Category archives for “ABC law”

California ABC Announces 2017 New License Authorizations

August 07, 2017

August in California means one thing to alcohol beverage attorneys – ABC priority license announcements! Every year the California ABC announces which counties are eligible for new on-sale and off-sale general licenses based on population growth within each county. The 2017 figures have been released, and the numbers this year are sure to excite a lot of retail applicants. In addition, recent legislation granted the ABC the ability to authorize new on-sale general licenses in certain counties regardless of population growth. Along with the authorized priority licenses, the ABC will be accepting applications for licenses in the following counties: Napa (5), Inyo (5), and Alpine (4). Applicants for these licenses will need to meet certain restaurant seating capacity requirements.

The Low-Down

General retail licenses authorize the sale of beer, wine, and distilled spirits. They are restricted by county population and must typically be purchased on the open market from an existing licensee, often for a very high premium. Licenses are usually confined to the county in which originally issued, so prices vary drastically across the state. Every year, during the ‘priority application period,’ the ABC accepts new license applications. In addition, they announce a number of inter-county transfer allowances – where an applicant in a priority county can purchase a general license on the open market from a licensee in any other county and transfer it into the priority county.

If you’re in the market for an Off-Sale General Package Store License (Type 21), an On-Sale General Eating Place License (Type 47), or a Special On-Sale General Club License (Type 57) within a county where licenses are available, you should apply. Note that an applicant may be approved for an On-Sale General Public Premises License (Type 48), but only if the applicant is able to establish during the formal application process that there is a substantial public demand that cannot otherwise be satisfied.

County Availability

The maximum number of priority applications the ABC typically authorizes for each category (new on-sale, new off-sale, inter-county on-sale, inter-county off-sale) is twenty-five. The ABC has authorized the maximum number of priority applications in several counties, including Alameda, Contra Costa, Los Angeles, Orange, Riverside, Sacramento, San Bernardino, San Diego, and Santa Clara. For a complete list of license available by county, click here.

Deadlines

ABC District offices will accept priority applications by mail or in person from September 11-22, 2017. If by mail, it must be postmarked on or before September 22nd. If the ABC receives more applications than licenses available, a public drawing will be held at the District office, usually in early-mid October. Successful applicants will have 90 days to complete a formal application.

Fees

Priority application fees are $13,800 for new general licenses and $6,000 for inter-county transfers. A certified check, cashier’s check, or money order must be submitted along with the priority application. Unsuccessful applicants will be refunded the application fee, minus $100 service charge.

Additional Requirements

Residency requirements specify that every applicant must have been a resident of California for at least 90 days prior to the scheduled drawing. For corporations, limited partnerships, and limited liability companies, the 90-day residency clock starts ticking upon registration with the California Secretary of State.

An applicant doesn’t need to have a specific premises secured to apply for a priority license, but if successful, will need to submit a formal application for a specific location (within that same county) within 90 days. The applicant will be required to present a lease with at least a two-year term for the premises. Priority licenses are subject to certain conditions, including a prohibition against transferring the license for two years after issuance.

If you’re interested in applying for a new or inter-county on- or off-sale general priority license, contact an attorney at Strike & Techel.


Suppliers Now Allowed to Use Social Media to Support Certain Charity Events Sponsored by Retailers

February 17, 2016

Effective January 1, 2016, the California ABC Act contains a new section that loosens the restrictions suppliers face when mentioning a retailer in a social media post. Newly added Business and Professions Code § 23355.3 is aimed at clarifying how suppliers and retailers can co-sponsor nonprofit events. It was drafted, in part, as a response to the backlash that occurred after the ABC filed accusations against several wineries for advertising sponsorship of the “Save Mart Grape Escape” charity fundraising event in 2014. In that instance, several wineries posted or tweeted their support and sponsorship of the event on social media. The ABC reasoned that the suppliers were impermissibly advertising for Save Mart, a retailer, even though the event was held under a nonprofit permit issued to a bona fide nonprofit organization. The ABC alleged that by posting or tweeting about the event, the suppliers were giving a thing of value to the retailer, a practice that has long been considered a violation of California’s tied house restrictions.

California law has long permitted supplier licensees to sponsor nonprofit events if the nonprofit gets an event license, and the new law does not fundamentally change that. However, the new section clarifies that a supplier may advertise sponsorship or participation in such events even if a retailer is also a named sponsor of the event. Payments or other consideration to the retailer are still considered a thing of value, and are not allowed, but social media postings no longer fall under that broad category. There are restrictions on what the supplier is permitted to post about the retailer; posts cannot contain the retail price of alcoholic beverages and cannot promote or advertise for the retail licensee beyond mentioning sponsorship or participation in the event. The supplier can share a retailer’s advertisement for the event on social media, but the supplier is not permitted to pay or reimburse the retailer for any advertisement and cannot demand exclusivity of its products at the event. In short, the new section will allow exactly the type of supplier social media support that occurred in the Save Mart Grape Escape situation.


New California Law Creates License for Craft Distilleries, Updates Spirits Tasting Rules

October 13, 2015

On October 8, 2015, California Governor Brown signed the Craft Distilleries Act of 2015 into law, which creates a new license for craft distilleries. AB 1295 is a step forward for craft spirits producers, who will no longer be subject to the same strict restrictions that apply to traditional Distilled Spirits Manufacturers (Type 4 licensees). The new Craft Distiller’s license allows the production of up to 100,000 gallons of distilled spirits each year and also includes several other key privileges not available to larger distilleries that hold Type 4 licenses: Craft Distillers will be able to sell distilled spirits to consumers, operate restaurants from their premises, and hold interests in on-sale retail licenses.

AB 1295 adds several sections to the California Alcoholic Beverage Control Act, including Business and Professions Code Sections 23500 through 23508. Those sections include the following privileges for Craft Distillers:

  • Manufacture of up to 100,000 gallons of distilled spirits each fiscal year (July 1 – June 30), excluding any brandy the licensee may have produced under a Brandy Manufacturer license. Licensees can also package, rectify, mix, flavor, color, label, and export distilled spirits manufactured by the licensee.
  • Sale of up to 2.25 liters of its distilled spirits per consumer, per day, in conjunction with instructional tastings held on its licensed premises.
  • Operation of a bona fide eating place on its licensed premises or a location contiguous to its premises, from which the licensee may sell beer, wine, and distilled spirits.
  • May hold an interest in up to two California on-sale licenses, provided certain conditions are met.
  • Cannot be issued to anyone who manufactures or has manufactured for him over 100,000 gallons of distilled spirits, whether inside or outside California, excluding any brandy the licensee may have produced under a Brandy Manufacturer license.

The new bill also amends Business and Professions Code Section 23363.1 to allow Craft Distillers to conduct distilled spirits tastings either: a) off their licensed premises at a nonprofit event held under a nonprofit permit; or, b) at their licensed premises under specific conditions. The other notable change to the statute is that tastings can be provided in the form of a cocktail or mixed drink, and the sample size limitation has been changed to one and one-half ounces maximum per consumer per day. Those changes apply to both Craft Distillers and Distilled Spirits Manufacturers.

The new laws take effect January 1, 2016.

Contact one of the attorneys at Strike & Techel if you have any questions about distillery licenses in California or elsewhere.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2015 • All Rights Reserved •


California Brewpub Licenses: What You Need to Know

October 08, 2015

Craft beer continues to be all the rage in California and across the country. With the increase in demand for local craft beers, we’ve been getting a lot of questions about how to get licensed as a brewery in California. The California Department of Alcoholic Beverage Control (“ABC”) issues three primary license types that permit beer production, including Beer Manufacturer licenses (Type 1), Small Beer Manufacturer licenses (Type 23) and the increasingly popular On-Sale General Brewpub license (Type 75). The license privileges of each type of brewery license vary, and the brewpub license is a good choice for brewers that primarily want to operate a brewpub or microbrewery restaurant rather than sell their beers for consumers to drink off the brewery’s premises.

A Type 75 brewpub license authorizes the sale of beer, wine and distilled spirits for consumption at a bona fide eating place, which essentially requires that the facility be a restaurant with its own kitchen that serves meals. The ability to sell distilled spirits as a brewpub is a privilege that many find attractive in deciding between brewery licenses. Type 1 and Type 23 breweries may, but are not required to, operate bona fide eating places, but they are limited to beer and wine, and cannot sell distilled spirits. Additionally, beer, wine, and distilled spirits restaurant licenses (i.e., Type 47 On-Sale General for Bona Fide Public Eating Place) are often extremely expensive as the number of licenses issued is limited per county based on population. There is no cap on the number of Type 75 licenses that can be issued, so the Type 75 license can be an attractive option for businesses that want to sell distilled spirits, although all Type 75 licensees must meet certain brewing requirements.

Brewpubs must produce at least 100 barrels of beer per year and can produce no more than 5,000 barrels of beer per year. That production cap is substantially lower than the production allowances for Small Beer Manufacturers (less than 60,000 barrels per year) and Beer Manufacturers (60,000 barrels per year or more). Additionally, a Type 75 brewpub premises must have brewing equipment that has at least seven-barrel brewing capacity. The ABC has recently been looking into the brewing equipment of Type 75 licensees and enforcing against brewpubs that aren’t actually brewing beer or don’t have the requisite brewing capacity.

Other key features of Type 75 brewpub licenses include the following:

• Cannot make sales from the brewpub premises for off-premises consumption. This means that a brewpub cannot sell bottles, cans, growlers or other containers for consumption away from the brewpub.

• Can sell beer produced by the brewpub to California licensed wholesalers.

• Must buy all wine, distilled spirits, and beer not produced by the brewpub from a licensed wholesaler or winegrower. Note that brewpubs cannot buy or sell beer or other alcoholic beverages from other brewpubs or retailers.

The initial fee for a brewpub license is currently $12,000, which is more expensive than most California license types. The annual fee is determined by the population where the brewpub is located, and varies between approximately $500 and $1,000 per year. Additionally, local rules where the brewpub is located may require additional permitting or other approvals before the brewpub can operate. Lastly, all breweries, including brewpubs, must obtain a brewery basic permit from the Alcohol and Tobacco Tax and Trade bureau, the federal agency that regulates alcoholic beverages. There is no fee for the federal permit, but a bond is required.

Contact one of the attorneys at Strike & Techel if you have any questions about starting a brewery!


New California ABC Advisory on Merchandising Services by Suppliers

January 07, 2015

In December 2014, the California ABC posted a new Industry Advisory about merchandising services. Free services provided by suppliers to retail licensees, such as stocking shelves, pricing inventory, rotating stock, etc., are prohibited things-of-value under California Business & Professions Code sections 25500 and 25502. However, a number of permitted exceptions are separately provided for in Section 25503.2. The Advisory was posted in response to inquiries and complaints about the scope of permissible activity. When ABC receives multiple complaints about impermissible conduct, investigations and license accusations may well follow, so it would be prudent for suppliers to review the scope of permissible merchandising activities.

Permitted activity varies depending on the type of retailer and the products involved so we created a simple chart below to help keep it straight.

Note that in all cases, any merchandising activities can only be done with the retailer’s permission. In no case can a supplier move the inventory of another supplier, except for “incidental touching” to access the space allocated to the licensee providing the merchandising service.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2015 · All Rights Reserved ·


TTB Reconsiders Use of “Estate Bottled” Following a Winery Sale

May 21, 2014

To be labeled as “estate bottled,” a wine must be, among other things, made from grapes grown in an American Viticultural Area, on land that is owned or “controlled by” the winery, and the winery must crush, finish, age and bottle the wine in a continuous process.

Previous guidance from the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) suggested that a wine would not be entitled to use the “estate bottled” designation if a change of ownership of the winery occurred at any point during the winemaking process, because the new owner technically would not have “controlled” all phases of the process. To address this issue, sellers and buyers of wineries that produce “estate bottled” wines would sometimes enter into an Alternating Proprietorship Agreement (“AP”) whereby the seller would maintain its bonded winery operations until all wine in process at the winery as of the closing date had been bottled and labeled. This approach was difficult for both sellers and buyers, given that the AP could be in effect for a lengthy period of time depending on which stage of production the “estate bottled” wine was in.

In a recent private letter ruling, the TTB advised that it has reconsidered its position and that the proprietor of a winery can use an “estate bottled” designation for wine that was grown and fermented by a predecessor proprietor and bottled by a new proprietor (provided the wine also met the other requirements under 27 C.F.R. § 4.26). The ruling provides that the ownership of a winery may change while the wine is in process as long as the bottling winery does not change. The TTB further explains that the definition of “controlled by” refers to the land on which the grapes are grown and the winery operates, as opposed to the owner of such land. With a change in winery ownership, the “estate” land is not altered, and thus the new owner can maintain the “estate bottled” designation.

This guidance from the TTB should come as a welcome relief to potential purchasers and sellers of wineries that produce “estate bottled” wines.

For questions about the acquisition or sale of a winery, please contact one of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·


NYSLA Expands Suppliers’ Ability to Entertain Consumers

May 06, 2014

Suppliers’ ability to run events for consumers in the New York market has been up in the air for a number of years now, and especially since the industry consent orders in 2006. Now, the New York State Liquor Authority (SLA) has given helpful and detailed guidance on how these events can be run.

Supplier Purchases of Alcohol from On-Premise Retailers – #2014-8

This new SLA Advisory covers the ways in which suppliers and wholesalers may purchase alcoholic beverages from on premise retailers for consumers. Under the consent orders issued in 2006, there were three ways in which this could be done: (1) on an incidental basis; (2) for employees or private guests at an invitation-only event; or (3) at a bar spend promotional event open to the general public. The new advisory clarifies the scope of those activities and also expands on them.

Purchases for Consumers on an Individual or Incidental Basis

This is unchanged from SLA’s prior position. It is not intended to be an option for promotional events. It permits a supplier rep to buy themselves a drink and to buy a drink for individual patrons of a retailer.

Business Meetings and Private Events

- Business meetings or business entertainment

This means a gathering of a supplier employees, and/or representatives for entities that do business with a supplier (including other suppliers, distributors and retailers). There must be a legitimate business purpose for the meeting, like discussing product sales, new product introductions etc. It does not include holiday parties or other special occasion events. There are no spending restrictions, or limits on the number of meetings at any particular on premise location. The event must be in a reserved area (can be as little as one table), and at least one supplier employee must be present. Retail licensees and their employees can be invited and an invite can be sent to all employees of a particular retailer. Media reps can be present.

- Private invitation only events closed to the general public

This is an event not conducted for a business purpose or for promotional purposes. It must be a gathering of invitees who have an identifiable affiliation with a supplier (e.g., a party for employees, vendors or business associates), or a common affiliation or relationship with each other (e.g. journalists, sports teams or non-profit organizations). The language of the advisory makes it clear the group cannot just be a large gathering of a group of consumers or potential consumers without meaningful commonality other than an attempt to market or target a demographic. Invitations must be sent by a supplier to invitees by individual name, each such invitee may bring only one guest. Invites can be by phone, e-mail, letter, in person, etc. Invites cannot be in any type of media advertisement or generic communication to anyone wishing to attend and cannot be sent to a “mailing list” of consumers obtained or created by a supplier. The event must be in a reserved area (can be as little as one table) and at least one supplier employee must be present. Despite the stated non-business and non-promotional purpose of the events, retail licensees and their employees can be invited, as can the media. A supplier cannot send a general invite to all employees of a retailer or a retail chain.

Promotional Events Open to the General Public – No Invitation Required

Prior to the advisory, a bar spend was limited to $500 (plus 20% tip) and no more than six events per retailer, per year. Now, the limit is $700 (plus 20% tip), and no more than ten events per retailer, per year. A supplier cannot purchase food, non-alcoholic beverages, or anything else from the retailer for such an event. These events can now be advertised, identifying the time, date and location. Invites may also be sent to members of the general public, but the event cannot be restricted to people that received such invitations. There is no longer a need to submit statements after these events; a supplier must maintain a record of each event for two years that includes date, time, location and duration, brands that were purchased, and names of supplier reps or agents who conducted the event.

Promotional Events Open to the General Public – Invitation Required (“Brand Experience Events”)

This is a new category of events which will be extremely helpful for supplier marketing and promotions in New York. The advisory refers to these as “brand experience” events that are “much larger” than bar spend events. At a brand experience event, a supplier can spend up to $10,000 (plus 20% tip), and may purchase alcoholic beverages, non-alcoholic beverages and food. A supplier can also apply to the SLA for advance permission to spend more than $10,000 for an event. A supplier can have up to six such events per retailer per year (whether the event is at a retail premises or whether a retailer caters the event, as catering permits in New York are only held by on premise licensees). Attendees at these events must be invited and an event can be restricted to invitees only. A supplier can invite people individually (by phone, letter, e-mail, in person, etc.), or can also place media advertisements including invitations, generic communications inviting anyone who wishes to attend to register, and “mailing lists” of consumers. A supplier can advertise brand experience events, including date, time and location. Each person registered as an invitee may bring one guest. A supplier must maintain a record of each event for two years that includes date, time, location and duration, brands that were purchased, and names of supplier reps or agents who conducted the event.

Events Where the Supplier or Wholesaler Provides the Alcoholic Beverages

In a very helpful clarification, the new advisory notes that it is only intended to cover occasions where a supplier is purchasing alcoholic beverages from a retailer. It goes on to discuss the fact that a supplier may provide alcoholic beverages for an event without being bound to any of the above exceptions. Specifically:

- Not-for-profit organizations

A supplier may donate product to a not-for-profit organization for an event which the not-for-profit organization is conducting, either at licensed premises or at an unlicensed location with a permit from the SLA. A supplier can also receive promotional benefits in exchange for the donation to the organization. The only real restriction is that a supplier cannot choose the retailer for the event. The new advisory does not use the same restrictive “bona fide charitable organization” language used in the tasting advisory published in July, 2013. It appears that non-charitable not-for-profit organizations qualify for these events.

- Private/Brand Experience events at unlicensed locations

The new advisory allows a supplier to conduct a private invitation-only event or a brand experience event at an unlicensed location and to provide the alcoholic beverages for that event without having to fit into one of the four event types above. Note that any unused alcoholic beverages must be removed by a supplier after any event under this section.

An appropriate permit must be in place for these events. This means that a supplier should use a retail licensee caterer for such events at this stage. We anticipate a new supplier event permit will available in the future.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·


Brewing Beer in California

April 14, 2014

With the explosive growth in craft beers and micro and nano and other really, really small breweries, we at Strike & Techel wanted to put together some helpful tips for anyone looking to brew beer in the state. If you want to make beer commercially, these guidelines will help you work out the best way to start your new business. You will find three ways to get going in the guidelines: small beer manufacturing, beer manufacturing (over 60,000 barrels of beer), and brewpub operations where you get to brew beer and sell it to people in a restaurant or pub setting.

Contact one of the attorneys at Strike & Techel if you have questions about brewing beer in California or other states.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·


Tennessee House of Representatives Overwhelmingly Passes Wine in Grocery Stores Bill

February 24, 2014

Last Thursday, the Tennessee House of Representatives passed House Bill 610 by a vote of 71-15, voting to allow the issue of the sale of wine in grocery stores to be submitted to voters in local referendums, and creating a permit for the sale of wine by grocery stores. On January 30, the Senate had approved Senate Bill 837 by a vote of 23-8. The Bill will now be returned to the Senate to review the remaining differences between the two bills, before it goes to the Governor for signature. If signed by the Governor, it is anticipated that the issue could be on local November ballots for consumers to weigh in on local approval of grocery store wine sales.

One of the key differences between the two bills was fixed by the House in its new version, with the reduction of minimum size for grocery and convenience stores from 2,000 to 1,200 square feet, allowing about 500 more convenience stores to qualify. The House also reduced the fee for a grocery store wine license to $1,250 from $2,000, bringing it closer to the $850 in the Senate Bill. Already, following the House vote, Sen. Bill Ketron, the Republican who sponsored the Senate Bill, indicated to reporters that he planned to accept the House version and could ask for a vote as soon as March 3.

Even if approved, wine sales won’t be possible in grocery locations until summer 2016 due to an agreement reached with lobbies for liquor stores and wholesalers that had opposed the proposals. In another concession to liquor stores, both bills open up opportunities for traditional liquor stores to sell items other than alcohol and to do so as soon as this summer, two years before any grocery store wine sales could begin. Liquor stores are currently allowed to sell only wine and distilled spirits and a few minor accessories like corkscrews. Additionally, grocery stores would be subject to a minimum 20% markup on wines sold, in an attempt to address volume discounting, and would be prevented from offering combined deals of wine and other grocery items. To encourage wholesaler support, the Senate Bill allows for wholesalers to be located outside the four major cities in the state which they are currently restricted to, and the House Bill would extend that even further to any county which currently permits bars or liquor stores to operate. Blue laws, preventing Sunday sales of alcohol, will not be affected by any new legislation, and such sales will continue to be prohibited.

The debate in Tennessee has been ongoing since 2006. It is not the only state which has been discussing this issue as we previously blogged here. Currently, thirty-five states do not restrict the sale of wine in grocery stores. No state has managed to pass legislation changing the status quo since Iowa permitted grocery store sales in 1985. Factions in New York, now the second largest wine-producing state by volume, have attempted to pass wine in grocery store bills on numerous occasions, including a significant push in 2011. The Kansas House Commerce, Labor and Economic Development Committee held a hearing Wednesday on House Bill 2556 which would allow the sale of full strength beer and wine in grocery stores, inducing vigorous debate. A bill introduced to the Oklahoma Legislature this month, which would permit wine to be sold in grocery stores and nonalcoholic beverages and refrigerated beer and wine to be sold in liquor stores, died in Committee. And last month, a federal appeals court in Kentucky ruled that the state’s ban on grocery store sales of wine and liquor was constitutional. The court said that the state had every right to ban such sales, “just as a parent can reduce a child’s access to liquor.” The grocers who filed the original challenge to the law are reviewing rehearing and appeal options now.

If you have any questions about where wine can be sold, contact one of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·


Kate Hardy Joins Strike & Techel!

February 12, 2014

We are pleased to announce that Kate Hardy has joined the firm as a partner. Kate joins Strike & Techel from Nixon Peabody LLP’s Beverage Alcohol Group. Previously, Kate spent four years as manager of the Economy and Law Commission for the International Organization of Wine and Vine (OIV) in Paris, preceded by years of law practice in Australia. We are thrilled to add Kate to the Strike & Techel team!

Kate’s many years of beverage industry experience will be invaluable to wineries, breweries, distillers, suppliers, importers, distributors, retailers, ecommerce providers and other industry members that make up the diverse Strike & Techel client base. To learn more about Kate and the firm, visit strikeandtechel.com.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·


TTB Updates its Position on Gluten-Free Label Claims

February 11, 2014

On Tuesday, the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) issued an Announcement regarding its treatment of “gluten-free” claims on alcoholic beverage labels. As we previously blogged here, TTB has been looking into the issue of gluten-free labeling since at least 2012, and TTB Ruling 2012-2 implemented a policy of allowing the term “gluten-free” only on the labels of products that are produced without any ingredients that contain gluten. For products made from gluten-containing materials, the 2012 Ruling implemented several requirements, including: a) a statement that the product is “Processed or Treated or Crafted to remove gluten;” b) a qualifying statement to inform consumers that (i) the product was made from a grain that contains gluten, (ii) there is currently no valid test to verify the gluten content of fermented products, and (iii) the finished product may contain gluten; and, c) a detailed description of the method used to remove gluten from the product.

TTB explains in its most recent announcement that it has finished its review of the FDA’s rule on gluten-free labeling, and has updated its requirements accordingly. TTB will continue to allow the term “gluten-free” only on the labels of products that are produced without any ingredients that contain gluten. However, for products made from gluten-containing materials, TTB has lessened the labeling requirements, and now provides that such products may be labeled with a statement that the product was “processed, “treated” or “crafted” to remove gluten, if that claim “is made together with a qualifying statement that warns the consumer that the gluten content of the product cannot be determined and that the product may contain gluten.” Labels no longer require a detailed description of the method used to remove gluten from the product.

If you have any questions about alcoholic beverage labeling, contact one of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved ·


Dan Kramer Featured in The San Francisco Examiner!

February 03, 2014

Strike & Techel’s own Dan Kramer was featured in an article in Sunday’s San Francisco Examiner. Dan was interviewed for the article “Want to be in the booze business in SF? Better know the law” in which he discusses his experience in the alcoholic beverage industry, including the complications and expenses of obtaining a retail license in San Francisco, California promotional issues, as well as distribution and direct shipping. As Dan pointed out, alcoholic beverage legal issues can not only be complicated, but they are often not on people’s radar as they venture into the industry. If you’re just getting started in the industry or have any questions about retail licensing, distribution, direct shipping, or just about anything else in the industry, call Dan or one of the other attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved


Getting Started in the Business: Entity

January 15, 2014

This blog entry is part of a continuing series discussing important steps to get started in the alcoholic beverage industry. In addition to choosing a location for your business (discussed in a previous post, here), and before you prepare the applications to obtain the license(s) required to operate your business (discussed in a previous post, here), you will also need to consider what type of business entity should be formed in order to operate your business.

We usually counsel clients to hold their alcoholic beverage license under an entity, rather than as an individual. Formation of an entity that is separate and distinct from its owners offers protection against certain liabilities and may be advantageous from a tax perspective.

The type of entity (e.g., corporation, limited liability company, trust, etc.) and the domicile (state) of the entity can impact how the entity is taxed. Your tax advisor may have an opinion on these issues. If the entity is not domiciled in California and you intend to apply for a California ABC license, the entity will have to qualify to do business in California before you can file your applications. You may also need to register a fictitious business name in the county in which your business will operate and obtain a local business license(s).

In order to establish an entity in California, you will have to file Articles with the Secretary of State. You will also need to prepare corporate bylaws or an LLC operating agreement, depending on which type of entity you form. These documents are very important, as they set forth the specifics about ownership percentages, voting rights, profit distributions, etc. Bear in mind that certain changes in ownership, such as added shareholders/LLC members can affect your alcohol licenses. It is wise to consider carefully who will be an owner of the business entity and whether any ownership changes are likely to occur before submitting your license applications.

Contact one of the attorneys at Strike & Techel if you have questions relating to forming a business entity in order to get started in the alcohol beverage business.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2014 · All Rights Reserved


Getting Started in the Business: Licensing

December 12, 2013

This blog entry is part of a continuing series discussing important steps to get started in the alcoholic beverage industry. Once you have pinpointed a location for your business (discussed in a previous post, here), you will need to obtain a license, or a combination of licenses, before you commence operations. To determine what type(s) of license(s) you need, here are some answers to questions you may be asking:

* Do the Tied-House Laws Permit Me to Hold the Licenses I Want? Federally and across all states, “tied house” laws generally prohibit the same person or entity from having an ownership interest in alcohol beverage businesses in more than one of the 3 tiers -manufacturing/importing, distribution and retail. (To learn more about tied house laws, review this post.) However, that restriction is far from absolute. Many statutory exceptions have been carved out of the 3-tier system to permit cross-tier licensing and the resulting patchwork of exceptions can be difficult to comprehend. For example, in California, wineries can also own restaurants (subject to restrictions) and certain off-sale retail stores. Small breweries (less than 60,000 barrels/year) can own on-sale retailers but large breweries cannot. Beer and wine wholesalers cannot also be retailers, unless they sell only wine through the retail store. Other states have their own set of hard-to-explain exceptions.

* What Does My License Permit Me to Do? The general rule is that manufacturers sell to wholesalers; wholesalers sell to retailers; and retailers sell to consumers. But this, too, is riddled with exceptions. California wineries and breweries can sell their products directly to retailers and consumers without using a distributor, but distilled spirits manufacturers can sell only to distributors and cannot themselves hold a distributor license. Rectifiers, on the other hand, can act as their own distributor and sell their products – and spirits products made by anyone else – directly to retailers. Moreover, you may need more than one license to operate your business. For example, if you are going to be operating a distillery, you will need a Type 4 (Distilled Spirits Manufacturer’s license), and a Type 6 (Still) license. If you are importing distilled spirits from outside of California and distributing them to retailers you’ll need a Type 12 (Distilled Spirits Importer), and a Type 18 (Distilled Spirits Wholesaler). California issues dozens of different licenses so it is important to know exactly what you want to do, which licenses are needed to accomplish it, and whether you are eligible to hold them.

* What are the Processing Times to Obtain a License? In California, it takes about 90-120 days to process an application for a new license, and slightly less time to transfer an existing license at a premises that is already licensed. It will take longer to process an application that is incomplete, contested by neighboring residents or the local authorities, or filed incorrectly. Also keep in mind that the ABC cannot issue a license until it has received confirmation from the City/County that all required use permits have been obtained. Each applicant will be assigned a local ABC investigator to handle the application until the process is completed. Currently, U.S. Alcohol Tobacco Tax Trade Bureau (“TTB”) licenses are processing in about 90 days, similar to California licenses.

* May I Obtain a Temporary Permit? Provided that you are transferring an existing license at an already licensed premises, the California ABC may grant a temporary permit so you may operate your business while the license transfer application is being processed. A temporary permit is not available in connection with applications for new licenses or applications to transfer existing licenses to a premises that has not been previously licensed.

* What Are the Costs Involved? Depending on what type(s) of license(s) applied for, the cost can vary considerably. A schedule of license costs is available here. Some retail licenses are limited in numbers and must be purchased on the open market. Prices for these licenses vary greatly by type and location. For instance, a Type-47 (On-sale general eating place) may sell for $200,000 in San Francisco, whereas the same type of license in Fresno County currently only costs $12,000.

In conjunction with your ABC application, you may also need to obtain other federal, state or local licenses/permits. In California this may include, for example: federal licenses through the TTB; a certification from the Secretary of State that you are qualified to do business in the state; and a sales tax permit from the State Board of Equalization.

Contact one of the attorneys at Strike & Techel if you have questions about applying for a license to get started in the alcohol beverage business.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Wine Growlers From a Keg

October 29, 2013

Keg wine is a growing trend. Packaging and selling wine in kegs has a lot of advantages. Wine kegs are refillable and reusable. Wineries save on packaging costs, and restaurants enjoy the convenience of serving many customers without constantly uncorking bottles.

Alcohol laws dictating permissible containers and packaging for wine are expanding in concert with retailer and consumer interest in keg wine. For example:

- Effective July 1, 2013, Florida allows the sale of wine in 5.16 gallon canisters, which can be tapped like kegs, to restaurants and bars.

- Effective April 1, 2013, Oregon allows any wine shop, grocery store, wine bar or restaurant to buy wine by the keg and resell it to consumers by the glass, or in some establishments, consumers can fill their own containers in a size that is 2 gallons or less.

Most states continue to have restrictions on this “growler” type of service by a wine shop. Those restrictions comport with federal rules saying that packages cannot be filled with wine except at a winery or at a “tax paid bottling house.”

We expect to see more legislation in the coming months and years if this trend continues.

If you have any questions about keg wine, feel free to consult one of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Clarifications from the ABC on Sweepstakes and Contests in California

October 17, 2013

On June 13, 2013, guests attending ShipCompliant’s “Direct 2013” conference heard from Matthew Botting, General Counsel to the California ABC, on supplier participation in sweepstakes and contests under California’s new law. We’ve previously blogged about the new law here and here.

California Code of Regulations Title 4, Section 106 (“Rule 106”) has always allowed suppliers to “sponsor” a contest, meaning suppliers could give money or otherwise participate when the contest was organized by “bona fide amateur or professional organizations.” Previously, the privilege was limited. Now, the privileges are broader: suppliers (including wineries) can now “conduct” a contest under recently enacted Business and Professions Code Section 25600.1, and conduct or sponsor a sweepstakes under 25600.2. Mr. Botting discussed the different available privileges and their limitations:

* “Conduct” means the promotion is managed and organized by the supplier.
* “Sponsor” means it is someone else’s sweepstakes or contest and the supplier is providing a prize or other sponsorship of the promotion.
* For the time being, suppliers can only sponsor a contest in accordance with the existing Rule 106, which means sponsorship is limited to a contest conducted by bona fide amateur or professional organizations.
* Sponsoring a sweepstakes and conducting a sweepstakes or contest is now covered by Business and Professions Code Section 25600.1 and 25600.2. Sweepstakes or contests cannot require a visit to a licensed premises of any kind, so there must be an alternate method of entry (“AMOE”) if entry forms are available at a licensee.
* Sweepstakes and contests cannot be conducted on retail premises (e.g., a grocery store, liquor store, bar or restaurant). A “retail premise” includes some locations you might not think of, such as: an unlicensed premises if a licensed caterer is present, or at an event held by a nonprofit under a one-day permit. The ABC considers events held with a caterer’s license or a nonprofit one-day permit to occur “at the premises of a retail licensee,” and therefore a supplier may only provide a means of entry at either of these types of events.
* While suppliers may provide a means of entry for the contest or sweepstakes, the contest or sweepstakes may not be conducted at a winery or brewery’s duplicate tasting room.
* A contest or sweepstakes can only be advertised at a retailer if it is advertised at a minimum of three different retailers, and winners shouldn’t be picked at a licensed retail event nor in a tasting room.

The full presentation by Mr. Botting can be seen here (starting at the 5:00 minute mark).

Before conducting or sponsoring any contest or sweepstakes, be sure to consult the relevant laws, Business & Professions Code Sections 25600.1, 25600.2, and, if applicable, Rule 106 (regarding contests), and pay particular attention to whether the supplier involved holds a license that allows it to participate.

Contact one of the attorneys at Strike & Techel if you have questions about contests and sweepstakes in California or other states.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Clarifications from the ABC on Sweepstakes and Contests in California

October 10, 2013

On June 13, 2013, guests attending ShipCompliant’s “Direct 2013” conference heard from Matthew Botting, General Counsel to the California ABC, on supplier participation in sweepstakes and contests under California’s new law. We’ve previously blogged about the new law here and here.

California Code of Regulations Title 4, Section 106 (“Rule 106”) has always allowed suppliers to “sponsor” a contest, meaning suppliers could give money or otherwise participate when the contest was organized by “bona fide amateur or professional organizations.” Previously, the privilege was limited. Now, the privileges are broader: suppliers (including wineries) can now “conduct” a contest under recently enacted Business and Professions Code Section 25600.1, and conduct or sponsor a sweepstakes under 25600.2. Mr. Botting discussed the different available privileges and their limitations:

* “Conduct” means the promotion is managed and organized by the supplier.

* “Sponsor” means it is someone else’s sweepstakes or contest and the supplier is providing a prize or other sponsorship of the promotion.

* For the time being, suppliers can only sponsor a contest in accordance with the existing Rule 106, which means sponsorship is limited to a contest conducted by bona fide amateur or professional organizations.

Sponsoring a sweepstakes and conducting a sweepstakes or contest is now covered by Business and Professions Code Section 25600.1 and 25600.2Sweepstakes or contests cannot require a visit to a licensed premises of any kind, so there must be an alternate method of entry (“AMOE”) if entry forms are available at a licensee.

* Sweepstakes and contests cannot be conducted on retail premises (e.g., a grocery store, liquor store, bar or restaurant). A “retail premise” includes some locations you might not think of, such as: an unlicensed premises if a licensed caterer is present, or at an event held by a nonprofit under a one-day permit. The ABC considers events held with a caterer’s license or a nonprofit one-day permit to occur “at the premises of a retail licensee,” and therefore a supplier may only provide a means of entry at either of these types of events.

* While suppliers may provide a means of entry for the contest or sweepstakes, the contest or sweepstakes may not be conducted at a winery or brewery’s duplicate tasting room.

* A contest or sweepstakes can only be advertised at a retailer if it is advertised at a minimum of three different retailers, and winners shouldn’t be picked at a licensed retail event nor in a tasting room.

The full presentation by Mr. Botting can be seen here (starting at the 5:00 minute mark).

Before conducting or sponsoring any contest or sweepstakes, be sure to consult the relevant laws, Business & Professions Code Sections 25600.1, 25600.2, and, if applicable, Rule 106 (regarding contests), and pay particular attention to whether the supplier involved holds a license that allows it to participate.

Contact one of the attorneys at Strike & Techel if you have questions about contests and sweepstakes in California or other states.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Federal Department of the Treasury Alcohol and Tobacco and Tax and Trade Bureau (‘TTB’) Shut Down

October 01, 2013

Effective October 1, 2013 TTB has suspended operations as part of the federal government shutdown. TTB.gov remains operable and industry members can continue to file electronic payments and returns for federal excise taxes online. However, all E-applications including Permits Online, Formulas Online and COLAs Online are unavailable. Please refer to the TTB’s cessation notice here.

What does this mean for Industry Members? The short answer is that processing times will slow or stop until funding has been restored. It is still too soon to tell what the long term impacts will be, but in the short term we anticipate significant delays in the issuance of basic permits, label approvals and formula approvals. We’ll keep you posted as the situation develops.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


California On Sale General Public Premises (Type 48) Licensees Must Post Human Trafficking Notificat

September 24, 2013

To raise awareness and provide resources to potential victims of human trafficking, California Civil Code Section 52.6 now mandates that, as of April 1, 2013, all On Sale General Public Premises (Type 48) retail licensees, along with certain other types of businesses, must post a notice about human trafficking. The United States Department of State estimates that 14,500-17,500 victims are trafficked into the United States each year, with California as one of the country’s top four destination states.

The notice must be posted in a conspicuous place (near the public entrance or in clear view of the public and employees), measure at least 8.5 inches by 11 inches, and the following message must appear in at least size 16 font:

“If you or someone you know is being forced to engage in any activity and cannot leave—whether it is commercial sex, housework, farm work, construction, factory, retail, or restaurant work, or any other activity—call the National Human Trafficking Resource Center at 1-888-373-7888 or the California Coalition to Abolish Slavery and Trafficking (CAST) at 1-888-KEY-2-FRE(EDOM) or 1-888-539-2373 to access help and services. Victims of slavery and human trafficking are protected under United States and California law.

The hotlines are:

Available 24 hours a day, 7 days a week.
Toll-free.
Operated by nonprofit, nongovernmental organizations.
Anonymous and confidential.
Accessible in more than 160 languages.
Able to provide help, referral to services, training, and general information.”

This notice must be in English and Spanish, and a model notice is available here. Depending on the county, the notice may also be required in another language. A list of those counties is available here.

For more information on this posting requirement, call the Victim Services Unit at the California Attorney General’s Office toll free: (877) 433-9069.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Facebook Eases Restrictions on Promotions Conducted on Commercial Facebook Pages

September 11, 2013

On August 27, 2013, Facebook announced changes to make it easier for businesses to create and administer promotions on the website. This means any business - including alcohol beverage industry members - can now collect entries for sweepstakes or contests using Facebook itself. Prior to these changes, all promotions on Facebook had to be administered through applications. Now, promotions can be administered on Page Timelines or in applications, though they may not be administered on personal Timelines. For example, now it is possible for businesses to:

- Collect entries by having users post on the company’s Page or comment/like a post

- Collect entries via messages users send to the company’s Page

- Have promotions including a voting element based on likes

You can read more about the changes here. If you have any questions about the ins and outs of using social media as part of the business marketing and promotional plans for companies in the alcohol beverage industry, call one of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Winery Direct Shipping Coming Soon to Montana

August 26, 2013

Starting October 1, 2013, Montana will allow the direct shipment of wine to Montana residents by wineries that hold a Direct Shipment Endorsement. Holders of a Direct Shipment Endorsement may sell and directly ship up to 18 nine-liter cases of wine annually to an individual in Montana who is at least 21 years of age. Any in-state or out-of-state winery that is already registered with the Montana Department of Revenue must pay $50 and file associated paperwork to receive a Direct Shipment Endorsement, and wineries not already registered with the state will be able to simultaneously register with the state and apply for a Direct Shipper Endorsement. Applicants must submit a signed affidavit that they will contract only with common carriers that agree that wine will be delivered only to an individual in Montana who is at least 21 years old and who signs upon receipt of the wine. Records may be due every month and every quarter, and must be held for state inspection for up to three years. All taxes must be paid quarterly and tax records submitted monthly (by the 15th date of the following month) to the Department of Revenue. If a holder of a Direct Shipment Endorsement uses a bonded wine warehouse for fulfillment purposes, the endorsement holder must file a written notice that includes the name and address of the warehouse. The state also requires pre-approval of all wine labels to be shipped into the state. Stay tuned as Montana will likely issue regulations and step-by-step instructions in the coming months.

If you have any questions about shipping wine directly to Montana residents, or residents of any other state, contact one of the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Kentucky Changes Alcohol Beverage Laws – Requires Out of State Shipper’s Licenses for Wine and Spiri

August 14, 2013

With the passage of Senate Bill 13 (“SB 13”), effective June 25, 2013, Kentucky modernized its alcoholic beverage laws in an effort to make them more effective and efficient for manufacturers, distributors and retailers alike. This modernization included consolidating licenses, simplifying the licensing process, and most importantly for out of state wine and spirits suppliers, it created an out of state shipper permit. Prior to the revisions, beer suppliers were required to hold a license to ship to Kentucky distributors but suppliers of distilled spirits and wine were not.

The new Out-of-State Distilled Spirits/Wine Producers/Supplier license application is available here: http://abc.ky.gov/License%20Applications%202013/outofstate.pdf

Three classes of the new Out-of-State Distilled Spirits/Wine Producers/Supplier license are available:

- Out of State Producer/Supplier for 50,000 gallons or more ($1,550 a year/$3,100 for 2 years);
- Limited Producer/Supplier for 2,001 to 49,999 gallons ($260 a year/$520 for 2 years); and
- Micro-Producer/Supplier for 2,000 gallons or less ($10 a year/$20 for 2 years).

Below are some of the other key changes ushered in by the passage of SB 13:

- Consolidates 88 different license types into 44, changing the names of the licenses and fees associated with each, but keeping unchanged the privileges afforded to the licensees. A few examples: A “Vintner” license is now a “Winery” license, a “Blender’s” license was eliminated and its privileges consolidated into the “Rectifier’s” license.
- Allows a two-year license term renewal for manufacturers and wholesalers, in addition to a one-year license option.
- Bundles together several non-quota retail-drink licenses.
- Creates a Transporter license, consolidating six former transportation-related licenses into one.
- Eliminates bond requirements for many license types
- Changes the licensing structure for microbreweries.

For more information on the changes to Kentucky’s alcohol beverage laws, visit the Kentucky Liquor Control’s information page at http://www.klc.org/UserFiles/files/KACOinfosheet.pdf

And of course, you can always call one of the attorneys at Strike & Techel if you have any questions about any of the changes to Kentucky’s alcohol beverage laws, or if you have any general questions about shipping to distributors in any state.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


California ABC Announces New License Authorizations

August 08, 2013

Looking for a California ABC retail license for a county in which none are available? You may be in luck! Every year, the California ABC issues a list of the counties in which new licenses – called “Priority” licenses—will be made available based on population growth in those counties. ABC Headquarters has just announced the authorization for the issuance of new on-sale general and off-sale general licenses for 2013 and new licenses are available in many California counties.

What is a Priority application?

California “General” retail licenses authorize the sale of beer, wine and distilled spirits. The number of General licenses that the ABC can issue in a county is restricted based on county population. If your county is already at its maximum, you can’t get a new General license from the ABC and instead must buy one from an existing licensee in your county, typically at a significant premium. However, in counties where growth has occurred, the ABC permits new General licenses within the county once per year during a ‘priority’ application period by allowing both new issuances of licenses in the county and intercounty transfers of licenses. An intercounty transfer means a business owner in the priority county can buy a General license on the open market anywhere in the state and transfer it in to the priority county. A person can apply for one of the priority General license spots in the county, or for one of the priority intercounty General license transfer spots, or for both.

Anyone that anticipates the need for an Off-Sale General Package Store License (Type 21), an On-Sale General Eating Place Restaurant License (Type 47), or a Special On-Sale General Club License (Type 57) within the next year in a county with licenses available should apply.

Licenses Available by County:

For a complete listing of licenses available by county, click http://www.abc.ca.gov/press/PR2013/PR13-23.pdf

2013 Filing Period:

ABC District Offices will accept in-person or mail-in priority applications from September 9-20, 2013. Mail-in applications must be postmarked September 20 or earlier in order to be accepted. If the Department receives more applications than licenses available (which it typically does), a public drawing is held. Applicants are typically notified two weeks later of their priority status. Once approved for priority, the applicant has 90 days to complete the full formal license application for the identified premises.

Fees:

Priority application fees are $13,800 for new general licenses and $6,000 for intercounty transfers. Only a certified check, cashier’s check or money order will be accepted, and it must be submitted with the priority application. Unsuccessful applicants’ fees will be refunded, less a $100 service charge, within 45 days of the drawing.

Residency requirements:

Every applicant must be a resident of California for at least 90 days prior to the drawing. The 90 day clock starts ticking upon registration with the California Secretary of State for corporations, limited partnerships, and limited liability companies. Individuals and partners must submit proof of California residency.

If you are interested in applying for a new on or off-sale general priority license, please feel free to contact the attorneys at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


TTB Issues Guidance on Social Media Advertising

July 09, 2013

The Alcohol and Tobacco Tax and Trade Bureau (“TTB”) recently released Industry Circular 2013-1, “Use of Social Media in the Advertising of Alcohol Beverages.” Most importantly, TTB dispels any notions that the advertising regulations in 27 CFR parts 4 (wine), 5 (distilled spirits), and 7 (malt beverages) don’t apply to social media, and confirms that those rules “apply to all advertisements… in any media, including social media.” The Circular goes on to address unique issues for advertising within specific social media platforms, including Facebook, Twitter, and YouTube.

TTB regulations define an advertisement as “any written or verbal statement, illustration, or depiction which is in, or calculated to induce sales in, interstate or foreign commerce, or is disseminated by mail, whether it appears in a newspaper, magazine, trade booklet, menu, wine card, leaflet, circular, mailer, book insert, catalog, promotional material, sales pamphlet, or any written, printed, graphic, or other matter accompanying the container, representations made on cases, billboard, sign, or other outdoor display, public transit card, other periodical literature, publication, or in a radio or television broadcast, or in any other media.” Content that qualifies as an advertisement must contain certain information, including a responsible advertiser statement that includes the name and address of the industry member responsible for the ad, as well as the product’s class, type, or distinctive designation. Certain content is also prohibited from appearing in ads, such as statements that are false, that disparage a competitor’s product, or that are obscene or indecent.

TTB’s Circular addresses how the advertising regulations apply to specific social media platforms. Particularly relevant points include the following:

- Facebook: A “fan page” constitutes one advertisement, so mandatory statements need to appear only once on a page, and should appear on the industry member’s “profile page;” rules on prohibited content apply to all material posted by the industry member, including material the industry member re-posts.

- Twitter: Mandatory statements are not required in each tweet, and instead must appear on the industry member’s profile page or equivalent.

- YouTube and other video-sharing websites: Videos that fit the definition of an advertisement must include mandatory statements within the actual video, not only on the page where the video is located.

- Blogs: Industry member blogs qualify as ads to which the rules on mandatory and prohibited content apply.

- Mobile Applications: Apps must include the company name or brand name of the product advertised.

The main take-away from TTB’s Circular is that industry members should monitor all social media channels to ensure that content complies with TTB regulations. Consult TTB’s guidance or call one of the attorneys at Strike & Techel for guidelines on advertising through a particular social media platform.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Texas ABC Releases Advisory on Third Party Marketers

June 23, 2013

The Texas Alcoholic Beverage Commission (“TABC”) just released Marketing Practices Advisory MPA056, available here, which addresses the use of third party advertisers and payment processors by out-of-state wineries that hold permits to ship direct to Texas consumers (“Direct Shippers”). The Advisory provides similar guidelines to those provided by the California ABC in its 2011 Industry Advisory, which we commented on here. The use of third party providers by wineries has been a hot topic since the release of the California advisory, but few states have provided guidance on the issue. Now that Texas has weighed in, it will be interesting to see if other states follow suit.

The TABC’s Advisory allows Direct Shippers to use third party service providers provided that certain conditions are met. As in California, the TABC’s touchstone is that the Direct Shippers remain in control. Key points include:

- Direct Shippers are always responsible for compliance with the TABC code and regulations, payment of taxes, and must remain “in control of the product and every stage of the transaction.”

- A third party provider may advertise wines and prices for a Direct Shipper.

- A third party provider may process an order for wine placed by a Texas consumer by redirecting the order to a Direct Shipper. The Direct Shipper may then accept or reject the order.

- Fulfillment should be managed by the Direct Shipper, and single packages containing bottles from multiple Direct Shippers are not allowed. Note: the TABC disfavors models where a third party provider acts as both an advertiser or payment processor and a warehouseman.

- A third party provider may collect payment once an order is accepted by the Direct Shipper, but the Direct Shipper must maintain control over the funds.

- There should be a written agreement between all Direct Shippers and their third party providers in order to demonstrate that the Direct Shipper remains in control. The TABC will ask a Direct Shipper for a copy of its agreement in the event that it has reason to investigate an arrangement with a third party provider.

We’ll keep you posted on any further developments on third party providers in Texas and other states. Call one of the attorneys at Strike & Techel if you have any questions about direct shipping or the use of third party providers.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


TTB Says Alcohol Content Can Move to the Back Label for Wine

June 10, 2013

Announced today, and effective August 9, 2013, the Alcohol and Tobacco Tax and Trade Bureau (the TTB) has announced changes to its labeling requirements for wine. Amending 27 CFR 4.32, the alcohol content for wine no longer must appear on the brand label, and instead it may be printed on the brand label or on other labels affixed to the bottle, including the back label. The TTB also amended 27 CFR 4.36 to the effect that wines with alcohol content of at least 7 percent and no more than 14 percent may still be labeled with either (a) the designation of “light wine” or “table wine” on the brand label, or (b) the numerical alcohol content of the wine. The new amendments do not permit the “light wine” or “table wine” designations to appear on any label other than the brand label. A new COLA is not required if the only change made to an approved label is the relocation of the alcohol content statement. If you have any questions about labeling, contact an attorney at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Taking Advantage of the California Sweepstakes and Contests Laws

May 14, 2013

As most alcohol suppliers are now aware, California added two new statutes this year permitting alcohol suppliers to conduct contests and sweepstakes that are open to California residents. California had long been the only U.S. state that prohibited alcohol suppliers from including its residents in these kinds of promotions, but that changed in January. We previously blogged about these new laws here. The new laws offer suppliers new avenues to conduct promotions in California but it’s important to note that only specifically listed types of supplier licensees are authorized to conduct contests and sweepstakes in California. Authorized licensees are: winegrower (Type 2 License), beer and wine importer general (Type 10 License), beer manufacturer (Type 1 License), out-of-state beer manufacturer certificate holder (Type 26 License), distilled spirits manufacturer (Type 4 License), distilled spirits manufacturer’s agent (Type 5 License), distilled spirits importer general (Type 13 License), distilled spirits general rectifier (Type 24 License), rectifier (Type 7 License), out-of-state distilled spirits shipper’s certificate holder (Type 28 License), brandy manufacturer (Type 3 License), and brandy importer (Type 11 License).

The statutes specifically exclude wholesalers (Type 17 and 18 Licenses) and retailers of all types. They also exclude beer and wine importer general (Type 10 License) and distilled spirits importer general (Type 13 License) licensees that hold “only a wholesaler’s or retailer’s license as an additional license.” So, although the laws include Type 10 and Type 13 importers, those licensees would be excluded if they also hold a wholesaler’s license and no other supplier license. Accordingly, holders of the popular 9/17/20 license combination, and holders of 10/17 and 13/18 combinations are not eligible to conduct contests or sweepstakes under the new provisions. The exception to this would be if they hold another specifically included license type, such as a winegrower’s license.

We received a number of calls from suppliers unclear on whether they are included in the new laws so we hope this post helps to clarify. If you have any questions about the contest/sweepstakes laws or other promotional activities, in California or elsewhere, contact an attorney at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Can Package Designs be Registered as Trademarks?

May 06, 2013

Alcoholic beverage products typically are sold in glass or plastic bottles or in aluminum cans. There are a few alternative packaging options, such as bag-in-box and Tetra-packs, but the beer and wine section at the grocery store is mostly full of bottles and cans. Suppliers distinguish their products from competitors’ products by creating unique brand names and label designs, both of which can be protected as trademarks. But what about the package itself? Can you register your bottle shape as a trademark? The answer is yes, if the design is distinctive and not merely functional.

U.S. trademark law (15 USC § 1052(e)(5)) provides that a proposed trademark cannot be registered if it “comprises any matter that, as a whole, is functional.” This applies to colors, sounds and also to package designs. The U.S. Patent & Trademark Office (“USPTO”) will not grant trademark registration, and the exclusivity that trademark registration provides, if it would foreclose competitors from using a design that is functional. A four-factor test was established to determine whether a container design is functional: 1) whether a utility patent exists that discloses the utilitarian advantages of the design sought to be registered; 2) whether applicant’s advertising touts the utilitarian advantages of the design; 3) whether alternative designs are available that serve the same utilitarian purpose; and, 4) whether the design results from a comparatively simple or inexpensive method of manufacture. Package designs commonly fail the functionality test based on at least one of the above factors because packages are inherently intended to be functional. But it is possible to incorporate design features into an otherwise functional package that are purely for aesthetics, such as the shape of the iconic Coca-Cola bottle, which has been a registered trademark for decades. However, designs that are functional, such as bottle designs that offer efficient stacking or pouring methods, might be subject to refusal based on the test detailed above.

The USPTO may also refuse to register a package design if it lacks inherent distinctiveness. Several factors must be considered in evaluating a design’s distinctiveness, including whether it: 1) is a “common” basic shape or design; 2) is unique or unusual in a particular field; 3) is a mere refinement of a commonly-adopted and well-known form of ornamentation for a particular class of goods; or 4) is capable of creating a commercial impression distinct from the accompanying words.

A recent opinion issued by the Trademark Trial and Appeal Board in In re Mars is a good illustration of the application of the above factors to a package design – a pet food container in that case. The pet food package was an inverted cylindrical container. The registration in that case was denied based on the factors discussed above, but many package designs have been successfully registered as trademarks, so if your package has a unique element or design, you may wish to consider protecting it as a trademark.

Contact one of the attorneys at Strike & Techel if you have questions about trademark registrations.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Recent California Statutory Revisions Clarify the Scope of Permissible Retailer Listings by Supplier

April 29, 2013

Effective January 1, 2013, California AB 2349 amended Business and Professions Code Section 25500.1 and repealed Section 25500.2. The two sections (25500.1 and 25500.2) were duplicative in that both permitted suppliers to list the names of two or more restaurants that carry their products. Section 25500.2 included beer, wine and distilled spirits suppliers, while 25500.1 pertained to suppliers of wine and brandy. The newly amended 25500.1 covers suppliers of beer, wine and distilled spirits. In addition to consolidating the two laws, the newly amended Section 25500.1 removes the requirement that the listed on-sale retailers be restaurants - suppliers can now list bars and clubs that do not serve food. The new Section 25500.1 also clarifies that suppliers can list “other electronic media” with the retailers’ names, addresses and websites, which would include the retailers’ twitter accounts, Facebook pages, and other social media forums.

The revised Section 25500.1 parallels the existing and unchanged Section 25502.1, which pertains to supplier listings of off-sale retailers. Section 25502.1 has not been revised to include “other electronic media” as a means to list the retailers’ information, but we believe it is intended to parallel the on-sale provisions of Section 25500.1. Note that the on-sale and off-sale statutes both include restrictions, e.g., the listings may not include retail prices; the supplier must list at least two unaffiliated retailers; and the retailer may not pay for the listing.

For information about these statutes or any other California trade practices questions, please contact any of the attorneys at Strike and Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


California Senate Bill Could Extend the Last Call for Alcohol

March 20, 2013

On March 11th, Senator Mark Leno introduced Senate Bill 635 which would allow California businesses to serve alcohol between the hours of 2 and 4 am. These extended hours would apply solely to on-sale premises such as restaurants, entertainment venues and nightclubs, and not to off-sale premises such as liquor stores or gas stations. SB 635 would allow California cities to join the ranks of other major U.S. cities such as New York City, Las Vegas, Chicago, Miami and Washington D.C., as well as numerous international cities and countries which permit late or continuous beverage service. At least nine other states have similar legislation in place.

Supporters of the bill argue the extended hours will increase tourism, tax revenue and jobs, and provide relief to law enforcement agencies and public transportation systems currently burdened by uniform closing times. Critics cite noise and various other public safety concerns that may arise from an additional two hours of boozing.

If SB 635 passes, cities and counties that want to extend their hours will be required to apply to the California Department of Alcoholic Beverage Control (“ABC”) for approval. Under the bill, the ABC is required to conduct a “thorough investigation into whether the additional hours would serve the public convenience or necessity.” Similar to the process of obtaining an alcoholic beverage license, the city or county would be required to notify residents, law enforcement agencies and other interested parties of their application. Interested parties would then have a 30-day period from the date of notice to file protests. The ABC would reject protests it deems unreasonable. For those with protests deemed acceptable, the ABC would provide an opportunity to address their concerns in a hearing.

Even if the bill becomes law, our experience with “public convenience or necessity” determinations and neighbor protests tends to suggest an uphill battle for many licensees who would like to obtain a 4 a.m. closing time. We will see how the bill fairs in policy committee hearings this spring.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Beer Suppliers and Distributors May Now Preannounce Retail Visits in Texas

February 11, 2013

On February 7, 2013 the Texas Alcoholic Beverage Commission (“TABC”) issued an advisory, MPA053, entitled Promotional Activity Prearrangement/Preannouncement for Beer, which announces an amendment to 16 Tex. Admin. Code § 45.113, allowing beer manufacturers and distributors to prearrange and preannounce promotions at all on and off premise retail locations. Existing law (Tex. Alco. Bev. Code Ann. § 102.07(g)) permits distilled spirits and wine manufacturers and wholesalers to prearrange and preannounce promotional activities at retail premises (see MPB023), but beer manufacturers and wholesalers were excluded. Bar spending, sampling, appearances by agents, etc., could not be prearranged with the retailer or preannounced to consumers for beer; they had to be spontaneous. With this amendment, beer manufacturers and distributors are put on equal footing with spirits and wine suppliers and will be allowed to preannounce, or advertise, their promotional activities to consumers by means of email, TV, print, and digital media. These announcements may include event details, such as the date, time and location of the event. The amendment will enable beer manufacturers and distributors to more effectively prearrange their promotional activities.

The attorneys at Strike & Techel are available to answer questions about promotions and other industry trade practices.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


New Rules for Party Buses

January 03, 2013

Assembly Bill 45 became law January 1, 2013, and closes a loophole that held limousine operators, but not charter buses, responsible for underage drinking. The law requires chaperones and ID checks on party buses that carry both alcohol and underage passengers.

The law is also known as “the Studebaker Law,” named after Brett Studebaker, of Burlingame, who died in 2010 when he was 19 years old. Studebaker died in a collision on Highway 101 near San Mateo on his way home from San Francisco, when his car crashed into a barrier and then into another car. He had been drinking for several hours on a party bus, after which he was attempting to drive himself and another man home when the crash occurred. The passenger sustained serious injuries, but survived. Studebaker’s blood alcohol level was reportedly more than three times the legal limit for drivers over the age of 21.

Another incident which may have played a part in getting the bill signed occurred last summer and involved a party bus and a physical altercation between two young women, one of whom was underage. The bus was traveling from a concert at the Shoreline Amphitheatre in Mountain View to Santa Cruz on Highway 17. During the fight, the women fell out of the bus, which was traveling at 45 mph, and one of the women was run over and died.

The new law will require party bus companies to ask customers during booking whether there will be any passengers under 21 years of age and if there will be alcohol served. If so, the customer must designate a chaperone who is at least 25 years old to be present throughout the trip. The chaperone is responsible for making sure the underage passengers aren’t drinking. If at any time a minor is found drinking alcohol, the chaperone must inform the bus driver, and the trip must be terminated. The chaperone is then responsible for making sure the minors that were drinking alcohol get home or safely into the care of their parents.

The law also holds drivers accountable for verifying the age of passengers they suspect to be under 21. If there are underage passengers and there isn’t supposed to be alcohol onboard, the driver must check for alcohol if it is suspected. If the driver finds alcohol, then the trip must be terminated unless the alcohol is locked under the bus.

If party bus companies do not comply with the new law, they could face up to $2,000 in fines and their permits may be suspended for up to 30 days or revoked. Bus drivers and chaperones could face misdemeanor charges for noncompliance.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2013 · All Rights Reserved ·


Food Safety Modernization Act Facility Renewals Due Now

December 27, 2012

The Food Safety Modernization Act (“FSMA”) was passed into law in early 2011 and amends parts of the Federal Food, Drug, and Cosmetic Act. The act’s purpose, which we previously blogged about here, is to ensure that food produced in the U.S. or imported into the U.S. meets safety standards. The FSMA and related FDA laws include alcohol in the definition of “food,” and a “Food Facility” includes any “factory, warehouse, or establishment (including a factory, warehouse, or establishment of an importer) that manufactures, processes, packs, or holds food,” not including restaurants and other retail food establishments. Accordingly, many in the alcohol industry stand to be affected by the FSMA, including wineries, breweries, distilled spirits plants, alcohol beverage distributors, importers, warehouses, and wholesalers.

Prior to the enactment of the FSMA, Food Facilities were required to register with the FDA one time only, and no renewal was required. Food Facilities are now required to renew their FDA registrations every two years, and the first renewal is required by December 31, 2012. However, the FDA’s registration renewal website was not available on October 1, 2012, when renewal was scheduled to open, leaving many scrambling to meet the deadline. The FDA has not formally extended the renewal deadline, but it recently confirmed that it would “exercise enforcement discretion” through January 31, 2013. Specifically, the FDA’s guidance provides that “because there was a delay in FDA’s implementation of biennial registration renewal for the 2012 cycle, and registration renewal did not become available until October 22, 2012, FDA intends to exercise enforcement discretion with respect to registration renewals submitted to FDA after December 31, 2012 for a period of 31 days, until January 31, 2013.”

FDA renewals can be completed online, but a registrant’s FDA number and login information is required before the process can be completed. Detailed guidance on the FSMA and the renewal process is available here. Contact one of the attorney’s at Strike & Techel if you have questions about the FSMA.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·


TTB Allows Beer Returns Based on Freshness Dating

December 19, 2012

In response a request from industry members, the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) recently issued Ruling 2012-4, which addresses whether brewers may require wholesalers to pull beer from retailers that is past its freshness date and replace it with fresh beer. Many beers now include freshness dates, and some brewers ask distributors to remove beer from the retail market that is past its freshness date. Brewers argue that this ensures that consumers get fresh product, but the practice is arguably at odds with laws prohibiting consignment sales.

The FAA act makes it unlawful for industry members, including beer producers, importers, and wholesalers, to sell, offer for sale, or contract to sell to any retailer on consignment, under conditional sale, with the privilege of return, or on any basis otherwise than a bona fide sale. See 27 U.S.C. § 205(d). There are limited exceptions to this prohibition, but only for those “ordinary and usual commercial reasons” included in 27 C.F.R. §§ 11.32 – 39. The limited exceptions when an industry member may accept a return include: a) defective product, b) shipment error, c) change in law preventing the sale of a product, d) termination of the buyer’s business or franchise, e) change in product from that held in inventory, and f) possible spoilage of product during the off-season of a seasonal retailer.

None of the exceptions to the consignment sales law clearly applies to returns based on freshness dating, thus prompting the TTB’s Ruling. The Ruling makes clear that under certain conditions, returns based on freshness dating are permitted under the exception for “defective products” found in 27 C.F.R. § 11.32. Those conditions are as follows:

- The brewer has policies and procedures in place that specify the date after which the retailer must pull the product;

- The brewer’s freshness return/exchange policies and procedures are readily verifiable and consistently followed by the brewer;

- The container has identifying markings that correspond with this date; and

- The malt beverage product pulled by the retailer may not re-enter the retail marketplace.

Finally, the TTB noted that wholesalers may not force retailers to overstock the wholesaler’s products under the pretext that the retailer may exchange product based on the freshness date, and that such practices would violate consignment sale and tied-house laws.

Contact one of the attorneys at Strike & Techel if you have any questions about TTB rules and regulations.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·


Strike & Techel Welcomes Dan Kramer, Linda Gago-Seco and Manny Diaz

December 12, 2012

Strike & Techel is pleased to announce three recent additions to its alcoholic beverage licensing practice.

Daniel Kramer joins Strike & Techel as a partner. Mr. Kramer represents local and national hotel, restaurant and general retail companies in all aspects of alcoholic beverage licensing, including license acquisitions and transfers, entity structuring, and the preparation of concession agreements, interim management agreements, and restaurant purchase and sale agreements.

Linda Gago-Seco joins Strike & Techel as a paralegal. Ms. Gago-Seco has spent the last 14 years as an alcoholic beverage licensing specialist and previously worked for the California Department of Alcoholic Beverage Control.

Manny Diaz joins Strike & Techel as a consultant. Mr. Diaz previously worked for the California Department of Alcoholic Beverage Control for over 30 years, including as Assistant Director of the Northern Division, before becoming a licensing consultant.

We are thrilled to have Dan, Linda and Manny join us.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·


What Can I Do With the Type 85 ABC License?

April 20, 2012

We’ve been getting lots of inquiries about the privileges and limitations of the new limited off-sale license offered by the ABC. Though we’ve already commented on the basics of the permit here, we’re following up with answers to the clarification questions we’ve been getting:

Where can I find the privileges for the new off-sale wine license?

Read the ABC Advisory and the enabling statute CAL. BUS. & PROF. CODE §23393.5.

Can I sell tequila and beer with the Type 85?

No, the privilege is limited to wine.

Can I get the Type 85 license if I have an upper-tier California license?

No. The Type 85 is a retail-tier license, and there are no special exceptions permitting it to be held with an upper-tier license. On the flip side, you can get it if you are an employee of an on-sale retailer. This is a key distinction between the Type 85 and the Type 17/20 combination that remains popular in California.

Can I deliver product stored out-of-state directly to consumers in California with the Type 85?

No. You must have possession and title to the wine in California. It must be delivered to the consumer from your licensed premises in California or the premises of a licensed public warehouse (Type 14 License).

Can I deliver wine to consumers outside of California with the Type 85?

Yes, but only to about 13 states. 2/3 of those states require additional licensing. You can’t reach New York, Texas, Illinois or Florida.

Do I have to have a location to obtain the Type 85?

Yes. You have to choose an address where the license will be active and your records will be kept. It may not be open to the public. You will have to post notice at the premises and mail notice to nearby neighbors.

Who can I buy wine from with the Type 85?

Licensed California wholesalers and wineries. Not retailers.

How do I apply for the Type 85?

If you are interested in obtaining the license, you need to fill out the forms for an original retail license (e.g. ABC 211-SIG, 217, 208-A/B, 253, 257, 255, 247, 251, 140, entity forms). You can obtain them from the ABC website, or can hire an attorney or licensing specialist to complete them and assist you with the process. The filing fee is $342 ($100 application fee plus $242 annual fee).

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·


San Francisco ABC Office Temporarily Moving in January

January 03, 2012

The San Francisco ABC office will be moving to Oakland this month to allow for remodeling efforts at the San Francisco office. The current San Francisco office, located at 71 Stevenson St. will be closed beginning at 5 p.m. on Friday, January 20, 2012. They will re-open at their temporary Oakland location on Monday, January 23, 2012. The temporary office contact information is:

Department of Alcoholic Beverage Control

1515 Clay Street, Suite 2208

Oakland, CA 94612

(510) 622-4970

Be sure to update your records and plan accordingly if you need to contact the San Francisco ABC office. It is anticipated that the office will move back into San Francisco in March 2012, but construction delays may extend the moving date. We will keep you posted as new information arises.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2012 · All Rights Reserved ·


California Grocers Association Challenges ABC Advisory on New Self-Checkout Ban

December 29, 2011

On January 1, 2012, California Business and Professions Code Section 23394.7 goes into effect, which aims to regulate alcohol sales at self-checkout terminals. The controversial law provides that “no privileges under an off-sale license shall be exercised by the licensee at any customer-operated checkout stand located on the licensee’s physical premises.” The law has been opposed since its inception by grocery stores with self-checkout and has been supported by retail clerks labor unions, among other entities.

The California Alcoholic Beverage Control issued an Industry Advisory to explain the new law last week, and the California Grocers Association (“CGA”) just filed a petition contesting the terms of the Advisory. For example, the Industry Advisory provides in part, “it is clear that ‘customer-operated checkout stand’ means a checkout stand or station that is designated for operation by the customer.” In its petition in the California Third District Court of Appeal, the CGA argues that the ABC overstepped its regulatory authority by defining one of the law’s key provisions in the Advisory, rather than going through the formal rule-making process required by the California Administrative Procedure Act. The CGA also argues that the definition put forth by the ABC is inconsistent with the statute. The CGA has asked that the Advisory be set aside, or that its effect at least be delayed until the issue has been resolved. Check back for updates!

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2011 · All Rights Reserved ·


Win Fabulous Cash and Prizes!!!**

September 30, 2011

** Unless you live in California

Alcoholic beverage companies often sponsor sweepstakes and contests with prizes ranging from elaborate vacations to concert tickets to spa days. Do you know who can enter these contests and sweepstakes? Anyone in the U.S except a Californian.

California is the only state to specifically prohibit alcoholic beverage companies from sponsoring sweepstakes and contests with exciting prizes. Seriously, the only one. Adding insult to injury, companies that do not sell alcoholic beverages are welcome to offer contests and sweepstakes to Californians.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2011 · All Rights Reserved ·


No More Alcopops in California

August 03, 2011

On Monday Governor Jerry Brown signed Senate Bill 39 banning the production, importation, and sale of beer to which caffeine as a separate ingredient has been directly added. Senator Alex Padilla, a Democrat from the San Fernando Valley, introduced the Bill last December. In order to enforce the prohibition, licensees may be required by the California Department of Alcoholic Beverage Control to provide product formulas. All formulas provided will be considered confidential trade secrets and not subject to disclosure under the California Public Records Act. The new law can be found in Section 25622 of California’s Business and Professions Code. The law does not prohibit beers where caffeine is a part of the brewing process itself, such as a coffee porter. It is aimed instead at the Progressive Adult Beverages (PABs) (also commonly referred to as Ready to Drinks (RTDs) and Flavored Alcoholic Beverages (FABs)) that have been in the news since last fall. See our prior coverage here, here, here, and here. This puts California in line with states like New York, Massachusetts, Washington, Michigan, Kansas, and Utah, which have also banned such beverages.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


Spirits Tastings Approved In Tennessee

June 27, 2011

Earlier this month, Tennessee became the 35th state to allow spirits tastings, with the passage of Senate Bill 1224, which will permit restaurants, bars, and liquor stores to offer limited alcohol sampling. The bill, which was signed into law on June 10thand is codified at Tennessee Code Annotated Section 57-3-404(h)(2), will allow spirits retailers to conduct tastings for “sales, education, and promotional purposes.” Similar to tasting laws in most other states, spirits wholesalers may not take part in the events, and are specifically precluded from directly or indirectly providing any “products, funding, labor, support or reimbursements to a retailer.” The Tennessee Alcoholic Beverage Commission will be establishing rules specifying how tastings must be conducted.

Tennessee is among a growing list of states that have authorized limited tastings since 2009, joining California, Maine, Michigan, New Jersey, Vermont, Virginia, and Washington.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


SF ABC Stops Accepting Walk-in Applications

April 05, 2011

The SF office of the California Alcoholic Beverage Control informed us today that they are no longer accepting walk-in applications. This means that you must call the SF ABC to make a filing appointment and then mail-in your application. Be sure to plan ahead for the additional time this may take.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


TTB Considers New Grape Varieties for American Wines

February 10, 2011

Only a grape variety name approved by the TTB may be used as a varietal “type” designation for American wine. The TTB is considering adding more than 50 names to their list of approved varietals to catch up with the explosion of U.S. wines made from obscure grape varietals. The full list of varietals up for public comments is here.

Some of the proposed varietals are not so obscure (e.g. Blaufränkisch, Carignan, Garnacha, Grenache blanc, Grüner Veltliner, Lagrein, Vermentino), but others are extremely unusual, particularly the submissions from the Minnesota Grape Growers (Louise Swenson, Sabrevois, St. Pepin), which highlighted the cold-weather resiliency of the grapes

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


California ABC Stakeholder Meeting

February 08, 2011

Last week, partners Barry Strike and Kristen Techel attended the California ABC’s annual Stakeholder Meeting in Sacramento. The meeting covered everything from furlough status and budget to planned action items for 2011 and 2012. Stakeholder working groups were established to further investigate and provide recommendations to the new ABC Director, Jacob Appelsmith. The four groups will cover issues related to Third Party Providers, Brands and Trademarks and other Things of Value, Licensing Process and Industry Training, and Public Convenience or Necessity.

Interestingly, during the meeting Matt Botting, General Counsel to the ABC, indicated they had not seen many applications for the new tasting permit for off-sale retailers, which we originally discussed here and here. If you’re interested in learning more about or applying for the new instructional tasting license, please feel free to contact any of the attorneys here at Strike & Techel.

Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·


IMBIBE+BLOG

May 30, 2010

Welcome to IMBIBLOG, the blog of Strike & Techel. We are attorneys specializing in the laws and regulations governing alcoholic beverages, also known as liquor law or alcohol law. Liquor law is a specialized area of legal practice. Compared to other areas of legal specialization, there are relatively few lawyers specializing in alcoholic beverage law. If you are considering starting a business related to alcohol, you will benefit from working with a competent liquor lawyer.

The team at Strike & Techel is experienced and can serve as your TTB lawyer, ABC lawyer, beer lawyer, wine lawyer or distilled spirits lawyer. We are familiar with TTB law as well as state ABC law in California and across the country. Preparing and applying for the necessary alcohol beverage licenses is a big part of the alcohol beverage practice and Strike & Techel is highly experienced with ABC license applications and TTB license applications.

We are based in San Francisco and are particularly familiar with the alcohol laws and regulations of our city. The attorneys at our firm practice alcoholic beverage law exclusively. This blog is our place to tell you about current issues of interest for those in the business of making, promoting, and selling alcoholic beverages.


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