Distiller magazine

Distiller_Fall 2015

Distiller magazine a publication of the American Distilling Institute, the Voice of Artisan Distilling; devoted to the craft spirits industry: vendors and distillers alike.

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Page 26 of 139

FALL 2015 distiller 27 E ighty-two years ago, when Prohibition was repealed, laws treated distilleries as industrial factories producing goods for a national market, not as local producers of artisan spirits. Laws establishing the three-tier and state control distribution systems after repeal did not take into consideration that small-scale distillers would want to sell spirits direct to consumers in their local market. At the time, there was no real reason for states to consider such a thing. Both before and after prohibi- tion, the distilling industry experienced a period of significant consolidation. It wasn't until 1982, nearly half a century after prohibition's repeal, that Jörg Rupf and Hubert Germain-Robin (together with Ansley Coale) founded the first two micro-distilleries and inaugurated the craft-distilling renaissance. Until recently, most new craft distilleries were built without tasting rooms because state laws prohibited small distillers from offering samples or selling spirits direct to consumers. However, as the number of small distilleries has continued to grow and consumers have demanded greater freedom to interact with producers, state laws have begun to change. Distillers of all sizes know—and state legislators have started to realize—that allowing consumers direct access to taste and buy spirits from the source increases more than just a distillery's profitability. Tasting rooms selling samples, bottles and even cocktails made with their spirits has a multiplier effect that spreads through local and state economies. Although the current national boom in the popularity of bourbon has been good for Kentucky, distillery tourism in the Bluegrass State has had a significant and positive impact on the state's econ- omy. In 1999, the Kentucky Distillers' Association (KDA) founded the Kentucky Bourbon Trail with six distill- eries. Today the tour has nine heritage distilleries and another nine distilleries on the Kentucky Bourbon Trail Craft Tour. Visitors are allowed to sample bourbon and purchase bottles. e Kentucky Bourbon Trail drew 627,032 individual visits to member distilleries, and the Craft Tour an additional 96,471 visits in 2014. In the economic impact report released in 2014, KDA estimates that 73% of the visitors on the trail come to Kentucky specifically to visit distilleries. Based on the approximately 15,000 visitors that turned in their passports annually, KDA estimates that bourbon tourism generated more than $5 million in lodging, transportation, meals and other purchases. Out of that, about $615,000 went to state and local governments in the form of sales taxes, lodging taxes, income taxes and payroll taxes. at $5 million also supports about 104 jobs state wide, for a total increase in economic activity of $7.5 million. With individual distilleries on the Craft Tour reporting estimates of 20,000 visitors annually, it is likely the overall economic impact is far greater. In New York State, distillery tourism is growing in popularity and the eco- nomic benefits are reaching far beyond the money tourists spend on lodging, transportation and meals. In 2007, New York passed the Farm Distillery Act, which allowed small-scale distillers to produce 35,000 gallons of liquor per year, offer three samples of their spirits, and sell bottles directly to consumers as long as at least 50% of the agricultural products used to make the spirits were grown in New York. is law opened the door for distillery tourism and similar economic benefits in lodging, transportation, meals and other retail purchases seen in Kentucky. However, by tying the law to the use of state- grown agricultural products, the eco- nomic effects of distillery tourism have DISTILLERY TOURISM RISE Big Benefits for Local Communities BY ERIC ZANDONA ON THE

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