Liquor Law Changes for Cincinnati Microdistillery
In June '08, Ohio's governor signed a bill changing the way spirits have been sold in Ohio since 1933.
Effective in September, Woodstone Creek Winery & Distillery can sell their artisan spirits directly
to the public at their microdistillery in Cincinnati. Since the end of Prohibition, only state licensed liquor agencies
have sold full proof spirits.
The new law limits sales to a distiller's premise. A distiller is defined as the maker of the spirit from grain.
Tasting will not be permitted, although it was a primary consideration in the original legislation.
The distiller believes fee based tastings would boost state revenues much the same way as wine and beer
tastings at state licensed outlets. However, without support from the state liquor stores, the proposal failed.
The spirits will be available at a limited number of Cincinnati state liquor stores. Woodstone
will not be able to wholesale to liquor stores, bars and restaurants - that right is retained by state agencies.
One permit can be issued per population density over 400,000 - limiting the state to a few permits in the
counties which surround Cleveland , Columbus and Cincinnati. The distiller had requested family wineries be
allowed to sell brandy on-site, but that was also over-ruled.
Woodstone Creek first changed liquor regulations in 1999 when the distiller, Don Outterson, worked with
authorities to originate the microdistillery permit for Ohio. Outterson designed a potstill and began to make
brandy from excess wine. He also started barreling grain distillate for aging.
In 2006, Outterson's first retail spirit, a vodka, helped familiarize him with how the Ohio liquor control system would
work for an artisan distillery. Restricted to selling through the state warehouse to retailers, he soon
learned those retailers were not receptive to his concept. As the smallest profit takers in the system, the
retailers preferred less expensive, mass marketed brands. The state, itself, showed a bias to volume producers
with lower prices, pricey advertising and sales reps. Unable to compete with mass produced spirits on
price and marketing, it was easier and more profitable for Outterson to sell his artisan distillates in Chicago and
New York with a broader consumer base for rare spirits and less reseller bias. Woodstone Creek needed to be
able to sell onsite or export it's products out of Ohio. Relief came when Woodstone's vodka was internationally
rated by the Beverage Testing Institute in Chicago. It's published praises attracted the attention of Heidleberg
Distributing in Kentucky. Accessibility to tastings in Kentucky changed Woodstone's saleability
across the river in Cincinnati.
In spring of 2008, the Outtersons approached Senator William Seitz with a proposal for legislation. The distiller
provided copies of more liberal laws in Indiana, West Virginia, Michigan and Kentucky to Columbus lawmakers.
Outterson also presented a petition signed by his tasting room customers who would have purchased a bottle
at the distillery had they been given the opportunity. The intent behind the petition was to make it clear to
lawmakers that Woodstone's customers, wanted to buy spirits on-site instead of making an additional stop at a
liquor store. But, another segment of lost revenue came from "alco-tourists" who had heard of Woodstone from
the internet, The Wall Street Journal and The New York Times. Completely unaware of Ohio's strict liquor laws,
many came long distances expecting tours and tastings. The lost tourism dollars far exceeded Woodstone Creek
sales made from state stores.
The only opposition to the proposal came from Paramount Distillery, a rectifying plant in Clevelend whose
specialty is low proof grocery store brands. Paramount declared no interest in tourism and claimed it was
protecting employee jobs. It's interesting to note that Paramount's low-proof products do not participate in
the state's enforced warehousing of full-proof spirits. The dilute spirits are also taxed at a much lower rate.
Woodstone maintained that Paramount's business model was neither helped nor hurt by the new proposal.
However, throughout the process, Paramount maintained a lobbyist in Columbus to defend it's position - the
Outterson's, not having the resources to do likewise, returned to Cincinnati.
Nationwide, microdistillation is the newest growth segment in tourism which began with microbreweries 20 years
ago. America can't seem to get enough craft beer, wine and spirits. In 2004, the newly formed American Distiller's
Institute listed 50 microdistilleries. In 2008, the list had expanded to 220, with a concentration in the most liberal
states of California and Oregon .
Woodstone Creek wants to remain a regional distiller. The owners have no aspirations for major growth, with one
exception - Outterson wants to increase his distilling time when he retires from his day job. His production over
over 10 years is only 30 barrels. Woodstone Creek handmade premium spirits will always have limited
availability. The Outtersons hand-bottled 23 cases of bourbon on the Fourth of July '08 to mark the historic
change in the law. It debuted at the Party Source, Bellevue, KY on August 21st. Soon after it was "Spirit of the
Week".
Woodstone Creek Bourbon is the first made in Ohio since record keeping began in 1933.
Sales in Kentucky have exceeded expectations, but the smaller prices are attracting Cincinnati buyers.
Woodstone will not be able to advertise because of their small inventory. Instead, Woodstone will depend on
word-of-mouth referrals. Other distillates to be released over the next two years include gin, rum,
single malt whiskey, brandy, honey liqueur and a bierschnapps made from Barrelhouse Red Legg Ale. Their first
barrels are reaching the 10 year mark. Future bottling is projected to be two barrels of aged spirit per year.
Clear spirits will continue to be made on demand.
Woodstone Creek Cincinnati Vodka received a "Highly Recommended" rating by the prestigious Beverage Testing
Institute during an international review held in Chicago, Oct '07. Another honor came when Jim Murray,
author of the Whisky Bible (2009 edition rating 92!) sampled a five year old Woodstone single malt whisky at
the American Distiller's Institute Competition of '08. As a professional brewmaster, Outterson has
won gold, silver and bronze at Great American Beer Festival. His wines have also garnered national and
international medals, including Taster's Guild, Indy and Finger Lakes Internationals.
In 1851, Cincinnati boasted 33 distilleries making 1100 barrels of whisky a week, supplying the entire region.
Historical records indicate the whisky trade was more important to Cincinnati than the breweries or it's
famous pigs. As a river port, Cincinnati was also a critical link in the Bourbon Trail. From the first settlers, Ohio saw
small family distilleries in every town. A brief internet search revealed a list of 100 distilleries that closed prior to
1865. Woodstone Creek uses the same production methods and techniques common to that era.
Bourbon and Vodka distributed by Heidelberg in Kentucky,
Vodka distributed by Hoosier Wine & Spirits in Indiana
Vodka Schmodka - Below Zero Blind Tasting
Distill Life, Cincinnati Magazine
Beverage Testing Institute Review
BuyCincy Features Woodstone Creek
Cincinnati Locavore / Woodstone Creek
American Distillers Institute - Micro professional association
Farmyard Stills Quench a Thirst for Local Spirits - New York Times