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In 2005, when Granholm v. Heald was decided by the Supreme Court, the doors to direct shipping wine to consumers opened wider than ever before. But the principles behind Granholm may open more than just the direct shipping avenue. Recently, a California winery stepped down this expanded path by opening a tasting room in Pennsylvania. Several states allow licensed wineries to operate satellite tasting rooms within the state. In Pennsylvania, limited wineries may operate, separately or in conjunction with other limited wineries, up to five additional tasting and off-premises sales locations within the state. No production or bottling is required at those five separate facilities. 47 Pa. Cons. Stat. § 5-505.2(a)(3). Virginia has a similar provision allowing licensed farm wineries to sell wine for on- and off-premises consumption at up to five additional retail locations. Va. Code Ann. § 4.1-207(5).

In order to become a licensed limited winery in Pennsylvania a winery must be producing wine from agricultural products grown in Pennsylvania. While this requirement seems to preclude an out-of-state winery from opening a tasting room in Pennsylvania, the Granholm court addressed this issue when it examined New York’s former requirement that only farm wineries, which can only produce wine from agricultural products grown in New York, were allowed the most direct avenue to ship wine to New York consumers. Granholm v. Heald, 544 U.S. 460, 476 (2005). In its decision the Court stated, “States may not enact laws that burden out-of-state producers or shippers simply to give a competitive advantage to in-state business.” Id. at 472. Thus, predicating the ability to open a tasting facility where direct sales are allowed on the production of wine solely from in-state grown agricultural products violates the principles of Granholm. In 2010 this exact issue came to heard in New Jersey when a law that allowed in-state wineries to sell directly to consumers from up to six salesrooms apart from the winery premises, while prohibiting out-of-state wineries from similar direct sales activities, was found to violate the dormant Commerce Clause. Freeman v. Corzine, 629 F. 3d 146, 159 (2010). While opening up facilities in other states is a large investment of time and capital that likely would not suit many wineries, it may be a viable strategy for some. Given the rapid changes over the last few years in new paths to consumers, keeping an open mind about ways to grow sales is always a good idea.

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

In just a few weeks, Kristen Techel, Partner at Strike & Techel, will be speaking at the Wine Law conference in Denver, Colorado. The two-day conference, presented by Law Seminars International, runs April 11^th-12^th and covers rules, regulations, challenges, and practical advice for the wine industry. Kristen Techel will be part of a panel discussion on social networking platforms entitled “The Brave New World of Internet Marketing: Establishing a Web Presence Utilizing Social Media” at 3 p.m. on April 12^th. Co-panelists include Benjamin Weinberg, Esq., Editor-in-Chief at Unfiltered, Unfined and Michael Lazlo, Esq., with Laszlo & Associates. The conference will be held at the Grand Hyatt Denver Hotel. If you will be attending the conference, please feel free to stop by and say hello to Kristen!

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

As we mentioned last Monday, the Supreme Court was toying with the decision to grant certiorari to Wine Country Gift Baskets.com, et. al., v. John T. Steen Jr., et. al., a case that dealt with Commerce Clause and Twenty-First Amendment issues as they pertain to wine retailers inside and outside the state of Texas. The Supreme Court Justices took the case to conference three times and today finally issued their order denying certiorari. No reasoning for the certiorari denial was given, although such explanations by the Court are often not provided. This means that the Fifth Circuit decision, which upheld Texas’ law prohibiting out-of-state wine retailers from shipping wine directly to Texas consumers while allowing in-state wine retailers to ship wine directly to Texas consumers, will remain the final decision on the case. If you are interested in reading the Fifth Circuit’s opinion for the case, it can be found here.

 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 ·

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 ·

Although Washington State’s two privatization measures, Initiatives 1100 and 1105, were voted down in the November 2010 elections, privatization proponents have not yet given up the fight. A new bill, SB 5111, is currently presented by Washington Senators Steve Hobbs (D), Curtis King (R), Steve Litzow (R), Phil Rockefeller (D), and Tim Sheldon (D). It was introduced on January 14, 2011 and then referred to the Committee on Labor, Commerce & Consumer Protection. The bill would allow voters the opportunity to once again vote on privatizing liquor sales in Washington. Currently, liquor sales are handled by the Washington State Liquor Control Board (“WSLCB”). If the bill passes, the WSLCB’s liquor assets will be sold off and all funds deposited into the general state fund; the state will, however, maintain a revenue stream from the sale of alcohol.

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

The deadline has been extended for comments on the Alcohol Tax and Trade Bureau’s (“TTB”) proposed amendment to regulations regarding common winemaking terms used on wine labels and advertisements.  Written comments are now due by March 4, 2011.  The TTB set out their proposed new regulations in Notice 109, “Use of Various Winemaking Terms on Wine Labels and in Advertisements”, published November 3, 2010 in the Federal Register.  The comment period was extended at the request of Napa Valley Vintners (“NVV”).  NVV has formed a subcommittee to research and survey members on the proposed new regulations. 

There are four main proposals set forth by the TTB in Notice 109.  First, the TTB proposes requiring the use of the terms “estate grown,” “estate,” and “estates” to meet the higher threshold definition it currently ascribes to “estate bottled.”  Second, the TTB proposes codifying its policy of only allowing the terms “proprietor grown” and “vintner grown” if 100% of the grapes used in a wine are grown on vineyards owned or controlled by the bottling winery.  Third, the TTB proposes to codify its current position that “single vineyard” may only be used when 100% of the grapes used in the wine come from one vineyard.  Further, it would extend that reasoning to the terms “single orchard,” “single farm,” and “single ranch.”  Fourth, the TTB is considering codifying definitions for the following terms: “Proprietors Blend,” “Old Vine,” “Barrel Fermented,” “Old Clone,” “Reserve,” “Select Harvest,” “Bottle Aged,” and “Barrel Select.”  The TTB made the proposals in an effort to ensure that consumers are not misled by wine labels and advertising.  Should these changes occur the TTB could revoke its approval of previously approved labels.

The Federal Alcohol Administration Act (“FAA Act”) sets forth the regulations for alcohol labeling and advertisements, including wine.  The TTB is responsible for the administration of the FAA Act and the promulgation of regulations thereunder.  The specific wine labeling and advertising regulations can be found in Title 27 of the Code of Federal Regulations.

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.