Present law authorizes issuance of an alcoholic beverage manufacturer's license to a person, firm, or corporation for the limited purpose of blending nonalcoholic products with alcoholic beverages on premises, either on its own behalf or on behalf of other entities pursuant to contract. A licensee may obtain the alcoholic beverages for use in its blending operations from a licensed manufacturer, distiller, wholesaler, and nonresident seller. This bill adds authorization for a licensee to obtain the alcoholic beverages for use in its blending operations from a licensed winery. Any product that may result from the blending, distilling, or fortifying of such wine by the manufacturer is the sole property of the manufacturer. The manufacturer or winery may transport the wine from the Tennessee winery. The transactions will not be subject to taxation.
This bill authorizes a licensed manufacturer to distill, blend, and fortify wine of a winery on behalf of the winery, and such distilled, blended, or fortified wine is the sole property of the winery. The manufacturer or winery may transport the wine from the Tennessee winery. The manufacturer or winery may transport the distilled, blended, or fortified product back to the winery. The transactions will not be subject to taxation.
Under present law, a winery license authorizes the licensee to manufacture, but not rectify, alcoholic vinous beverages, unless the holder of the license is also a distiller or rectifier, or both, holding a license to distill or rectify, or both, alcoholic spirituous beverages. This bill replaces the prohibition against rectifying wines pursuant to a winery license and authorizes a licensed winery to blend wine manufactured by the winery with other wine, fortified wine, distilled wine, or non-alcoholic products.
Under present law, a winery permit holder is not authorized to sell distilled spirits at retail. This bill authorizes a winery permit holder to sell champagne, sparkling, and fortified wine of an alcoholic content not to exceed 21 percent by volume.
This bill authorizes wineries to have their wine distilled, blended, or fortified with distilled wine spirits made from their wine by manufacturers and receive from manufacturers the wine created by such distilling, blending, or fortifying, and such distilled, blended, or fortified wine will be the sole property of the winery producer. This bill also authorizes wineries to sell wine to licensed manufacturers of alcoholic beverages, and such wine, and any product that may result from the blending, distilling, or fortifying of such wine by the manufacturer, is the sole property of the manufacturer. The manufacturer or winery may transport the wine from the winery and may transport the distilled, blended, or fortified wine owned by the winery back to the winery. The transactions will not be subject to taxation.
The provisions of this bill authorizing certain activities involving blended products by wineries also apply to farm wine permittees.
ON MARCH 16, 2023, THE SENATE ADOPTED AMENDMENT #1 AND PASSED SENATE BILL 988, AS AMENDED.
AMENDMENT #1 conditions the authorizations granted in the following provisions on the grantees not adding to the wine, distilled spirits derived from a type of grain or product other than wine:
(1) The provision authorizing a licensed manufacturer to distill, blend, and fortify wine of a winery on behalf of the winery;
(2) The provision authorizing a licensed winery to blend wine manufactured by the winery with other wine, fortified wine, distilled wine, or non-alcoholic products;
(3) The provisions authorizing wineries to have their wine distilled, blended, or fortified with distilled wine spirits made from their wine by manufacturers and to receive from manufacturers the wine created by such distilling, blending, or fortifying; and
(4) The provision authorizing the manufacturer or winery to transport the wine from the winery and to transport the distilled, blended, or fortified wine owned by the winery back to the winery.

Statutes affected:
Introduced: 57-3-202(f)(2), 57-3-202, 57-3-207(b), 57-3-207, 57-3-207(h)(2)(A)(i), 57-3-207(o)(4)(A)
Amended with SA0098 -- 03/16/2023: 57-3-202(f)(2), 57-3-202, 57-3-207(b), 57-3-207, 57-3-207(h)(2)(A)(i), 57-3-207(o)(4)(A)