Scotland’s Isle of Islay is known for its distilleries, and construction will begin soon on the island’s 12th distillery near the shores of Laggan Bay. The Islay Boys, Donald MacKenzie and Mackay Smith, plan to build the new Laggan Bay Distillery across from Islay’s airport on the site of a former RAF World War II barracks. MacKenzie and Smith also own the island’s lone brewery, and plan to make Islay Ales part of the Laggan Bay development. We’ll catch up with Donald MacKenzie on this week’s WhiskyCast In-Depth. In the news, Kentucky’s Bourbon community is coming together again to help Read More »
Scotland’s Isle of Islay is known for its distilleries, and construction will begin soon on the island’s 12th distillery near the shores of Laggan Bay. The Islay Boys, Donald MacKenzie and Mackay Smith, plan to build the new Laggan Bay Distillery across from Islay’s airport on the site of a former RAF World War II barracks. MacKenzie and Smith also own the island’s lone brewery, and plan to make Islay Ales part of the Laggan Bay development. We’ll catch up with Donald MacKenzie on this week’s WhiskyCast In-Depth. In the news, Kentucky’s Bourbon community is coming together again to help fellow Kentuckians in need following this month’s floods. We’ll have that story and check in with one distiller affected by the flooding.
January 29, 2022 – Sales of “private selection” barrels by distillers in Kentucky have become popular choices for retailers, bars, restaurants, and even whiskey clubs. However, it turns out that those sales actually violate state liquor regulations in Kentucky, and perhaps even at the federal level. It’s not because sales by the barrel are specifically banned, but because the process of selecting those barrels violates a number of state regulations. Kentucky’s Alcoholic Beverage Control Board enforces the state’s regulations, and has issued an advisory opinion to that effect, according to Kentucky Distillers Association president Eric Gregory. “Right now, the ABC Read More »
January 29, 2022 – Sales of “private selection” barrels by distillers in Kentucky have become popular choices for retailers, bars, restaurants, and even whiskey clubs. However, it turns out that those sales actually violate state liquor regulations in Kentucky, and perhaps even at the federal level. It’s not because sales by the barrel are specifically banned, but because the process of selecting those barrels violates a number of state regulations.
Kentucky’s Alcoholic Beverage Control Board enforces the state’s regulations, and has issued an advisory opinion to that effect, according to Kentucky Distillers Association president Eric Gregory. “Right now, the ABC has given us a grace period, if you will, to work with us while the Legislature is in session to get that fixed,” he said in a telephone interview. “That’s not a want…that’s a need, and we’ve gotta get that done,” he said, citing support from the groups representing liquor wholesalers and retailers for reforms.
The process of selecting a barrel usually involves tasting samples from multiple barrels during a customer’s visit to a distillery, and that is where the legal issues begin to build up. State regulations do not make any difference between “trade” visitors to a distillery and consumer visitors to that distillery’s visitors center, and the regulations limit the amount of samples to 1.75 ounces per visitor per day. In addition, regulations also limit the amount of whiskey an individual customer can buy at a distillery to one nine-liter case per day. Once again, that doesn’t allow for the sale of an entire barrel of whiskey to a single customer, since that barrel could yield 200 bottles or more in what would be counted as a single purchase.
Private barrel selections can be critical for retailers trying to set themselves apart from their competitors. Westport Whiskey & Wine in Louisville has been among the most active participants in private barrel programs with more than 60 barrel picks, and owner Chris Zaborowski says the loss of that opportunity would have a critical impact on his business. “Just to use a conservative number, if that’s around $8,000 a barrel, that’s a fairly impactful number, almost half a million dollars in sales.”
While the Kentucky ABC’s opinion applies only within the Commonwealth, it could have nationwide implications. Not only do Kentucky distillers sell private barrels to customers in other states, but similar restrictions on sampling and sales exist in most of the states with craft distillers. As of now, regulators in other states have not moved to block private barrel selections, but the Kentucky decision could set a precedent.
There is also a potential issue at the federal level as well. Kentucky’s opinion also cited the potential violation of the state’s “tied house” regulations banning distillers from offering anything of value to retailers, based on the exclusive nature of a private selection barrel not available to other retail competitors. In addition, when consumers purchase an entire barrel of whiskey from a distillery, the bottles are shipped through a wholesale distributor to the retailer of the consumer’s choice, and Gregory says that compliance with the “three-tier system” also is seen as a violation of tied house restrictions. Similar bans exist in federal regulations enacted after the end of Prohibition to keep distillers from having undue influence over the retail sector. Gregory indicated that the KDA is working with federal regulators to address the issue.
“It’s not quite a problem in search of a solution, or a solution in search of a problem, it’s just a case of getting the language cleaned up so no one can create a problem,” Zaborowski said. “It’s a point of distinction for us, and to turn that switch off would be devastating for our business,” he said in a telephone interview.
State lawmakers are currently in session at the state Capitol in Frankfort, with the current legislative session scheduled to run through mid-April. “We’re urgently seeking a resolution in the Legislature, and it’s going to have to have an emergency so as soon as it’s signed by the Governor — if we’re fortunate enough to get it passed — it would take effect immediately and we wouldn’t miss a beat on private barrel sales,” Gregory said.
Gregory doesn’t want to think about the alternative.
“It would be a big impact on the distillers, but more importantly, it would be a big impact on retailers and consumers,” he said.
While the needed changes appear to have strong support and would be relatively simple to enact, Zaborowski is reminded of the constant threat that hangs over any piece of proposed legislation: the so-called “Christmas Tree” effect.
“It’s what gets tacked on to an easy bill that could make the bill more difficult,” he said with a laugh. “That’s the only real fear that I have, because Kentucky still has a large percentage of dry counties and a lot of these legislators don’t like dealing with alcohol bills because, you know…it’s sinful.”
Kentucky ABC executive director Allyson Taylor could not be reached for comment. This story will be updated with more information as necessary.
The massive tornado that ripped through Western Kentucky overnight on December 10, 2021 caused tremendous losses. But, as Kentuckians have shown throughout history, we’re resilient, and as distillers and bourbon fans have also shown, we answer the call. In fact, the Kentucky Distillers’ Association…
The massive tornado that ripped through Western Kentucky overnight on December 10, 2021 caused tremendous losses. But, as Kentuckians have shown throughout history, we’re resilient, and as distillers and bourbon fans have also shown, we answer the call. In fact, the Kentucky Distillers’ Association and the Bourbon Crusaders set a new bar for fundraising.
The morning after the storms, KDA president Eric Gregory was on the phone with me, Fred Minnick, the Bourbon Crusaders, and all Kentucky distillers (not just KDA member distilleries) to begin planning how we could help with relief efforts.
Within only a few days, the KDA had secured incredible once-in-a-lifetime donations from Kentucky’s signature distilleries, the Bourbon Crusaders had lined up donations of epic “unicorn” bottles from members and friends, and Fred Minnick mobilized his resources to present what would become the largest charitable bourbon auction ever—The Kentucky Bourbon Benefit.
Over a four-day period, the Kentucky Bourbon Benefit listed about 100 new auction items per day, ending with 429 items. Bidding began immediately, with over five thousand total bidders, ending with a live auction of the top items on December 21 at Westport Whiskey & Wine in Louisville. By the following morning as final bids were tallied and donations were still coming in, the Kentucky Bourbon Benefit had raised about $3.5 million for tornado relief efforts, which will all go to Governor Andy Beshear’s Team Western Kentucky Tornado Relief Fund.
The top two items were exclusive barrel experiences donated by Willett and Four Roses. The Willett barrel experience—a 19-year-old barrel selection—sold for $401,001, which set the individual barrel record ever, and Willett doubled it the next morning when the second-place bidder agreed to pay the winning bid price. Similarly, the Four Roses experience, which offered a barrel between 17 and 24 years, sold for an astounding $278,000, and Four Roses doubled its donation too, so the second-place bidder increased his bid to net $556,000 for the Four Roses barrels.
Both Four Roses and Willett donated other rare bottles and barrels to the Kentucky Bourbon Benefit, so that just from the generosity of these two distilleries, Western Kentuckians will receive over $1.7 million.
Other distillery partners like Brown-Forman/Woodford Reserve, Heaven Hill, Maker’s Mark, Angel’s Envy, New Riff, Michter’s, Rabbit Hole, and Castle & Key, among others, all made remarkable donations that raked in never-before-seen bidding. And individual donors like Chris Morris, of Brown-Forman, and Larry Kass, retired from Heaven Hill, donated bottles that are impossible to find anywhere. Only one major distillery did its own auction, but individuals affiliated with that distillery made generous donations on their own.
The Kentucky Bourbon Benefit also included 14 bottles from Carr’s Steakhouse in Mayfield, Kentucky, which was devastated by the storm. While Carr’s was demolished, 14 bottles of bourbon survived and were added to the auction, most with matching funds from KDA-member distilleries, Independent Stave Company, Vendome Copper & Brass Works, and the Kentucky Travel Industry Association.
KDA President Eric Gregory said, “The outpouring of support, care and love for Western Kentuckians is truly unparalleled in the history of Bourbon. We are forever grateful for the generosity of distillers, donors and bidders.” Bourbon Crusaders President RJ Sargent added, “The response was tremendous, far beyond our wildest hopes. Our members pulled out treasures from their collections and the community responded enthusiastically.”
Bourbon enthusiasts across the country proved again that it’s not just about the bourbon.
**You can still donate to the official Kentucky relief site here: https://secure.kentucky.gov/formservices/Finance/WKYRelief or to the Bourbon Crusaders, a 501(c)(3) charitable organization. If you donate to the official fund, please designate “Kentucky Bourbon Benefit” in the “Fundraising Event” field.
