- Associated Press - Tuesday, January 12, 2016

FRANKFORT, Ky. (AP) - Bourbon tourists taking in the sights and smells of Kentucky distilleries could start sipping cocktails as part of the experience if a bill that cleared a legislative panel on Tuesday becomes state law.

The measure would allow distilleries in wet territories to offer by-the-drink sales to visitors. It also would let the distilleries sell more of their whiskey and offer slightly larger amounts of free samples.

The bill - which also would allow expanded production for small farm wineries and microbreweries - was advanced by the Senate Licensing, Occupations and Administrative Regulations Committee.

The measure could be put on a fast track in the Senate.

Senate Majority Leader Damon Thayer, a key co-sponsor, said it could be voted on in coming days. If the Senate passes it, the bill would go to the House, where similar legislation died last year.



Supporters said the changes would make Kentucky’s distilleries even more appealing.

“They want to have an experience they can savor and relax and enjoy,” said Eric Gregory, president of the Kentucky Distillers’ Association. “We can’t realize our full potential until we have some of these reforms in place to offer things like by-the-drink cocktails and expanded bottle sales.”

Bourbon tourism has matured into a huge business. The number of visits to Kentucky’s distilleries, both large and small, has doubled in the past five years and is closing in on 1 million per year, he said.

The bill would let adult visitors purchase up to 9 liters of liquor at distillery gift shops in wet territories, up from the current 3-liter limit.

It also would expand sample sizes. Currently, adult visitors can get up to 1 ounce of samples at each distillery in wet territories. The bill would increase the amount to 1.75 ounces per stop. That compares to sample-size limits of 6 ounces at wineries and 16 ounces at breweries, the bill’s supporters said.

Those proposals stirred criticism from some in the liquor business.

Jason Underwood, a lobbyist representing liquor producer Sazerac, whose many brands include Buffalo Trace, said increasing bottle sales at distilleries would cause a hardship for some liquor stores.

“It won’t put us out of business, but it will hurt us,” said Bardstown liquor store owner Guthrie McKay.

McKay, whose store is in the heart of Kentucky bourbon country, said retailers already are having trouble stocking some specialty brands being sold at distilleries.

Kevin Smith, an executive for Beam Suntory Inc., whose brands include Jim Beam and Maker’s Mark, said distilleries aren’t in business to compete with liquor stores. Distillery gift shops largely cater to out-of-state visitors, who are unlikely to stop at local liquor stores, he said.

Thayer predicted that no retailer would be put out of business if the bill becomes law. But he said bourbon tourists “want to be able to buy the products that they’re sampling” at distilleries.

Underwood also raised concerns about increasing sample amounts for adults taking distillery tours.

He said: “1.75 ounces of spirits, if you’re going to multiple distilleries, can be significant. If you’re driving yourself, we’re concerned about those issues on the roads.”

The bill also would allow local-option precincts elections for voters to decide whether to allow liquor sales in an area that includes a distillery.

The state’s bourbon sector is in the midst of a $1.3 billion investment boom that could grow as demand increases, Gregory has said. The expansion includes new and expanded distilleries, warehouses, bottling operations and tourism centers.

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The legislation is Senate Bill 11.

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