Bulk Wine Sales to Estate Distilleries Approved by Nevada Lawmakers

A new Nevada law will permit estate distilleries to purchase bulk alcohol products from the state’s wineries or craft brewers, for the purpose of distilling or blending. Senate Bill 345 passed after lawmakers were persuaded that it would not erode Nevada’s three-tier system of alcohol distribution.

Proponents were also able to soothe wholesalers’ concerns by amending the bill to require products from Nevada brew pubs and wineries, with preference given to transactions involving a wholesaler. If the brewery or winery does not have a relationship with a wholesaler, they may transfer the product directly.

The law requires bulk wine purchased by the distillers to contain 25 percent Nevada-grown fruit. One industry insider who did not wish to be named noted that it sets the stage for a tighter supply of grapes in an already small universe of providers.

Others see the law as a stimulus measure for Nevada farming.

“Seems to work in everyone’s favor,” said Bill Loken, who became a viticulture evangelist when he was proprietor of Pahrump Valley Winery, persuading farmers across the state to embrace grapes. “Anything that promotes demand for Nevada fruit is good for the growers and good for Nevada wine over all.”

Winemakers are weighing whether the new law creates a good business opportunity.

“It could,” said Alynn Delisle, co-owner of Nevada Sunset Winery. “Depending on the price estate distilleries are willing to pay for bulk wine.”

The industry will have to sort out the the statute’s references to Nevada fruit content, which may preclude some wineries from participation. The provision authorizing distillers to use wine as a blending ingredient invokes a 25 percent Nevada fruit quota already in the state’s winery statute since 2015.

Only wineries licensed after October 1, 2015 have to comply with the quota, which is tied to their annual output. It’s unclear whether Senate Bill 345 permits all of the state’s wineries to sell bulk wine to the distillers, so long as it contains 25 percent Nevada fruit, or whether only the wineries licensed after 2015 can participate. Grape Basin News was unable to immediately get clarification.

All of the wineries required to comply with the quota have yet to produce 1,000 cases annually, the number that would trigger it. The plain language of the law suggests they would nonetheless have to meet the quota to sell existing product or produce wine specifically for the estate distilleries.

Nevada’s two estate distilleries are Bentley Heritage, in Minden, and Frey Ranch Estate Distillery in Fallon. Nevada statute defines an estate distillery as one that grows 85 percent of its agricultural raw materials on its own land. Bentley Heritage was the proponent of Senate Bill 345.