Last night, Kentucky House Representative Chad McCoy introduced HB 500 to save private barrel selections and create new revenue streams for distillers, such as satellite tasting rooms and distillery-only bottle releases.

HB 500 is the second piece of proposed Kentucky legalization to define private barrel selections. SB 160 was introduced as an “emergency” act Feb. 10.

Private barrel selections are when groups select their own barrel that is bottled and then sold through a retailer. That barrel is bottled exclusively for the club, retailer or whoever is picking it. However, the past year, Kentucky’s alcohol regulatory arm — the ABC –has presented doubt as to whether this process is legal under the current law. For example,  Kentucky ABC states: “a distillery shall not provide more than one and three-fourths (1- ¾ ) ounces of samples per visitor.” All barrel picks violate this sample size, and a barrel is not a legal package to sample from. While other issues are at hand, the big one is that private barrel picks violate tied-house state and federal laws, which keep alcohol manufacturers from exerting undue influence over retailers.

McCoy’s bill and SB 160 aim to change that. SB 160 brings forth narrow definitions of private barrels, while HB 500 is a deeper dive into the matter and adds to the consumer convenience of purchasing a barrel. Instead of purchasing from a retailer, consumers can buy the barrel directly from the distiller. Not every distillery has distribution in all states and this can eliminate waiting for club picks that can take up to six months.

In addition, McCoy’s bill possibly creates the next wave of bourbon tourism — satellite tasting rooms and distillery-only releases. These give tourists reasons to come back to the Kentucky Bourbon Trail. Instead of viewing Kentucky bourbon experiences as a one-time only bucket list, tourists will no doubt return to buy bourbon only available in Kentucky and the likes of Northern Kentucky could build a whole new district of tasting rooms featuring distillers from all over the state.

Amend KRS 241.010 to define “barrel-aged and batched cocktails,” “private selection event,” and “private selection package” and to redefine “consumer” and “vintage distilled spirit”; create a new section of KRS Chapter 243 to establish a “limited nonquota package license” that allows designated alcoholic beverage drink licensees to sell vintage distilled spirits and private selection packages; amend KRS 243.027 to authorize a manufacturer to ship samples to persons or entities engaged in private selection events; indicate that the shipped sample quantity limits apply to each separate recipient; amend KRS 243.029 to require a direct shipper licensee to include all applicable taxes in the selling price for alcoholic beverages; include sales tax as a separate item on the customer’s invoice; amend KRS 243.030 to set a $300 annual fee for a limited nonquota package license and for an off-premises retail sales outlet license; amend KRS 243.0305 to allow a distiller to conduct private selection events and sell private selection packages at retail; set package and sample limits for sales at fairs, festivals, and other similar types of events; permit distillers to purchase jointly branded souvenir packages from microbreweries; restrict a distiller to only one off-premises retail site for each of its licensed premises; amend KRS 243.110 to make a limited nonquota package license compatible with listed drink licenses; amend KRS 243.232 to authorize a limited nonquota package license holder to sell vintage distilled spirits; amend KRS 243.240 to exclude private selection package sales from the normal quota retail package license restrictions; amend KRS 243.260 to issue a special temporary license for farmers markets; amend KRS 243.884 to exempt most private selection package sales from the wholesale tax; amend KRS 244.240 to exclude a distiller selling private selection packages or supplying barrels for barred-aged and batched cocktails from the interlocking interests prohibition; amend KRS 244.260 to permit a retailer to keep distilled spirits or wine in a container for preparing barred-aged and batched cocktails; align distilled spirit container limits with the largest applicable federal standard of fill size; amend KRS 243.034 and 243.0341 to conform.

HB 500, introduced Feb. 14 by Kentucky Rep. Chad McCoy

However, Wine & Spirits Wholesalers of Kentucky said: “By all accounts, the current process that respects the three-tier system works well and, if anything, should be codified. The months-long delay in receiving a barrel has nothing to do with the current process in Kentucky.” See the full comments from the Wholesalers.

Eric Gregory, president of the Kentucky Distillers’ Association, says this is not meant to cut out the wholesalers, adding that this is how the wine industry operates. Gregory says the distillery-only bottles are meant to bring Kentucky Bourbon Trail visitors back for experimental bottles and one offs.

Meanwhile, the legislative process will work itself out. If the votes don’t go the way of SB 160 or HB 500, and there’s no private barrel definitions, private barrel selections could very well go away in Kentucky.

Note: I will update this story and post additional blog posts about this subject.