Long-sought bill that will allow alcohol shipment passes Kentucky General Assembly

LOUISVILLE, Ky. – For years, Kentucky bourbon distillers, winemakers and breweries have pushed for a change in state law so they can ship goods directly to consumers, in or out of state.

Meanwhile, Kentuckians on vacation have tried to order products such as a case of wine from a California winery only to discover they can't because Kentucky's law makes it a "no ship" state, one of just a few with such restrictions.

Now, concerns about the coronavirus pandemic and its impact on such Kentucky businesses have helped push the law over the finish line.

Last week, the state Senate gave final approval to House Bill 415 to change Kentucky's law to allow direct shipments amid discussion about the many state businesses hurt by the pandemic and how this might help them sell their products — including the signature industry, bourbon.

"Right now, the bourbon tourism industry is flat on its back, closed because of COVID-19," Sen. Damon Thayer, the Republican majority leader, told the Senate. "The same goes for tours of small-farm wineries and our craft brew locations around the state. This will create a new revenue stream for those producers on the other side of this COVID-19 crisis."

Check out: Why are liquor stores exempt from closing during the coronavirus pandemic?

It also represents a new source of revenue from taxes on such products, said Thayer, R-Georgetown.

Several lawmakers who support the bill also praised distilleries throughout Kentucky that have turned to mass producing hand sanitizer for health care providers and public safety workers such as police, EMS staff and firefighters.

"We're in a terrible time, but we have a lot of corporate citizens who have stepped up to aid and assist," said Senate President Robert Stivers, R-Manchester.

Bills to ease restrictions on alcohol have had a tough time winning over conservative lawmakers in the General Assembly, but Whitney Westerfield, R-Hopkinsville, said he was willing to vote for HB 415, in part because distilleries in his district had joined in producing hand sanitizer.

HB 415 passed 21-11.

The change in the law is welcome and much needed, said Ted Mitzlaff, CEO of Goodwood Brewing Co., which has a craft beer brewery and taproom in Louisville and a brewpub in Frankfort.

"It's long overdue," said Mitzlaff, whose company also produces bourbon it finishes in used beer barrels.

The Kentucky Bourbon Trail, a statewide tour of Kentucky's many distilleries and breweries steers many visitors to Goodwood's Louisville operation, Mitzlaff said.

"About 80% of our traffic in the Louisville taproom is from out of town, people here on the Bourbon Trail," he said. "We are constantly asked, 'Can we send a case home?' We’re not allowed to do so."

Meanwhile, Kentucky tourists in other states face the same obstacle, he said.

"If you’ve ever been in California and tried to ship wine back yourself, you can't in Kentucky," he said.

Mitzlaff said the change will help Goodwood promote its business in other states by being able to send samples directly to distributors interested in the product. Current law bars him from direct shipping of such samples, though breweries have been known to send products labeled "yeast samples."

"You can't mail any alcohol directly out of here," he said. "It's crazy."

Mitzlaff said any relief is welcome at a time when he and many other such operations have been forced to cancel tours and close restaurants or pubs because of concerns about the coronavirus spread.

Read more: Bill to expand power of AG over abortion advances in Kentucky Senate over objections

Seventy-five employees at Goodwood's restaurants in Louisville and Frankfort are on furlough, and beer and bourbon sales are down because restaurants and bars are closed statewide under one of several executive orders by Gov. Andy Beshear aimed at limiting exposure to the virus.

While the new law allowing direct shipping won't mean a big increase in revenue, it will help, Mitzlaff said.

"It's a nice benefit," he said. "It’s not going to be significant from a revenue standpoint, but from a marketing branding and customer service standpoint, we're very excited to see the legislation passed."

HB 415 would allow distilleries, wineries and breweries in or outside Kentucky to get a license to ship directly to customers. It does not apply to retail outlets or distributors.

It limits shipments to 10 liters of distilled spirits, 10 cases of wine and 10 cases of malt beverages per month. Such shipments must be clearly marked as alcohol products, and someone over age 21 would have to sign for the product when delivered.

The bill has been sent to Beshear for his signature.

Reach Deborah Yetter at dyetter@courier-journal.com or 502-582-4228. Find her on Twitter at @d_yetter. Support strong local journalism by subscribing today: courier-journal.com/subscribe.