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Bill targets craft brewery package beer sales

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FRANKFORT, Ky. (Feb. 27, 2018) – A Senate committee approved a bill today that would increase the cap on package beer sales at Kentucky’s breweries.

Rep. Adam Koenig, R-Erlanger, said the measure, known as House Bill 136, would increase the cap on on-premise package sales to 31 gallons, which equals two kegs, while still limiting the number of cases sold to three.

A second provision would allow craft brewers to start sending their wholesale tax payments directly to the Kentucky Department of Revenue, said Koenig, who testified in support of HB 136 before the Senate Licensing, Occupations and Administrative Regulations Committee. Craft brewers currently pay their wholesale taxes to their distributor who keeps 1 percent before forwarding the rest of the money to revenue department.

“House Bill 136 is vital to the continued growth of Kentucky’s hard-working microbreweries,” said Adam Watson of the Kentucky Guild of Brewers. “Our industry sector is growing. We have invested close to $79 million and employ over 600 Kentuckians. Most of this growth, almost all of it, has occurred in the last five years.”

Kentucky craft brews are sold in more than 6,700 retail locations across Kentucky, 40 states and 25 countries, he said.

“While it does not remove the arbitrary and unnecessary barrier holding us back from our potential, it does offer improvements in addressing the needs of our growing craft brewers,” said Watson, whose guild initially sought the removal of the cap.

Majority Floor Leader Sen. Damon Thayer, R-Georgetown, called HB 136 a good first step but said he would eventually like to see the cap eliminated.

“I’ve learned after 15 years in this body that old Rolling Stones’ song, ‘You Can’t Always Get What You Want,’” he said.

Majority Caucus Chair Sen. Dan “Malano” Seum, R-Fairdale, said while SB 136 may not be perfect, he appreciated the compromise that was reached between craft brewers and the distributors and retailers.

“I have craft brewers in my Senate district, and I have a good friend who owns an independent beer distributor,” he said. “I didn’t want to see either one of them hurt. My advice was you get together and compromise on the bill and we will do our best to pass the bill as you agreed upon.”

SB 136 now goes to the full Senate for further consideration.

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