Illegal Alcohol Production Breaking Into the United States?

Unlicensed Distiller Sentenced to Jail for Killing Three People and also the Justice Department Files Appeal to the 5^th Circuit in the Challenge to Home Distilling Ban

The World Health Organization (WHO) has noted that over 25% of the alcohol in the world is “unrecorded alcohol” meaning it is illegally produced and not taxed and regulated. This unrecorded alcohol includes counterfeit and poisonous alcohol.  The United States has avoided this global problem due to its comprehensive system of state alcohol regulation.  The Center for Alcohol Policy has previously studied the issue of fake alcohol and produced a study showing how the American system of licensed suppliers, licensed wholesalers, and licensed retailers prevent fake alcohol in the American market.  

However, two recent news items are important for those interested in preventing the WHO concerns from spreading to the United States.   The first was the news last week by the Treasury’s Alcohol and Tax Trade Bureau (TTB) and the U.S. Attorney’s Office in Indiana announcing the sentencing of an Indiana man for operating an illegal, unregistered still that he used to produce alcohol containing toxic levels of methanol that killed at least three people.  In its press release, the US Attorney noted that the defendant “illegally distilled the alcohol through a distilling apparatus not registered with the federal government. The final product that Zeedyk sold to customers contained toxic high levels of methanol—approximately 30% to 45% methanol.” The defendant was sentenced to 48 months in jail and assessed monetary penalties over $100,000.

In its press release, the TTB noted that the defendants  “used an unregistered still to illegally produce a product that contained toxic levels of methanol and resulted in the deaths of at least three customers. The product, which was marketed as pure, non-denatured, food-grade grain ethanol distilled from 100% corn was, in fact, sourced from the remnants of denatured industrial alcohol shipments from Lake Michigan barges.”

Meanwhile, the Justice Department recently filed an appeal to the decision by a district court decision in Texas striking the law passed in 1868 banning home distilling.  In its opening brief, the DOJ argues that the law is a Necessary and Proper Exercise of the Congress’s Tax Power.  The DOJ also argues that the plaintiffs do not have standing to pursue this case. There will be additional briefing by the parties in this case.

The concerns of fake or illegally produced alcohol poisoning Americans is no longer abstract as the Indiana case shows.  A fake alcohol scare hit the Czech Republic in 2012 and killed 51 people and caused hundreds of millions of dollars of economic harm to that nation’s alcohol industry.   I truly hope the United States is not moving backwards on protection of the American consumer and regulated alcohol industry and applaud the TTB/ DOJ for enforcing the law.