Distillers in the state of Kentucky are rejoicing after the final passage of the state’s House Bill 500 that will legalize the highly-popular “private barrel selection program” throughout the industry, which in turn will help boost bourbon tourism in the Bluegrass State.
The bill, sponsored by State Rep. Chad McCoy of Bardstown, passed the State Senate March 23rd with a bipartisan vote and will head to Gov. Andy Beshear’s desk for the final checkmark.
It passed the Kentucky House of Representatives earlier this month by a 75-17 vote.
The Kentucky Distillers’ Association applauded the bill’s passage, and KDA President Eric Gregory said in a prepared statement, “House Bill 500 is another bold step in modernizing Kentucky’s archaic alcohol laws and elevating bourbon tourism for consumers, local communities and the Commonwealth.”
In recent months, it was made known that the industry was under a mandate to legalize the popular private barrel selection process, which the Kentucky Department of Alcoholic Beverage Control had said was lacking clear statutory authority. They gave the whiskey industry until April 15th to seek a legislative solution.
Gregory said the deadline motivated all segments of Kentucky’s three-tier system – distillers, wholesalers and retailers – to collaborate and compromise.
“We are all interested in growing the bourbon pie for everyone, especially for consumers and tourists,” he said. “This bill will continue to transform the Kentucky Bourbon Trail experience into a major tourism destination like Napa Valley and Sonoma in California.”
As passed, House Bill 500:
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- Fully authorizes private barrel selection events and requires 70% of private barrels picks to go to retail licensees through the three-tier system, allowing distilleries to sell 30% of barrel picks to private consumers, businesses and non-profit groups.
- Allows distillers to sell exclusive bottles on-site at distillery gift shops. This provision will drive repeat visitors to Kentucky distilleries, meeting consumer demands for unique bottles that they can only get in the Commonwealth.
- Gives each distillery the opportunity to open a satellite tasting room, which will help bring bourbon tourism to downtowns and communities that might not be able to attract a full-blown distillery experience.
- Allows distillers to offer complimentary samples and sell bottles at fairs, festivals and farmer’s markets. Retailers are also allowed to offer free samples and sell bottles of wine and spirits at these same events in the county where they are licensed.
- Legalizes sales of barrel-aged and batched cocktails, a common practice that was not specifically authorized in Kentucky law since the alcohol was not poured from its original container.
For Kentucky, bourbon is a $9-billion economic and tourism engine that generates more than 22,500 jobs with an annual payroll topping $1.2 billion each year, more than $285 million in local and state taxes and $1.8 billion in federal alcohol taxes.
A key export, the industry is currently in the middle of a $5.2 billion building boom, from innovative new tourism experiences to expanded production facilities, bottling centers and aging warehouses, all to meet global demand for Kentucky bourbon.
Kentucky now has more than 10.3 million barrels of bourbon aging in warehouses across the state, the most in its distilling history. Distillers filled more than 2.4 million barrels in 2020 alone, the third year in a row that production topped the two million mark.
Attendance at the KDA’s Kentucky Bourbon Trail and Kentucky Bourbon Trail Craft Tour experiences continue their rebound from COVID and closures, up 160% in total attendance from last year, and just down slightly from the pre-pandemic record in 2019.
Check out www.kybourbon.com and www.kybourbontrail.com for more information.
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