Legally buying bottle of rare bourbon may get harder under Kentucky alcohol bill

Buying a bottle of rare (but not old) bottle of Kentucky bourbon may get a little harder under a bill sent to Gov. Andy Beshear that reforms the Vintage Distilled Spirits law.

The legislation, House Bill 429, closes loopholes that created a thriving but legally questionable market in highly sought-after bourbons including Weller and Blanton’s.

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Beshear’s office has not indicated whether the governor supports or opposes the change to Kentucky’s alcohol sales. He could sign it, allow it to become law without action or veto the bill. The legislature could attempt to override a veto when lawmakers return in April.

The bill, filed by Rep. Matt Koch, R-Paris, makes it illegal for a store to buy more than 24 “packages” or bottles from a single seller in a year and makes it illegal for an individual to sell more than 24 bottles in a year.

What does that mean for those looking to buy highly sought-after brands like Eagle Rare and Pappy Van Winkle?

Those expensive premium bourbons generally are available from regular distributors only in very limited amounts if at all. Some retailers turned to private sellers to stock bottles they couldn’t get elsewhere, but this legislation is likely to reduce the supply from “flippers” because they won’t be able to sell large-scale bulk quantities any more.

Sellers who violate those provisions faces stiff fines: $500 for a first offense, $2,500 for a second offense and $5,000 for the third and each subsequent offense.

For retailers, repeated violations would be Class A misdemeanors, punishable by up to 12 months in jail, up to $500 in fines and loss of Kentucky alcohol licenses.

Each store will have to obtain a $300 Vintage Distilled Spirits retailer license and will have to report to Kentucky Alcohol Beverage Control monthly what they have bought, from whom and the running total of purchases from that person.

Koch said at a Feb. 7 hearing on the bill that the original Vintage Distilled Spirits legislation passed in 2018 “created an unregulated fourth tier in the alcohol industry. ... People were selling thousands of bottles and turning this into this whole industry.”

In 2023, the Herald-Leader analyzed Vintage Distilled Spirits sales reported to the Kentucky ABC and found some individuals sold hundreds of bottles to retailers over the five years since the Vintage Distilled Spirits Act was passed.

One man sold five cases of Weller Special Reserve, a case of Weller Antique 107 and half a case of Weller Full Proof in May 2021 to one store in one visit. Then came back in June with four more cases of Weller Special Reserve.

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Another sold at least 22 times in 18 months, bringing Blanton’s, Weller, E.H. Taylor, Eagle Rare, Old Rip Van Winkle, Pappy Van Winkle and similar sought-after brands to the same Lexington store. In a six-month stretch, he sold almost 600 bottles, including 40 bottles of Blanton’s in one March 2022 trip.

Blanton’s, Weller, Pappy Van Winkle and other premium Kentucky bourbons are popular purchases with bourbon tourists, thousands of whom come to the state every year to visit distilleries and take home drinkable souvenirs. Many of those bottles come from “flippers” who scoop them up at Buffalo Trace Distillery in Frankfort or buy them out of state.

Stores like Bourbon Creek in Fayette Mall in Lexington do a brisk business in such bottles. Co-owner Mark Thomas told the Herald-Leader last year that the stores provide a service for a convenience fee.

“If you do it responsibly, then yes it can be a great opportunity for business and customers,” Thomas said. “But you have to take it upon yourself to comply. A lot of stores get lazy or don’t do it properly, and ABC investigators have a lot bigger fish to fry.”

Asked how the new legislation might impact his store now, Thomas said via text: “It won’t really impact us too much. We’ll just buy rare bourbon from other liquor stores now instead.”

Another store owner, Brian Dickens, owner of The Barrel Market at The Summit at Fritz Farm, complained that the legislation adds yet another licensing requirement.

“The number of licenses required to sell alcohol is a burden. I have to have a license to sell a bottle of liquor, I have to have an additional license to sell a drink of liquor. If I want to sell a drink on Sunday I need an additional license If I want to sell a bottle of liquor on Sunday I need an additional license, and I have to wait a few additional hours before I can sell the bottle after I can sell a drink,” he said via email. “Now they want to require an additional license to sell a vintage bottle? This doesn’t even take it to account selling beer. A license I don’t have. I have each license with the state of Kentucky and the city of Lexington.

“I have one drivers license. I can drive anytime of the day, and any day of the week. I have one marriage license, it is good 24 hours a day, 7 days a week. Does a Dr. or a plumber need a license to practice on Sunday?”

Shannon Smith, co-founder of Revival Vintage Spirits & Bottle Shop in Covington, said that the $300 license is the only change for “those that have been compliant” with existing law.

“The legislation actually primarily impacts unlicensed, private sellers and implements repercussions for violations,” she said.

The owners of Justins’ House of Bourbon in Lexington and Louisville, did not respond to a request for comment on how the bill will impact their business. In January 2023, the Kentucky Alcohol Beverage Control agents raided the stores in Kentucky and seized hundreds of bottles, which ABC contends are “associated with suspected improper purchasing and sale of these products,” some of which were being shipped to a Washington, D.C., warehouse that was also raided.

Kentucky ABC is seeking to revoke Justins’ House of Bourbon’s license and shut down the vintage retailer, alleging numerous purchasing and shipping violations.

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Justins’ House of Bourbon connection to proposed new legislation

The 2024 reform bill also requires the ABC to tell an alcohol seller why bottles were seized within 14 days or return them, an issue that has come up in the Justins’ House of Bourbon case.

The vintage retailer sued the ABC in Franklin Circuit Court after the state agency took more than six months to file a notice of violations after seizing more than 600 bottles from two stores. The ABC case and the lawsuit are still pending.

Under the revisions, a licensee may request a hearing before the ABC board to determine if the seizure was justified and may appeal a ruling in the Circuit Court of the county where the seizure occurred.

Other alcohol-related changes in Kentucky bourbon bill

The bill makes some additional changes including:

▪ Expands the number of liquor retailer licenses available in Lexington;

▪ Allows riverboats with 40 or more passengers to serve alcohol;

▪ Requires age-verification for alcohol deliveries.

▪ Lets the Kentucky ABC auction off bottles that have been seized, rather than destroying them, after the cases are over, with the proceeds going to an expanded alcohol wellness and responsibility education fund.