(IMBIBE+BLOG)

California Business and Professions Code Section 23393.5 went into effect on January 1, 2012, authorizing the state’s new limited off-sale wine license.   The new “Type 85” license, which we first discussed here, will allow licensees to make direct sales of wine to consumers over the internet and via direct mail and telephone, without requiring the licensee to maintain a brick and mortar retail location or to hold a beer and wine wholesaler license.  Up until now, businesses looking to focus on internet wine sales have been required to obtain both an off-sale beer and wine retail license and a beer and wine wholesaler license, commonly referred to as a 17/20 license combination.  With a 17/20 combination, licensees are able to sell wine via the internet, but also must meet the requirements of a wholesaler licensee, including selling wine to other retailers.

The California ABC recently posted an Industry Advisory on the new off-sale wine license.  The advisory makes clear that Type 85 license holders may not maintain a brick and mortar store that is open to the public, and all sales must be made via direct mail, telephone or the internet.  Additionally, the ABC confirmed that the new license alleviates the need for a beer and wine wholesaler license for retailers focused on selling wine via the internet, but the ABC will continue to process applications for 17/20 license combinations.  If you would like more information about the license, please feel free to contact any of the attorneys at Strike & Techel.

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

Priority application season is upon us, beginning September 12^th.  ABC Headquarters recently announced the authorization for the issuance of new on-sale general and off-sale general licenses in certain counties.

What this means:

General licenses authorize the sale of beer, wine and distilled spirits. They are restricted based upon 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 here.

2011 Filing Period:

ABC District Offices will accept in-person or mail-in priority applications from September 12-23, 2011. Mail-in applications must be postmarked September 23 or earlier in order to be accepted. If the Department receives more applications than licenses available (which it will), 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 CA 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 © 2011 · All Rights Reserved ·

Nobody hopes for an audit, but like cold cloudy summers in San Francisco, they’re bound to happen. Ideally, if you’re selected for an audit by the Alcohol and Tobacco Tax and Trade Bureau (“TTB”), you will have already been following the federal requirements. To aid in compliance, last March the TTB issued a tutorial about the common issues found during TTB audits, which is available here. As the ramp up to harvest begins, this is a good resource to circle back with to ensure compliance. Within the tutorial the TTB listed the most common compliance issues by area, and within that by frequency of occurrence. Further, they provided helpful tips on how to avoid problems in those areas. The issues most frequently seen by the TTB’s Tax Audit Division are:

Records:

General record keeping;

Transfer in bond record;

Tax paid removal records; and

Export documentations.

Inventory:

Inventory timing, records and signature;

Inventory losses and loss limits; and

Records of bottled or packed wine.

Reporting and Tax Payment:

Timely filing the Report of Wine Premises Operations and correctly completing the form;

Calculating and paying tax on wine;

Filing claims for wine or spirits lost or destroyed while in bond;

Tax payment and filing TTB F5000.24 Excise Tax Returns; and

Signature authority.

Basic Permit, Registration and Bond:

Filing amended applications to report changes; and

Maintaining adequate bond coverage.

If you would like assistance with a TTB audit or help with TTB compliance matters, 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 © 2010-2011 · All Rights Reserved ·

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 ·

 The typical license for a winery in California is a Type 02 Winegrower license, but many businesses interested more in marketing wine, or having wine custom crushed to their specifications, instead of actually producing the wine on a bonded wine premises, obtain a combination Type 17/20 license instead.  The Type 17 license is a wine and beer wholesaler license, and the type 20 is a retail license for the sale of wine and beer for consumption off the licensed premises.  When the licenses are held together, they allow the sale to retailers and consumers of wine only.  The combination license does not allow the holder to produce wine.  Significantly, California law was changed in 2009 to permit these 17/20 license holders (sometimes called “virtual wineries”) to donate their wines to non-profit organizations.  This privilege, previously reserved to licensed producers and importers, enables virtual wineries to participate in wine tastings and other events held by non-profit organizations.  The 17/20 license structure and abundance of wineries that do custom crush production in California have made it relatively easy for virtual wineries to succeed and, as a result, we have seen tremendous increases in the 17/20 license model over the last several years.       

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

Today the Alcohol and Tobacco Tax and Trade Bureau (TTB) launched their Permits Online system, which is available here. The system is a counterpart to the Formulas Online and COLAs Online systems. The Permits Online system allows the application procedure for federal alcohol and tobacco business permits to be completed entirely online. The system allows one to prepare, submit and track applications through the TTB’s online portal, available 24 hours a day, 7 days a week. But as with many technology innovations and advances, there is often a corresponding down side. A few weeks ago, the TTB announced that they are no longer accepting “Expedite Requests” or “Informal Reviews” for certificate of label approvals (COLAs) and formula approvals. The former expedite option allowed for rapid turnaround of approvals that was especially helpful for the industry at large.

With a dramatic increase in approval requests over the years, coupled with shrinking governmental budgets, the TTB decided that all applications will be reviewed on a first-come, first-served basis, without any expedite availability. Further, the TTB stated that applicants should plan for a full 90-day review period, which does not include any additional time that could be necessary if label or formula changes are requested. The TTB did note that online applications are processed about twice as fast as paper applications, so there is a real incentive to using the online portals. If you have an upcoming formula approval or COLA, be sure to factor in enough time for the TTB’s review given that the expedite option is no longer available. If you have questions about formula or label approvals, please feel free to call any of the attorneys at Strike & Techel.

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

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.