Kentucky distillers ask lawmakers for relief from burdensome regulations

09/11/2015 04:26 PM

NEWPORT – Kentucky bourbon distillers want a level playing field when it comes to selling or offering samples of their products at their own facilities.

Some of the state’s regulations apply only to distillers and not breweries or wineries, and distillery leaders say that is hampering their businesses.

Examples include distilleries being limited to sample sizes of no more than 1 oz. per day, while breweries and wineries limits are 16 oz. and 6 oz. respectively. Distilleries are also limited to sell on their premise no more than 3 liters per day while breweries can sell up to a half keg per day and wineries are unlimited.

Distilleries are also prohibited from serving their products by the drink.

Kristin Meadors, Director of Governmental and Regulatory Affairs, Kentucky Distillers’ Association, says that 85 percent of the visitors who take the Kentucky Bourbon Trail are from out of state, and have certain expectations of what they want when they tour a Kentucky distillery.

“Most tourists, when they come to Kentucky are expecting to have some type of Napa Valley-like experience,” Meadors said. “When you go to Napa, you are able to have a full culinary experience. You’re able to have a full flight of their wonderful wines and sit down and enjoy it and pairing it with their wonderful food.”

Meadors, who testified before the Interim Joint Committee on Licensing and Occupations at the New Riff Distillery on Friday in Newport, says the current regulations are costing distillery owners financially.

“Our distilleries have told us that 40 percent of visitors will go and try to purchase more than 3 liters per day,” Meadors said. “So someone walks to the register, they have their credit card out and they want to buy more than 3 liters and we tell them no, I’m sorry, please put you credit card away, we can’t accept your money.”

Currently, 95 percent of bourbon produced in the nation comes from Kentucky.

However, other states have made moves in an attempt to wrestle some of that market share away.

Rhode Island permanently exempted wine and spirits from its 7 percent sales tax. Colorado enacted legislation to allow distillery pubs. New York increased marketing funds, and allowed distillery restaurants and sales by the drink, while Washington state dropped all limits on sales, allowed distilleries to participate in special events and raised production rates. The state went from zero distilleries in 2005 to currently having 110.

Ken Lewis, President and owner of New Riff Distillery, says that it’s imperative the legislature act now or risk seeing the bourbon industry fall in the state.

“We can’t take our bourbon industry for granted, we have to modernize,” Lewis said. “Many states allow craft distilleries to sell at least their own products by the drink. We’re standing right in a beautiful event space, and yet I could not sell you a mixed drink with my own products.”

Lewis says distillers are asking for no money from Frankfort, just the same set of rules that apply to wineries and breweries across the state.

It’s estimated that the average Kentucky Bourbon tourist spends nearly $1,000 during their trip.


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