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COVID-19 ISO Insights

Sanitizer Supply Chain Gets a Hand from Liquor Industry

April 6, 2020

By: Christopher Sirota, CPCU

The Centers for Disease Control and Prevention (CDC)has been advising the public to wash their hands with soap or to use sanitizer to prevent against becoming infected with COVID-19. And it seems many Americans have been listening, at least with respect to the sanitizer: according to The Hill, about 49 percent of Americans are stocking up on hand sanitizers.

So much so, that suppliers have reportedly had trouble meeting this surge in demand, as evidenced by a March 3rd article in Quartz that listed Amazon, Walmart, and Target as sold out of hand sanitizer at the time of writing. Quartz noted that "Amazon’s inability to keep up with the demand is particularly worrisome. The ecommerce giant’s ability to tap into its vast network of fulfillment and distribution centers normally gives it an edge over physical storefronts."

Now, the Wall Street Journal has reported that some distillers are attempting to re-purpose their alcohol supply to manufacture hand sanitizer in order to mitigate the shortage.

Normally, such companies might face some regulatory hurdles before changing products. However, according to the article, to support this trend, and potentially boost the supply, two government agencies that oversee these sectors have reportedly decided to relax some regulatory activities which might otherwise have become an obstacle to such efforts. Per the article:

In the U.S., the Food and Drug Administration regulates production of sanitizer and generally requires the product be inspected before it is sold to the public. […] The Alcohol and Tobacco Tax and Trade Bureau has exempted spirits companies from getting authorization typically required to manufacture hand sanitizer. The FDA said last week that it wouldn’t take action against any company that produces alcohol-based hand sanitizers for use by consumers or health-care personnel.

Before this regulatory change in attitude, some distillers were reportedly attempting workarounds, for example, by not labeling the product as a sanitizer but as a hand wash with alcohol; others reportedly tried to donate the product rather than sell it.

The New York Times also reported that even one of the world's largest brewers has decided to make hand sanitizer and donate it to the American Red Cross for distribution to areas that most need it.

Other companies in this sector may follow: according to the Times:

an industry survey suggested that three-fourths of the nation’s 2,000 craft distilleries were considering making sanitizer as a way to help health care workers, law enforcement officials and the general public.

Of note, per the Times, although some of these companies may have ample amounts of alcohol, apparently some have found difficulty obtaining plastic containers to fill with the sanitizer liquid.

Additionally, the Journal added that a company in an unrelated business sector also wanted to help: a toy manufacturer plans to make sanitizer with machines it normally would use to fill containers with glues and children's art "slime."

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