store,” and it does good business – over $2 billion in gross sales last year, Marvin said. The LCC contributed $494 million in net revenue to the state in 2019, the last financial report available on its website that did not include years impacted by the pandemic. The excess money goes to the state’s general fund and is budgeted to state services by the governor and Legislature, Marvin noted.
The rules say producers who sell a product for less than $50 must sell at least 144 bottles across a two-year rolling period. If the product retails between $50-$249, like Germain Robin, then six bottles must be sold to remain eligible. If the companies don’t sell that much, then the product is “delisted.”
Hansen noted California-based liquor company, Tempus Fugit, which makes sought after components for cocktails, like creme de cacao, or liqueur de violettes, had its products delisted here because they did not sell the minimum 144 bottles, so Michigan’s bartenders can no longer access them.
The LCC previously required producers to sell above the minimum in a one-year period, but made an amendment in September to give restaurateurs more flexibility, Marvin said. The regulations were loosened because COVID-19 caused supply chain problems that made it difficult for liquor companies to sell.
The LCC is open to working with restaurants and bars as much as possible, Marvin added. The state allows brands that have been delisted to relist after a year. It’s some more paperwork, but the licensing fees are relatively low, he said. That process is still viewed as onerous for small companies that can instead sell their product in states that do not require as many regulatory hoops and fees.
Even with relaxed regulations, difficulties persist and some suppliers won’t do business here. Among those, California-based importer and distributor Sacred Thirst Selections, which sells wine in Michigan, because no minimums exist. But Sacred Thirst will not sell its spirits here because of the regulatory hassle, co-owner Tucker Madey told Bridge.
The company distributes in about 20 “small market” states, like Michigan, and none have minimums, Madey said, though other states have different onerous regulations that make distribution difficult.
Among Sacred Thirsts’ Michigan wine clients is Ann Arbor’s Spencer, a 2023 James Beard finalist for outstanding wine program. The awards are considered the Oscars of the restaurant industry and Michigan nominations for cocktail bars are rare, with none making it past the semifinals.
For customers who want to try new products, the difference between menus in Michigan and places elsewhere in the country is noticeable, said Jaime Lutzo. She splits her time living in Detroit and New Orleans and, while here, frequents places like Bar Pigalle and Selden Standard. The difference is also apparent on store shelves, she added.
“There’s not the variety that you see in other states and it makes Detroit less exciting,” Lutzo said.
Leonard Lopp, a liquor sales rep in southeast Michigan, said a brokerage firm he worked for a few years ago suddenly could not sell about half the products in its stock because it did not meet the minimums. The loss was “deflating” for the company and bars that could no longer access the products, Lopp said.
“It leaves us with all the major companies, when, as we grow as a scene, it only makes sense to have smaller brands,” he said.
But Marvin said keeping an inventory of every spirit restaurateurs want would increase administrative costs and divert tax revenue now used for “building roads and paying for schools and so on.”
Still, critics argue the rules are a relic of a different era, and the idea of stifling business to raise money for the state is “messed up,” Bar Pigalle’s Fourmont said.
“It’s not about a better product or doing the right thing – it’s about the money and the bandwidth,” Fourmont said.
The LLC in Michigan is antiquated and should be abolished. There is no need for for all the ‘administration’ or restrictions on what can be sold/imported to the state. More efficient systems exist and are in use elsewhere.
Unfortunately making the LLC smaller and more efficient would mean a bureaucrat would loose some ‘power’ and we can’t have that….
Agreed — the LCC needs to go.
That’s a dumb rule but brandy is trash, I won’t miss it