Friday, March 11, 2022

Private barrel selection issue in KY partially resolved through compromise

The Kentucky House of Representatives passed a bill to advance Bourbon tourism and resolve regulatory issues with popular private barrel selection programs after Rep. Chad McCoy negotiated a compromise among key stakeholders.

Two floor amendments settled concerns between the Kentucky Distillers’ Association (KDA), the Wine & Spirits Wholesalers of Kentucky (WSWK), and many liquor store retailers which led to HB500, sponsored by McCoy, R-Bardstown, passing the House after a 75-17 vote.

McCoy noted the compromise ensures restaurants, bars and liquor stores will continue to have access to the overwhelming majority of private barrel selections while allowing a small percentage of gift shop sales for distillery tourism purposes.

Likewise, he said exclusive bottles at distilleries will attract repeat visitors to Kentucky, and satellite tasting rooms will enhance downtowns and local communities around the state that might not have access to a full distillery experience.

“HB500 is the next bold step in advancing Bourbon tourism and attracting repeat visitors to Kentucky just as California leverages its signature wine industry to benefit Napa and Sonoma valleys,” McCoy said.

“I appreciate the willingness of the distillers, wholesalers and several retailers to come together and find common ground that will continue to grow Kentucky Bourbon’s popularity and strengthen all partners and players in our signature industry,” McCoy said.

Offering specific praise to WSWK for coming to the table and negotiating in good faith, McCoy said, “Wholesalers have a vested interest in growing the Bourbon industry and the Kentucky Bourbon Trail® experiences. When we collaborated with that goal in mind, we quickly found common ground. Compromises like this grow the pie for everyone instead of fighting over smaller pieces.”

HB500, as passed by the House, would:

  • Allow distillers to sell exclusive bottles on-site in their distillery gift shop at a limit of 3 liters per person, per day. These bottles could not be sold anywhere else and would not be made available to any wholesaler.
  • Tighten language around satellite tasting rooms to ensure that only a distillery with sampling and souvenir bottle sales may operate an off-site retail location at any wet or moist location in Kentucky.
  • Codify regulations on vintage spirits that limit a consumer to selling 24 packages a year and require licensees to keep records and report all purchases to the ABC prior to selling vintage spirits bottles.
  • Limit a distiller to selling only 30% of its annual allotment of private barrel selections to private consumers directly from the distillery gift shop. All other private barrel selections must go through the three-tier system.

SB160, introduced as an “emergency” act Feb. 10, was the first piece of proposed Kentucky legislation to define private barrel selections. It was unanimously passed by the Senate 30-0 on March 3rd and forwarded to... wait for it... the House Committee on Committees. Seriously, they have a committee whose sole purpose is other committees. 

What's next? Well, we wait for the House to pass SB160 and for the Senate to pass HB500. Then it all goes to the Governor, so it appears all signs are pointing in the right direction. We have finished distilling (introducing the bills), we are currently in the aging process (bills are in the houses) and we are waiting to bottle (for it to be signed into law). Until then, there's not much to do but wait... and sip on some bourbon.





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