Indiana House Bill HB1663

Indiana 2025 Regular Session

• Introduced: 1/21/25
• Refer: 1/21/25
• Report Pass: 2/4/25
• Engrossed: 2/11/25
• Refer: 3/3/25

Caption

Collaborative distilling.

Summary

HB 1663 revises Indiana alcohol law to expand what an artisan distiller may do with liquor sourced from other licensed manufacturers and with liquor made for another artisan distiller. The bill allows artisan distillers to blend, redistill, age, and bottle sourced liquor under specified conditions, and it creates a new pathway for one artisan distiller to manufacture liquor for another artisan distiller if the receiving permit holder has a minimum level of prior production from raw materials and the total outsourced production does not exceed that permit holder’s own annual raw-material production. The bill also clarifies and adjusts gallonage and sourcing rules for artisan distillers and related permit holders. It provides that certain brandy or liquor transferred in bond counts toward the receiving permit holder’s annual gallonage limit, and it exempts pre-July 1, 2025 in-bond transfers between specified permit types from the new sourced-liquor limits. Additional provisions address storage facilities, direct sales and delivery, restaurant operations tied to artisan distiller interests, and limited transport to breweries for carbonation and canning.

Impact

HB 1663 amends multiple sections of Indiana Code Title 7.1 governing alcoholic beverages, especially artisan distiller permits and farm winery brandy distiller permits. It changes the legal definition of what artisan distillers may manufacture and sell, imposes a 70% raw-material production threshold for sales of blended or sourced liquor as the distiller’s own product, and authorizes limited contract manufacturing between artisan distillers. It also creates a retroactive carve-out for certain in-bond transfers made before July 1, 2025, and clarifies how those transfers count toward gallonage limits.

Sentiment

The bill appears to have broad support. It was reported out of the House Public Policy Committee unanimously, 12-0, and later passed the House on third reading by a wide margin, 88-4. The available record suggests the measure was viewed favorably as a targeted modernization of craft distilling rules rather than a controversial overhaul.

Contention

The main policy issue is how far artisan distillers should be allowed to rely on sourced liquor and collaborative production while still marketing products as their own. Supporters appear to favor flexibility for small distillers, shared production, and expanded business models such as adjacent restaurants and limited wholesale activity. Potential concerns center on preserving the integrity of the artisan distiller label, preventing excessive use of sourced liquor, and ensuring the 70% raw-material threshold and gallonage caps are enforced. The bill’s retroactive treatment of pre-July 1, 2025 in-bond transfers also suggests an effort to resolve compliance questions for existing industry practices.