Alabama has a new “Cottage Law” that went into effect on June 1, 2014. The law allows food producers to bake and sell goods from their homes. Food producers using this new law are limited to $20,000 per year of revenue, and are required to take a food safety course; however, their home kitchens are not inspected by the health department, and I fear that this law will harm existing small businesses.
The law was intended to help farmers and others who wanted to sell baked goods at farmer’s markets and similar venues. Let me preface my argument against this new law by saying, I do, of course, support farmers, and I have no problem with people selling baked goods at farmer’s markets. My problem is not with vendors selling at markets, but rather with people who will try to operate a full-time bake-from-home business by skirting the rules and regulations that other business owners have been forced to comply with. A law allowing people to bake from home for markets, is a little different than a law that allows people to operate a full-time business selling things from their home without meeting the standards that existing businesses have had to meet.
You should know that I used to own and operate a small bakery. I oversaw the build out of a commercial kitchen in a leased retail space. The city required that I add multiple grease interceptors to my build-out plans (even though I produced no grease—I didn’t even have a stove, just commercial ovens) at the cost of thousands of extra dollars. Our small bakery grossed over $100,000/year (well over the new cottage-law limit). Our bakery was regularly inspected by the county health department, and paid sales taxes to the city, state, and county. I say this only so you will know that I have some experience with the subject, but that I may also be slightly biased.
The first problem I have with the new Cottage Law is that home-based businesses do not have to meet the same health standards as commercial businesses. This means that the food you get as a consumer may not be safe. The health department routinely checks commercial bakeries, like the one that I owned and operated for over two years, to ensure, among other things, that refrigerated food products are kept at safe temperatures, that dry goods are stored in a safe environment that is free from rodents and pests, and that utensils and work surfaces are clean and sterile. All employees of bakeries are required to have food handling training. Of course, you would hope that the cottage-baker you buy from washes her hands, keeps her eggs cold, and keeps her kitchen free of rodents, pests, and pet hair, but without regular inspections from the healthy department there is no way to be certain.
The second problem I have with the new Cottage Law is that it could potentially harm existing commercial bakeries, and may even be harmful to a municipality’s tax structure. I fear that cottage-based businesses will take business away from established commercial bakeries, especially small ones that are usually family owned and operated. Less business for those bakeries also means less tax revenue for the cities and counties in which they operate. With a $20,000 annual revenue limit, it is possible that these cottage-bakers will accept cash payments that they will not report as revenue to the appropriate tax commissioners thus hurting not only established bakeries, but also the local economy.
I encourage all Alabamians to support locally owned and operated commercial businesses, especially bakeries.
One last note about bakeries: I will always be willing to pay a little more for a cake baked-from-scratch, and crafted with talent from a local, commercial bakery instead of a mix-based, or frozen cake, covered in artificially-flavored, corn-syrup based frosting from a big-box store. I encourage you to find a locally owned bakery, and ask them if they bake-from-scratch. I am a firm believer that quality and craftsmanship trump low costs.
Click here, or on the picture if you’d like to see some of my favorite projects from my days running my little bakery.