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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 ·

 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 ·