As bourbon booms in the bluegrass distillers' assoc. seeks additional tweaks to the laws

09/30/2014 03:13 PM

Bourbon producers around the state continue to announce new ventures and expansions totaling hundreds of millions in infrastructure and bringing with it new jobs and more tax revenue, and the Kentucky Distillers’ Association says the future will continue to be bright for Kentucky bourbon, but by tweaking some hospitality laws the industry could soon become the Napa Valley of the South.

In September alone several distillery’s announced new locations and additions on to their already existing gift centers designed to bring in and handle a larger bourbon audience.

With major investments in the bourbon arena Eric Gregory, the President of the Kentucky Distillers’ Association, says bourbon producers are anticipating a windfall of bourbon appreciation in the future.

“They’re predicting a very bright future or else they wouldn’t be spending these tens of millions – even hundreds of millions of dollars in investments — to put back a product that won’t mature and be bottled five or 10 or even 12 years,” Gregory said.

Every two-years the University of Louisville produces an economic impact study for the bourbon industry for the distillers’ association — the 2014 study results were so good Gregory said they had to be triple checked.

“When their numbers came back this year, a few weeks ago on a preliminary basis, we didn’t believe them. It’s gotten so big we actually said are you sure these are correct,” Gregory said. “I think you’ll see us doubling our job production in Kentucky. You’re going to see the tax revenue go up almost 100 percent as well.”

That full economic report is due out soon, but the 2012 study had been heralded as the return to the golden age of bourbon distilling with more than 9,000 jobs created through the industry and $125 million in taxes going to state and local governments.

The industry draws in millions of dollars in out-of-state dollars through bourbon tourism in part driven by the Kentucky Bourbon Trail, a string of eight of the state’s distillery’s stretching from Louisville to Lexington.

That tourism could eventually lead east into Appalachia, Gregory said. Bourbon industry representatives spoke at a recent SOAR summit designed to help craft a plan to get the economy of Eastern Kentucky back on its feet.

“The first thing we’ve got to do is those counties are going to have to go wet,” Gregory said, indicating most of the Eastern part of the state does not allow alcohol sales, and thus are “dry” counties.

Gregory said there has been a major interest in the area, and he thinks that part of the state is primed to take off.

“We held a work shop with the distilled spirits epicenter earlier this year in Louisville…that’s an educational distillery and they’re training distillers from all around the world, and the great thing is when they come here for training we hook ‘em we try to get them to locate here,” Gregory said. “There were 40 people from Eastern Kentucky that came in wanting to start a distillery.”

“We think that’s fertile ground for distilling and they’ve got a great heritage there as well — adventure tourism and things it is the perfect scenario.”

In the 2014 legislative session lawmakers approved and the governor signed into law tax breaks on bourbon aging in the state which Gregory said was welcomed. There are some additional changes in statute that can help the industry grow, Gregory said.

“Most of our distilleries now have four and five different brands, so increasing the sample size just a little bit will allow them to taste more,” Gregory said.

As the industry blooms there are also distillery’s seeking opportunities in the hospitality industry.

If not already, Gregory said, “we’re the next Napa Valley.”


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