The Franklin News/Post
Franklin, VA

​RICHMOND A major legislative change to Virginia's liquor laws is reshaping how Virginia bar-restaurant hybrids do business.

House Bill 975 took effect July 1, replacing decades-old food-to-beverage sales requirements that determined whether restaurants could keep their mixed-beverage licenses. 

For hospitality businesses that rely more on cocktail sales than dinner service, losing a mixed-beverage license could effectively put them out of business. 

Supporters say the law doesn't make it easier to open bars. Instead, it gives hospitality businesses with more complex operating models greater flexibility by no longer forcing them to fit the financial profile of a traditional sit-down restaurant. 

What was the food-to-beverage ratio that governed Virginia's liquor laws? 

Before HB 975, restaurants and caterers with mixed-beverage licenses had to show that at least 45% of monthly sales came from food and nonalcoholic beverages, while mixed drinks could not exceed 55% of total monthly sales. 

The requirement traces its roots to Virginia's post-Prohibition liquor laws and had remained largely unchanged since the 1980s. Owners of more complex hospitality businesses explained that the old liquor laws forced money-wasting business decisions simply to meet the 45% minimum on food sales, while capping liquor sales they needed to make to stay in business. 

Natalie McNamara is CEO and managing partner of Harry's at Hofheimer in Scott's Addition. The three-story, 14,000-square-foot venue combines a restaurant, bars, private event space and a rooftop with its own bar that draws large crowds during warmer months. While customers may come for dinner, an event or rooftop cocktails, Virginia's previous rules evaluated the business like a traditional restaurant. 

That became a problem two years ago when Harry's failed Virginia ABC's annual Mixed Beverage Annual Review, or MBAR, partly because of a reporting error and partly because its business model didn't produce the required food-to-beverage sales ratio. 

Each year, Virginia ABC uses the MBAR to determine whether mixed-beverage licensees comply with the required sales ratios. A failed review could ultimately jeopardize a business's mixed-beverage license. 

"I was failing it because I have a very complicated business," McNamara said. "I'm being compared to a typical restaurant when I'm a three-story building and a destination that people come to to have a drink on the rooftop." 

In her case, the MBAR was forcing the restaurant to discount food so it could sell enough to meet the minimum sales requirement. 

One example, she said, was selling late-night pizza on the rooftop not because customers were asking for it, but because the business needed additional food sales. 

"Last year, one of my strategies was to sell pizzas on the roof when it got a little bit later and people didn't want to eat. We still needed to serve food, though, and I lost so much money on labor and cost of goods to serve that stupid pizza. It wasn't a good business decision, but I had to make these types of decisions just to appease ABC and this old bill," she said. 

How the new food-to-beverage ratio works 

HB 975 changes that system. 

Rather than applying one standard to nearly every restaurant, the law creates different requirements based on a business's average monthly food sales. 

Businesses averaging at least $48,000 in monthly food sales no longer have to meet a food-to-beverage ratio, and the cap on mixed-beverage sales is eliminated. 

Those averaging at least $25,000 but less than $48,000 must maintain a 30% food-to-70% liquor sales ratio. 

Those averaging at least $4,000 but less than $25,000 generally remain under the existing 45%-food-to-55% liquor ratio, although some smaller venues may qualify for the 30% standard. 

The bill also requires restaurants to maintain at least as many table seats as counter seats. 

Eric Terry, president of the Virginia Restaurant Lodging and Travel Association (VRLTA), said, "VRLTA supported the legislation this year as the fundamentals of the restaurant industry have changed dramatically. Alcohol consumption is down significantly and with the rise of fast-casual restaurants, many offer spirits-based drinks to patrons. In addition, many of our select service hotels were having issues with the MBAR ratio as well. As Virginia's Restaurant and Lodging Association for over 75 years, we represent all businesses, not just a few who want to stifle competition." 

For smaller operators, the shift brings relief rather than reinvention. 

"We've already built our business around managing those food-to-drink ratios, so HB 975 doesn't really force us to change how we operate day to day," Kevin Liu, owner of The Jasper, a cocktail bar in Carytown, said. "What it does is take away that yearly anxiety of being off by a fraction of a percent and facing big consequences." 

For McNamara, the change means operations can better reflect how customers actually use the space instead of being built around fear of an annual compliance calculation. 

Mike Byrne is the director of operations at the Tobacco Company Restaurant and the director of the Richmond Restaurant Association. He is against the new laws. He said, "What you're taking is a very healthy industry that is being challenged by the cost of food, and by the cost of labor, and you're eliminating a lot of that overhead for the bar operator who doesn't have to have that staff and that investment." 

Complaints about the old ratio rule, and HB 975 

Supporters of the change argue the former rule pushed restaurants into costly, inefficient behavior. 

Owners could feel compelled to expand menus, staff kitchens or design specials around compliance rather than customer demand. 

McNamara framed the old system bluntly: "Now, I can make decisions based on what is good for my business and to keep my employees employed not just to meet some law." 

HB 975, she said, gives operators more control over drink-heavy nights, events and programming without the same fear that one annual review could shut down the business. 

Critics, however, have questioned whether loosening the ratio could change the business model by blurring the lines between bars and restaurants. 

Byrne said, "eliminating the ratio [changes] the model. If I don't have to worry about the ratio, then I open up a bar and I serve sandwiches, pizza, I serve food for two or three hours, and then I shut down, and I'm just a bar until close." 

He continued, saying, "Bubba opens a bar from 10 p.m. until 2 a.m., and didn't have any of that overhead, so the guy who has the restaurant with the inventory, the staff and the training now has to charge more to pay his bills. He's at a distinct disadvantage because the bar-only operator is operating on probably 8% payroll, whereas the restaurant operator is working on a margin of maybe 35% to 40% payroll." 

Tommy Herbert, director of government affairs for the VRLTA, said, "Mr. Byrne has raised these concerns before, but the idea that an operator could average $48,000 per month in food sales by selling pizzas or sandwiches for a few hours a day is simply not in the realm of reality." 

Does Virginia ABC plan to track bill's impact? 

Virginia ABC remains central to the new system. 

Virginia ABC will continue overseeing annual compliance reviews under the new law. It also must study how the revised standards affect food sales and compliance, then report its findings to the General Assembly by Nov. 1, 2027. 

Byrne feels that the new law will shift Virginia from a restaurant-centered cocktail model to a bar-heavy landscape, giving low-overhead bars an edge and putting full-service, food-focused restaurants under more economic pressure. 

McNamara believes much of the debate surrounding HB 975 stems from misunderstandings about what the law actually does. 

"When you get all these people that don't actually understand the bill, they start having assumptions and beliefs, and opinions that aren't correct." 

Beginning July 1, restaurants will start finding out what the law changes in practice. For operators like McNamara, the answer isn't whether they can sell more alcohol it's whether they can make business decisions based on customers instead of compliance formulas.

By: WTVR CBS 6 Web Staff 
Posted July 10, 2026
RICHMOND, Va. — A handful of new alcohol-related laws went into effect on July 1 in Virginia. The Virginia Alcoholic Beverage Control Authority (ABC) provided the following list of new laws and a brief description of their impact:
Store Tastings and Products: HB 385, which will go into effect July 1, 2026, will allow Virginia ABC staff to conduct tastings as part of organized tasting events at our stores. Prior to this legislation, only suppliers could conduct tastings at our stores. In addition, HB 385 clarifies existing law that allows Virginia ABC to sell products that are used in connection with distilled spirits beyond simply garnishes or items approved by the Virginia Tourism Corporation.


Distilleries Selling Spirits for On-premises Consumption: SB 424, which will go into effect July 1, 2026, doubles the volume of spirits a distillery - which sells spirits as an agent of Virginia ABC - may sell and serve to a customer. The approved amount increased from three to six ounces of spirits per customer per day for consumption on the premises. Distilleries making on-premises spirits sales will be required to have food reasonably available for patrons, although such food could come from food trucks or the patrons themselves.
MBAR Ratio Requirements Modified: HB 975, which will go into effect July 1, 2026, leaves in place the general contours of the MBAR (Mixed Beverage Annual Review) Ratio, but mixed beverage restaurants selling significant amounts of food and smaller restaurants will be subjected to a less onerous MBAR Ratio. Mixed beverage restaurants selling at least $48,000 of food each month will not be subject to the MBAR Ratio, and mixed beverage restaurants selling at least $25,000 but less than $48,000 of food each month and certain low-occupancy restaurants will be subject to a reduced 30% MBAR Ratio. All other mixed beverage restaurants will remain subject to the current 45% MBAR Ratio.
Late Tax Report Penalties Limited: SB 788 places limitations on penalties for late filings. The bill also requires Virginia ABC to implement an online system for filing wholesale wine tax reports, though this requirement does not go into effect until Jan. 1, 2027.

Stateways

​Control states and their supplier partners face a variety of challenges every year. This includes the need to invest, adapt and innovate in real time, in order to advance the future values of those agencies and corporations.

This remained a challenging task in 2025, as shifting consumer tastes and a tricky global economy continue to drag on the alcohol industry. For a look at how everybody involved in the industry approached this difficult, multifaceted task, we checked in with the NABCA Industry Advisory Committee.

Throughout the year, the NABCA Board of Directors meets with the advisory committee - a group of beverage alcohol supplier executives - to address new and ongoing issues facing the control state system. StateWays annually invites these committee members to share their accomplishments, challenges and initiatives from the past year.

The theme for NABCA Chair Kathie Durbin's has been: "Connect, Respect, Elevate." We suggested that committee members speak about how they have worked to achieve that goal.

Brooke Rodriguez

BACARDI USA

Vice President, Control State Affairs

CONNECT, RESPECT, ELEVATE: HOW BACARDI BRINGS THE THEME TO LIFE THROUGH EXPERIENCES

This past year, Bacardi delivered on the theme Connect, Respect, Elevate through programs that extended far beyond the bar and across the U.S. By using our iconic portfolio as a gateway into music, travel, culture and sports, we launched immersive consumer experiences, strengthened on-premise partnerships, and elevated cocktail culture into a full-spectrum lifestyle. Each initiative was designed to connect authentically with consumers, strengthen and respect the trusted relationships we share with our customers and partners, and elevate experiences through flawless execution and shared purpose.

As highlighted in the 2026 Bacardi Cocktail Trends Report, cocktail culture is evolving rapidly. Gen Z and Millennials are reshaping cocktail culture, driving demand for drinks that double as shareable, lifestyle experiences; as shown by 57% of Gen Z respondents who believe in-person experiences are worth the effort. These insights reinforce what Bacardi has long believed: connection fuels loyalty, and experiences drive relevance.

A standout example is Hacienda Patron at last year's Dreamville Festival in North Carolina, which was designed to feel authentic, energetic and deeply rooted in music culture. The two-story Hacienda Patron activation delivered a premium yet inclusive experience, featuring local vinyl DJs, the Patron Headliner Margarita served in collectible cups, and daily happy hours. The results spoke for themselves: Patron was the #1 spirit sold onsite, driving year-over-year growth in sales and generating more than three million impressions.

Dewar's brought the same commitment to premium, purpose-driven experiences to the U.S. Open Golf Championship in Pennsylvania. As the Official Scotch Whisky of the tournament, Dewar's engaged consumers through branded bars and hospitality spaces throughout the grounds, inviting fans to pause, socialize and savor the moment with the Dewar's Lemon Wedge, the championship's official cocktail. To further elevate the experience, Dewar's complemented its onsite presence with the annual release of Dewar's 19 Year Old "The Champions Edition," a limited edition, collectible whisky honoring the host course, local heritage, and the rituals of golf.

As a family-owned company ater seven generations, respect for customers, partners and people has been foundational to the legacy of Bacardi. That commitment was most recently recognized for the sixth consecutive year when Bacardi USA was named "Best Large Spirits Supplier" at the 2026 VIBE Conference, an award determined exclusively by national account operators. This recognition reflects not only the strength of our portfolio, but also the trust we've built through service excellence, consistency and collaboration.

Whether through music festivals, lifestyle popups or industry-leading partnerships, Bacardi continues to connect authentically, respect deeply and elevate experiences with excellence. As cocktail culture becomes increasingly experiential and expressive, Bacardi is proud to lead - not just by what's poured in the glass, but by the meaningful moments created around it.

Raj Kandyil

PERNOD RICARD USA

Division Vice President, Control States

CREATEURS DE CONVIVIALITE: CONNECT, RESPECT, ELEVATE

At a time when our industry is navigating unprecedented change, including shifting consumer expectations, economic pressure and increasing complexity, one thing has never felt more essential: human connection.

The alcohol beverage industry has always been about more than products on shelves. At its best, it's about bringing people together around a table, a celebration, a shared moment. That belief sits at the heart of Pernod Ricard's purpose: Createurs de convivialite, creators of conviviality. It's a simple idea, but a powerful one, that fostering genuine moments of connection is both a human need and a business imperative.

CONNECT

In today's environment, connection doesn't happen by accident. It requires intention. Listening carefully to consumers, collaborating closely with partners and showing up authentically in the communities we serve. Nowhere is this more evident than in control states, where success depends on trust, transparency and long-standing relationships.

Our brands carry stories, heritage and craftsmanship that come to life only when they are shared. Whether we're working alongside control boards, educating retail teams or engaging responsibly with consumers, connection is what transforms a transaction into a relationship. Those moments are what allow our industry to remain relevant and resilient.

RESPECT

Respect starts with people. Inside Pernod Ricard, it shapes how we collaborate, how we lead and how we create space for different perspectives. Externally, it guides how we partner with customers, suppliers, farmers, and communities.

An inclusive culture is not a "nice to have"; it is foundational to better decision-making and stronger outcomes. When people feel valued, heard and safe, they do their best work. Especially in times of pressure, respect becomes a stabilizing force; one that strengthens teams and reinforces trust across the system.

In control states, where policy, public responsibility and commercial objectives intersect, respect is essential. It allows us to navigate complexity thoughtfully while staying grounded in shared goals.

ELEVATE

As an industry, we also have a responsibility to elevate our standards, our impact and our stewardship of the future. Pernod Ricard's sustainability and responsibility strategy, Good Times from a Good Place, reflects a belief that long-term growth and positive impact are inseparable.

From sustainable sourcing and regenerative agriculture to responsible hosting and circular production, our ambition is to create convivial moments that are sustainable for people and planet alike. We are committed to caring for the land, protecting water resources, reducing our carbon footprint and promoting responsible consumption. These efforts are not separate from our business strategy, they are central to it.

LOOKING AHEAD

What gives me the greatest confidence in the future of our industry is our people. Their dedication, creativity and willingness to go the extra mile, year ater year, are what allow us to meet evolving consumer needs while staying true to our values.

As I reflect on my time at Pernod Ricard USA, I'm continually inspired by the belief that better connections lead to better outcomes for our partners, our communities and our business. In an industry built on shared moments, human connection isn't just important. It's everything.

Sean Noble

CAMPARI

General Sales Manager Control States

CONNECT, RESPECT, ELEVATE: WHY IRL MOMENTS MATTER MORE THAN EVER

In a world increasingly shaped by screens, notifications and digital conversations, the way we gather and unwind has evolved. Happy hours often happen over group texts. Celebrations are announced in stories and posts. While technology keeps us constantly connected, it can also leave us craving something more personal - more present. That's why NABCA Chairwoman Kathie Durbin's guiding principle - "Connect, Respect, Elevate" - feels especially relevant today.

Her message calls on the beverage alcohol industry to foster meaningful relationships, operate responsibly and elevate standards across communities. It's a philosophy that aligns seamlessly with Campari America's global call to reconnect in real life (IRL) - to step away from the scroll and gather around shared experiences, culture and exceptional cocktails.

Connect. True connection goes beyond likes and comments. It's found in the simple act of clinking glasses at a neighborhood bar, sharing a toast at sunset or sitting across a table from friends. These moments carry a warmth that no video call can replicate.

Campari America's portfolio offers countless invitations to reconnect in person. The vibrant orange glow of an Aperol Spritz, served over ice with prosecco and a splash of soda, signals more than refreshment - it signals a pause. A moment outdoors. A shared laugh. A toast that lingers longer than a notification ever could. In a world that moves quickly and digitally, the Spritz encourages us to slow down and savor.

Respect. Durbin's call to respect underscores responsibility to consumers, to communities and to one another. Respect today includes drinking responsibly, supporting local hospitality professionals and honoring the spaces that bring people together.

A cocktail like the Espolon Paloma, bright with tequila, fresh grapefruit and lime, embodies celebration with intention. It's about quality over quantity. Craft over excess. Sharing a thoughtfully made drink in good company is a nod to the bartenders, servers and producers who elevate the experience. Respect also means recognizing that the moments we create together should be safe, inclusive, and welcoming for all.

Elevate. To elevate is to raise expectations and enrich everyday experiences. It might mean choosing to meet face-to-face instead of sending another message. It might mean hosting a small gathering rather than multitasking during a conversation.

The Wild Turkey Bold Fashion, a modern take on the Old Fashioned, features a robust bourbon character and balance, speaking to that elevated moment. It's a drink meant to be savored slowly, in conversation - not rushed between distractions. It invites storytelling. Reflection. Presence.

Hospitality spaces - restaurants, bars, backyard patios, community events - serve as the backdrop for many of life's most meaningful interactions. Reconnecting IRL is more than a trend; it's a reminder that shared experiences build stronger communities.

Durbin's "Connect, Respect, Elevate" reminds us that the beverage alcohol industry has the opportunity - and responsibility - to foster these meaningful experiences. Campari America's global invitation to reconnect around great cocktails reinforces that mission.

As digital noise continues to compete for our attention, perhaps the real luxury is simple: stepping away from screens, gathering intentionally and raising a glass together. Because connection isn't just about being online - it's about being present.

Nick Bock

SUNTORY GLOBAL SPIRITS

General Manager, Control States Region

CONNECT. RESPECT. ELEVATE.

At Suntory Global Spirits, "Connect. Respect. Elevate." is more than a theme - it is a way of working that shapes how we grow, innovate and contribute to the world around us. As a Suntorian of more than 17 years, I have seen firsthand how deeply this philosophy is embedded across our teams, our brands and our global footprint. It reflects our commitment to building meaningful connections, honoring the environments and cultures that sustain us and continuously elevating our craft to create exceptional experiences.

Our purpose - to inspire the brilliance of life, by creating rich experiences for people, in harmony with nature - comes to life through this lens. It connects over 40,000 Suntorians worldwide through our shared values of Growing for Good, Yatte Minahare and Giving Back to Society. These values guide our ambition to become the World's Most Admired Premium Spirits Company, ensuring that growth is not only measured in business performance, but in positive impact.

To connect is to collaborate across boundaries - between teams, industries and communities. Our partnership with Bosland Growth is a powerful example. Through a 20-year commitment to reforest 400 acres of previously mined land in Pennsylvania and West Virginia, we are building connections that extend far beyond our organization. By working alongside landowners, nurseries, universities, government agencies and non-profits, we are helping to restore ecosystems while supporting local economies. These efforts also reinforce the sustainability of our own value chain, as native hardwoods like white oak are essential to crating the barrels that age our world-class whiskies. Connection, in this sense, is both ecological and human - linking people, resources and purpose for generations to come.

To respect is to honor both nature and heritage. Across our global portfolio, this is evident in how we preserve natural resources and celebrate cultural identity. In Mexico, the "Made in Mexico" certification awarded to our Sauza Tequila portfolio underscores our respect for origin, craftsmanship and history. Our brands like Sauza, Hornitos and Tres Generaciones represent more than products - they embody over 150 years of tequila-making tradition.

By recognizing the cultural and industrial value of these spirits, we reinforce our commitment to the communities and traditions that define them. Respect also extends to the environment. From restoring peatlands in Scotland for Laphroaig to protecting water resources and reducing emissions, we ensure our operations remain in harmony with the natural systems that make our products possible.

To elevate is to continuously push boundaries - of innovation, sustainability and storytelling. Over the past year, initiatives like Star Hill Farm Whisky have brought regenerative agriculture and nature-led cratsmanship to the forefront, earning global recognition. At the same time, we have achieved measurable progress across our sustainability goals: stewarding tens of thousands of acres with regenerative practices, planting our one millionth tree, reducing water usage ahead of schedule and cutting emissions significantly since 2019. These achievements are not isolated wins - they elevate our brands, strengthen consumer trust and position us competitively in a market where purpose and performance go hand in hand.

Ultimately, "Connect. Respect. Elevate." reflects how we build resilient brands and a resilient business. By connecting with partners and communities, respecting the environments and cultures that shape our products and elevating our standards every day, we are creating lasting value - for consumers, for society and for future generations. As we carry this momentum through 2026, we remain committed to better land, more flavorful spirits, and brands that people around the world truly admire.

Reed Davis

LUXCO

Business Unit Manager - Control States

"CONNECT, RESPECT, ELEVATE"

As a proud NABCA member, NABCA Chair Kathie Durbin's theme Connect, Respect, Elevate reflects our focus as we work with our control state partners to successfully navigate the industry and meet the needs and expectations of adult consumers. We're grateful for the ongoing partnership, as Luxco continues to invest in sales and marketing initiatives in control states at a rate equal to or greater than our peers. By working together we've been able to drive brand awareness and sales of Luxco products, and deliver more dollars back to control states. We're pleased to highlight several of these successful programs and the new Luxco leadership team whose support and direction make these efforts possible.

Connecting with adult consumers across control states has been evident through Rebel Bourbon's ongoing partnership with Richard Childress Racing (RCR). As the official bourbon of RCR and a multi-race primary sponsor of Kyle Busch and the No. 8 team in the NASCAR Cup Series, Rebel continues to build upon a successful program that celebrates bold originality and a rebellious spirit.

In 2025, Rebel Bourbon brought the Rebel show car to racing markets and hosted bottle signings with Busch, including a signing event at the Virginia ABCHeadquarters, where he greeted more than 400 fans and signed over 250 bottles of Rebel Bourbon. In addition, the brand team provided bold and timely product displays at key ABC locations and held various branded at-track activations. Rebel's momentum continues throughout the 2026 NASCAR Cup Series season, with the annual launch of Rebel Bourbon Kyle Busch 108, engaging product displays featuring Rebel-branded racing video games and show car visits and bottle signings in Michigan and other markets.

The success of Rebel's RCR sponsorship, product offerings and activations is one of the reasons why Luxco was able to grow share on dollars in 2025. Another reason is the sheer success of Penelope Bourbon.

Elevating our award-winning Penelope Bourbon brand remains a priority. Sought ater and consistently ranked as a top bourbon brand, Penelope leans into consumer demand and preferences by crafting and promoting a host of limited offerings in addition to its popular Core Series which includes Wheated, Four Grain, Barrel Strength, Architect and Toasted Bourbon.

In 2025 Penelope entered the booming ready-to-pour market with the launch of its first-ever bottled cocktail: Penelope Peach Old Fashioned. Penelope's ready-to-pour portfolio quickly expanded with its release of Black Walnut Old Fashioned and Apple Cinnamon Old Fashioned. These premium, handcrafted cocktails offer the perfect balance of convenience and quality while delivering a fresh take on a timeless classic - and they've quickly become a consumer favorite and sales driver. Our Yellowstone Bourbon brand found similar success with the 2025 debut of its ready-to-serve Yellowstone Cocktails: Gold Rush, Old Fashioned and Espresso.

Our innovative work within the spirits industry and our vision for future success is set and supported by the Luxco leadership team. In 2025, two key changes were made to this team. Julie Francis was appointed President and CEO, and Matias Bentel joined as Chief Marketing Officer. Both Julie and Matias bring decades of experience in the food, beverage and alcohol industries, along with the proven ability to build and grow brands. These leaders understand market challenges, respect the needs of control states and remain committed to working with control-state partners to help grow their business.

As we continue to move forward together, we value the level playing field and trusted data Control States offer - and we look forward to sharing best practices in our role on the NABCA Industry Advisory Committee to help further NAB-CA's goals.

Jacob Sabel

HEAVEN HILL BRANDS

Vice President - Strategic Partnerships

FORWARD TOGETHER: BUILDING CONNECTION, ELEVATING THE CATEGORY, AND RESPECTING WHAT ENDURES

As we look ahead to another year of collaboration within the National Alcohol Beverage Control Association, I want to begin with gratitude. Kathie Durbin's leadership has helped guide the Control State system through a dynamic period, and I'm pleased to welcome Chris Graham as incoming Chairman. His perspective and experience come at an important moment for our industry.

Because if there's one thing that feels clear right now, it's this: we are not standing still. We are recalibrating, reconnecting and in many ways, rediscovering what has always made this industry work.

At Heaven Hill, we see the Control State system as a critical partner in that work. As the largest, independent family-owned and -led distilled spirits company of brands in the United States, our focus remains on building long-term relationships that create shared value, not just short-term wins.

A YEAR FOCUSED ON CONNECTION

If the last few years were about acceleration, this moment is about reconnection.

Across the industry, we are seeing a renewed focus on socialization and experience. Consumers are still seeking out spirits, but increasingly in moments that feel meaningful. That might look like a distillery visit, a cocktail program that surprises them or simply gathering with friends in a way that feels intentional.

For us, that shows up in how we invest behind experiences like the Heaven Hill Bourbon Experience and the continued evolution of our distilleries, including Heaven Hill Springs. These are not just brand homes. They are places where consumers reconnect with the category itself.

It also shows up in how we meet consumers where they are. Whether through partnerships like Evan Williams' collegiate programs or broader cultural moments like America 250, the goal is simple. Be present in the moments that matter.

ELEVATING THROUGH INNOVATION AND PREMIUMIZATION

At the same time, we continue to see strong demand for premium, differentiated offerings.

That demand is not new, but it is becoming more defined. Consumers are looking for products with a point of view. They want craftsmanship they can understand and quality they can trust.

Across our portfolio, that has led to continued investment in both innovation and premium expressions. Releases like Old Fitzgerald 7-Year, Elijah Craig 15-Year and Heaven Hill Grain to Glass reflect that focus. So do newer expressions like Deep Eddy Espresso, which bring a different kind of relevance to evolving consumer tastes.

It is not about chasing trends. It is about knowing who you are and continuing to raise the bar.

RESPECTING WHAT GOT US HERE

Even as we look forward, there is a growing appreciation for what has endured.

Legacy brands, time-tested processes and a commitment to cratsmanship are not just part of our history. They are part of our advantage. In a market that can sometimes move quickly, consistency matters.

Brands like Elijah Craig and Evan Williams continue to resonate because they are grounded in something real. They have earned trust over time, and that trust shows up in how consumers choose and how partners engage.

That same mindset extends to the way we operate. Long-term thinking, disciplined investment and respect for the category have always been central to our approach.

EXPANDING THE CONVERSATION

Growth is also coming from new places.

The tequila category remains one of the most dynamic areas in spirits. Tequila Ocho continues to set the standard for cratsmanship, while Lunazul remains one of the fastest-growing and most well-liked brands in the agave space. Together, they reflect how consumer interest is expanding, not replacing, what has come before.

This is not about one category winning over another. It is about a broader, more diverse spirits landscape.

If you step back, a pattern starts to emerge.

CONNECTION. ELEVATION. RESPECT.

Different words, but they point to the same idea. This industry works best when it builds on what has always been true while staying open to what comes next.

For Heaven Hill, that means continuing to invest in our brands, our partnerships and the communities we serve. It means showing up as a reliable partner within the control-state system. And it means staying focused on the long-term, even when the short-term conversation gets noisy.

We are optimistic about where we are headed, not because the path is simple, but because the foundation is strong.

We look forward to another year of working together, building momentum, and continuing to move the industry forward.

Together, we thrive.

Scott Schrader

DIAGEO

SVP/GM - Control State

"CONNECT, RESPECT, ELEVATE" - CAPTURING THE MOMENT

"In the middle of difficulty lies opportunity." Albert Einstein, Physicist (1879 -1955)

The theme of this year's conference - Connect, Respect, Elevate - captures both the spirit of our industry and the moment we are navigating together.

To connect is to build meaningful relationships across every part of our ecosystem. As Chairwoman Durbin notes, connection is foundational to how we work. For Diageo, that means strengthening our partnerships with control states, distributors and retailers, while staying closely attuned to the needs of our consumers. In an environment where focus and alignment matter more than ever, strong relationships are what enable us to move with clarity and purpose.

To respect is to recognize that we operate in a dynamic environment that continues to evolve. We don't always see things the same way - and that's exactly why listening matters. Respect means meeting our partners and consumers where they are today, approaching differences with civility and acknowledging that the path forward requires adaptability, understanding and shared perspective.

To elevate is how we bring it all together. Rooted in hospitality, it's about going the extra mile - through education, execution and a commitment to leaving things better than we found them. At Diageo, we are evolving our strategy to meet this moment - simplifying how we operate, sharpening our focus and ensuring our portfolio is positioned to win across a broader set of occasions and consumer needs.

Connect. Respect. Elevate. When we live these principles together, we strengthen our industry and grow responsibly and sustainably for the future.

by KYLE SWARTZ

March 27, 2026
Library of Congress Blog

Posted by: Lena Mattson


I love making cocktails at home, and on a recent visit to re-supply from one of my favorite local distilleries, I noticed a newly released whiskey with a designation I had not previously heard of, “bottled in bond.” I asked one of the distillery staff for clarification and learned that “bottled in bond” is in fact a legal designation: to be considered “bottled in bond,” a whiskey or other distilled spirit has to be produced from one kind of spirit, distilled over one distilling season by the same distiller at the same distillery, stored for at least 4 years in wooden barrels under government supervision, unaltered (no additives), and produced/bottled at 50 percent alcohol or 100 proof. A few months later, I remembered this bit of information at work one day when, to my surprise, I came across Sanborn fire insurance maps from the 1890s that were not of a single town or city as usual, but of whiskey warehouses in several states, and some of those warehouses were labeled as “bonded.”

Was the term “bonded” here related to the designation of “bottled in bond”? As I learned, yes, and not only that, but also it turns out that the history of whiskey and its regulation is highly intertwined with some foundational regulatory moments of the American republic.
One of the first tests of the United States government’s federal power came in the form of the Whiskey Rebellion, during which farmers of southwestern Pennsylvania – which was then the American frontier – raised an armed rebellion in 1794 against a 1791 excise tax targeting distilled spirits. President George Washington Federalized a militia and had to personally lead troops into the field – the only sitting U.S. President to do so – in order to calm the rebellion, fortunately without casualties. Though it remained unpopular, the tax stood.

Interestingly enough, three years later Washington was convinced by a friend to build and run a whiskey distillery on his property at Mount Vernon, which proved to be an immensely successful and profitable retirement project. The original facility has been restored to a working distillery that tourists can visit and sample the wares from to this day. And yes, Washington paid his distilled spirits taxes properly.

The 1791 excise tax on distilled spirits remained in place until 1802, then was repealed, and then was reinstated off and on again through the remainder of the 19th century along with several other excise taxes in the United States. At the same time, the American frontier continued to expand westward, and distilling went from being a big family business to being a very big corporate business. One of the tensions of the original spirits excise tax that had led to the Whiskey Rebellion was the fact that larger distilleries around big cities (far from the frontier) were able to bear the initial costs more easily due to the sheer volume of their production and the fact that their wealthy consumers would pay a higher price if it was passed along to them. On the other hand, frontier distillers had to pay what was essentially a regressive tax per gallon, since they could not produce the quantity needed to get a flat fee the way the big city producers could, and their local consumers could not afford any cost increase passed along. This is where the bonded warehouses I saw on the fire insurance maps come in.

Bonded warehouses proliferated over the course of the 19th century in the US and they are still in use today. Their existence is directly related to excise taxes on products like alcohol and tobacco, because they are a legal category of building or other secured area in which dutiable merchandise can be stored without payment of duties for a set amount of time. (Perhaps the most recognizable public-facing form of bonded warehouse that still exists is the duty-free store at airports.) While in current parlance we associate bonded warehouses with imports, they also mattered for domestic products in the days of excise taxes in the United States, because if distillers could sell their spirits without having to pay a tax on their goods upfront, it gave them financial flexibility and further incentivized producing quantities at a large scale.

By the end of the century, bonded warehouses for distilled spirits (almost always whiskey) appear on Sanborn maps, like this one of Frankfort, Kentucky from 1886.

However, as whiskey production became an ever larger cash cow, so did an insidious side hustle that plagued practically every aspect of food and beverage production in those days: fraud and tampering. The problem in the 19th century was that once American distillers sold their barreled wares, they often went to distributors who had financial incentives to be unscrupulous, stretching out their whiskey supply by blending it with coloring agents and chemicals before bottling the final products for unsuspecting consumers. The additives ranged from disgusting to dangerous, commonly noted to include tobacco, turpentine, iodine, and kerosene! To make matters worse, especially if you happened to be a US lawmaker from a whiskey-producing state, was that consumers had an alternative to the unregulated American goods in the form of Canadian whiskey, which flooded American markets neatly bottled and stamped with the assurance that it had been produced under government control and with no possibility of tampering. Congress decided to act, and in so doing would pass what is considered the first consumer protection legislation in American history.

In May 1896, An Act to Allow the Bottling of Distiller Spirits in Bond was taken up for debate in the U.S. House of Representatives by Congressman Walter Evans of Kentucky’s Fifth District. Evans laid out the proposal, for bonded warehouses to be controlled under lock and key by government agents, and for distillers to be permitted to bottle their own products on premise and label them as “bottled in bond.” The bottled in bond seal would give the assurances I mentioned at the beginning of this post that are now codified in federal regulations, and would also mean that consumers could know beyond a shadow of a doubt that the homegrown American whiskey they bought with this seal was pure and unadulterated. If you want to read the full text of the debate, which is very lively in part because of a Temperance-minded Representative from Massachusetts who joined the fray, it’s available in the Congressional Record on Congress.gov beginning on page 5377. The act passed into law in the following year, and by the time of the 1910 Sanborn fire insurance maps of Kentucky and Tennessee warehouses pictured below, you can see the bottling plants as well as the bonded warehouses on distillery grounds.

The bottled in bond designation was seen as less important after the 1906 Pure Food and Drugs Act created the food and beverage regulation that are the cornerstone of the modern U.S. Food and Drug Administration (FDA), and Prohibition cut into the existence and profitability of the business model, but as I saw for myself, the practice is seeing a resurgence now at some distilleries. Cheers!

Learn More

• There is a lot more to discuss regarding the fascinating causes, events, and aftermath of the Whiskey Rebellion than I had space to explore in this post. Along with the Alcohol and Tobacco Tax and Trade Bureau report already cited in the text above, you can learn more about it from this Library of Congress research guide, This Month in Business History: The Whiskey Rebellion, and also from George Washington’s Mount Vernon.
• If you’re curious about the difference between common types of American whiskey, see this blog post from my colleagues in the Science, Technology, and Business Division: On the Subject (Heading) of Bourbon Whiskey.
• Many thanks to the Law Library of Congress for their assistance in finding the legal references for the history of the 1897 Bottled in Bond act! Any errors made in interpreting that history are my own.