Bill would ease restrictions on craft distilleries

Nevada Sen. James Settelmeyer, R-Minden, on March 4, 2015. (Cathleen Allison/Las Vegas Review-Journal)

CARSON CITY — Boutique distilleries that tout “grain to glass” spirits want to be able to sell more bottles directly to consumers, a move opposed by distributors who say allowing too many direct sales would upset Nevada’s wholesale and taxing protections.

Senate Bill 246, sponsored by Republican state Sens. James Settelmeyer of Minden and Don Gustavson of Sparks, would allow craft distilleries to increase exports to other states to 60,000 cases per year, up from 20,000. In-state sales would remain the same, capped at 10,000 cases.

Additionally, the bill would allow craft distilleries to offer tastings and sales at one other location off the premises where the liquor is made and allow direct sales of one case per day per person.

Existing law limits direct sales to two bottles per person per month and restricts one person’s tasting quantity to two fluid ounces. The bill would do away with shot restrictions.

Craft distilleries are in their infancy in Nevada, which currently has five — one in southern Nevada and four in the north. Combined they produced about 400 cases last year, according to testimony Monday before the Senate Committee on Commerce, Labor and Energy, though others said the amount produced was much higher.

Proponents said the bill is needed for small distilleries to be able to market their products of gin, vodka, rum and whiskey and develop a following.

“Our end goal is to create a high-quality product we can distribute nationally … and put Nevada on the map,” said Colby Frey of Frey Ranch Estate Distillery in Fallon.

Outside the hearing, Colby gave the example of an Oregon couple who visited the distillery and wanted to purchase a case to take home.

Under current law, they were only allowed to buy four bottles to adhere to the two-per-person-per-month mandate.

The distillery uses Nevada-grown grains.

Bently Heritage, another estate distillery, plans on using rye, wheat and barley grown on Bently Ranch in Carson Valley to make its spirits.

Alfredo Alonso, a lawyer representing Southern Nevada Wine and Spirits, said expanding craft distillery direct sales would blur the line between boutique distillers and distilleries like Jim Beam and Jack Daniels.

He added that wholesale distributors even the playing field for big and small makers and ensure proper tax collections.

Chris Shanks, co-owner of The Depot, a craft distillery in Reno, said direct sales allows the company to reap more profit per bottle, giving them more revenue to reinvest in the operation.

No action was taken on the bill and amendments were pending.

Contact Sandra Chereb at schereb@reviewjournal.com or 775-687-3901. Find her on Twitter: @SandraChereb.