New state law opens door to more distilleries in county

May. 11, 2013 @ 12:50 PM

A newly rewritten state law that allowed for additional alcohol distilleries to sell their product on site in Gatlinburg could also pave the way for similar operations in other Sevier County locations.

The state Alcoholic Beverage Commission has already received applications from entities in Pigeon Forge and Pittman Center as well as Gatlinburg.

Keith Bell, interim director of the ABC, confirmed Friday that the commission has applications from a group he said was with the Hatfield & McCoy Dinner Theatre in Pigeon Forge. However, officials there said the application came from employees with the theater and not from the theater or its ownership, Fee Hedrick Family Entertainment.

Ole Smoky Moonshine, which has operations in Gatlinburg, has applied for a location in Pittman Center, Bell said, and as expected, Sugarlands Distilling Co., partially owned by local developer Ned Vickers, has an application for a site in Gatlinburg. As of Friday morning, there were no applications for any site in Sevierville, unincorporated parts of Sevier County or any other place in Gatlinburg.

The Mountain Press began exploring the matter after a caller asked this week about new distillery applications in the county. The distillery law, approved by the Legislature this year, has nothing to do with the liquor by the drink referendum, which was held in Pigeon Forge two months ago.

The new law hasn’t taken effect yet, so the applications appear to fall under the guidelines of the existing law, which would allow them to set up distilleries but not sell their product on site.

While Bell mentioned the Hatfield & McCoy facility, a spokesperson for Fee Hedrick said the application didn’t come from them. “We have not applied for a distillery license,” Debbie Newsome said. “Two individuals who work for our company, Leslie and Mark Thomas, applied for a license.”

Leslie Thomas, who is a senior vice president with Fee Hedrick, said she and her husband applied because they perceived a growing market for moonshine.

“Being in Pigeon Forge and seeing the success of moonshine products, with The History Channel doing shows on the moonshiners, it’s just a cultural thing that’s happening right now,” she said. “Since the distillery in Gatlinburg is here, and I hear another is coming, this could be like the Napa Valley of moonshine.”

She said they don’t have any definite plans, but wanted to make sure they had the opportunity.

Joe Baker, co-owner of Ole Smoky, said their current plans for the Pittman Center facility call for it to be used for bottling.

“At this point we’re building it as a manufacturing facility but the law allows for the sale wherever you make it so I guess that’s at least a possibility.”

He also acknowledged the business was considering the possibility of expanding to other areas of the county under the guidelines of the new law.

Sugarlands had actually lobbied for the bill because it overrules local ordinances governing distance requirements between distilleries, allowing the company to set up in its desired location near Ole Smoky on the Parkway.

The bill had been covered in The Mountain Press because of its potential impact in Gatlinburg. The Press had also noted that the bill as originally written would allow distilleries to sell liquor in unincorporated portions of any county, “if any jurisdiction located within such county has approved retail package sales through referendum of voters and any jurisdiction located within such county has approved consumption of alcoholic beverages on the premises through referendum of voters.”

Gatlinburg already allowed distilleries to sell their product on site, but an amendment to the bill, one which The Mountain press did not become aware of until this week, added Sevierville and Pigeon Forge. It also allows distilleries in towns of less than 1,000 people and even in unincorporated areas of counties.

“Additionally, this amendment authorizes the manufacture ... in a municipality that is authorized under present law regarding premier type tourist resorts to allow facilities or establishments in such municipality to sell alcoholic beverages or wine for on premises consumption.”That covers Sevierville and Pigeon Forge.

The law gives an opportunity for cities and counties to opt out after it is passed. It is not as clear what happens when a business or person applies between when it was passed and when it takes effect. The new law is set to take effect July 1. It provides a 45-day window — no person can file a notification of intent to manufacture booze with their local government for the first 45 days after that. In the meantime, counties and most affected cities would have the chance to pass a resolution to essentially opt out of the law.

The law says the option to opt out can be exercised “until a written notification is filed with the county mayor by any person as an official notice that the person intends to pursue all lawful avenues to manufacture intoxicating liquors or intoxicating drinks, or both (inside the jurisdiction). Once the notice is filed, no action may be taken (by the government) unless such interest is withdrawn or the person’s application to manufacture such intoxicating liquors or intoxicating drinks, or both, is denied by the state or federal government.”

It isn’t clear how those options would apply to Sevierville, Pigeon Forge or Pittman Center, because the three are part of the amendment, and it isn’t clear how the new applications might impact them. Officials at the office of state Sen. Bill Ketron, R-Murfreesboro, weren’t able to answer that question Friday, and neither were officials with the ABC, which was relocating to new offices Friday.

Pigeon Forge Mayor David Wear said he would urge the city to opt out, and said he told legislators he thought it was a bad bill while it as still under consideration. He indicated he hopes to see the City Commission opt out if it still has the chance to do so.

He stressed that selling off-premises liquor in distilleries is unrelated to the city’s recent referendum approving the sale of liquor by the drink at restaurants.

“Liquor by the drink didn’t open the door for this,” he said. “The state law allowed this before and the new bill changes the retail portion of this.”

Local state representatives Dale Carr and Andy Farmer voted against the bill. Sen. Doug Overbey didn’t vote on the final bill.

Pittman Center Mayor Glenn Cardwell said he was aware of the planned Ole Smoky facility, but said he understood that it was meant as a storage facility and he believes his Board of Mayor and Aldermen will opt out.

“We will never allow the sale as long as I’m here,” he said.

Sevierville Mayor Bryan Atchley said the city hasn’t been approached about the matter and hasn’t considered what it will do yet. County Mayor Larry Waters said he would have to review the law before deciding what he would present to County Commission.

Asked how he viewed the prospect of competition, Baker said he hopes to see the industry grow but said he hopes some of the newcomers look at distilling other spirits.

“We’ve got an area that has a long history of making spirits so it’s good to see growth in the industry and I think as long as it’s done in a responsible family friendly way it will be a positive impact on the area. I think, my hope is that as new distilleries pop up that people try to bring a unique and creative approach to what’s being done so that it shines a positive light on the industry,” he said.

Vickers said he believes there will be a lot of initial interest, but many would-be competitors will find that the application process is too arduous.

“It’s a very involved application process because you have a very detailed state application in addition to a very detailed federal application.”

n jfarrell@themountainpress.com