Small Farm Winery Law to Impact Local Businesses

The future of Kentucky’s small farm wineries was set into motion at, of all places, a local barbecue contest right outside of Bowling Green.

The contest took place in Rockfield, at Derrick Huff’s Traveler’s Cellar Winery, to raise money for a veterans nonprofit. Sen. Mike Wilson, R-Bowling Green, was a judge. The pair connected on their shared Marines history and kept in touch.

While the legislature had previously passed a law allowing small farm wineries to produce as much as 500,000 gallons annually, Wilson said he realized while talking to Huff that wineries were facing another obstacle to success – they couldn’t self-distribute their product.

In most states, there is a three-tier system for alcohol distribution, established after Prohibition was repealed. The first tier, alcohol producers or importers, have to go through the second tier, wholesale distributors, to get their product to the third tier, retailers. Retailers then sell the product to consumers.

Without distributors, producers were limited to directly selling their alcohol in-house in tasting rooms or at events like fairs and festivals.

“Besides selling at their own places, they really had no option,” Wilson said.

This session, Wilson introduced Senate Bill 28, which allows small farm wineries to self-distribute up to 12,000 gallons of wine annually.

After negotiations with wholesaler groups, the bill passed and was signed into law by Gov. Andy Beshear on March 17. It took effect immediately.

The inability to self-distribute had become a problem for many of Kentucky’s small farm wineries, which are concentrated in rural areas.

In order to get their wine on store shelves, Huff said small farm wineries like his had to convince distributors it was worth it to come out to grab a few bottles or cases.

“It just wasn’t cost-effective for retailers,” said Huff, who is the vice president of the Kentucky Wineries Association.



Source: bgdailynews.com