Relates to beer wholesale licenses

BILL NUMBER:S8216

Title of bill

An act to amend the alcoholic beverage control law, in relation to beer wholesale licenses

Purpose

To resolve a long standing issue with respect to beer wholesalers who operate primarily as retailers.

Summary of provisions

Section 1 of the bill would amend § 3 of the Alcoholic Beverage Control Law to add a definition for a "beverage center". Such establishments would be eligible for off-premises retail beer licenses even though they do not meet the criteria for either a grocery store or drug store.

Section 2 of the bill would amend § 53 of the Alcoholic Beverage Control Law to sunset a privilege granted to beer wholesalers that have been licensed since 1960. The amendment would eliminate the privilege of selling beer at retail, but allow wholesalers who wish to continue retail operations to exchange their wholesale license for a retail "beverage center" license. Wholesalers would be given until their at least December 31, 2011, to decide whether to retain the wholesale license or become retailers.

Section 3 of the bill would amend § 54 of the Alcoholic Beverage Control Law to add "beverage centers" to the types of establishments that can obtain an off-premises retail beer license. Only beer wholesalers with a retail sales privilege who are exchanging their wholesale license for a retail license would be eligible for such a license.

Section 17 of the bill would make this bill effective immediately. However, beer wholesalers will be able to retain their retail privileges until at least December 31, 2011.

Legislative history

New bill.

Statement in support

In 1960, §53 of the Alcoholic Beverage Control Law was amended to elimi- nate the retail sales privilege granted to beer wholesalers. Only wholesale licenses that were in effect at the time, and have subsequent- ly been renewed and/or transferred, retained that privilege. These wholesalers are generally referred to as "C" licensees, referring to the license code used by the State Liquor Authority. In contrast, those beer wholesalers without the retail privilege are referred to as "CO" licen- sees, again referring to the license code used by the Authority.

Over time, however, a number of these "C" licensees have ceased, or have greatly reduced their wholesale activities and have primarily become retail operations. However, since they continue to operate under the wholesale license, they are governed by the statutes and regulations governing wholesalers, not retailers.

As a result, two significant problems have arisen. First, these whole- salers, given the retail nature of their business, seek to expand the categories of goods they can sell to consumers. Under current law, such wholesalers are limited to certain items which can be sold on the licensed premises. Products which might normally be associated with beverage sales cannot be sold at their establishments.

Second, while they are limited with respect to the items that they can sell, these wholesalers are not subject to meeting the requirement of being either a grocery or drug store in order to obtain an off-premises retail beer license. Therefore, while a grocery store must maintain a specified inventory of products, not including beer, to be considered a bona fide grocery store, a "C" licensee can operate, if it so chooses, a beer only retail operation.

This proposal would address both issues "C" licensees who wish to continue as retailers would be able to exchange their wholesale license for a retail license, without being subject to either the inventory requirements for grocery stores, or the limitation on the types of products it can offer for sale under the laws governing wholesalers.

Budget implications

None.

Effective date

Immediately.