SB 418

Distillpub permits

This bill creates a distillpub permit issued by the Department of Revenue that

authorizes the manufacture, rectification, and sale of intoxicating liquor other than

wine (distilled spirits). The bill authorizes certain retail interests and activities of

distillpubs and, if a person holds both a distillpub permit and brewpub permit,

modifies the permissible retail interests for the brewpub.

Under current law, alcohol beverages are generally distributed to consumers

under a three-tier distribution system: the producer sells to a wholesaler; the

wholesaler sells to a retailer; and the retailer sells to a consumer. With specific

exceptions, no person may sell outside the three-tier system and no person may sell

alcohol beverages to a consumer unless the seller possesses a license or permit

authorizing the sale. A Class “B" license authorizes the retail sale of fermented malt

beverages (beer) for consumption on or off the premises. A “Class B" license

authorizes the retail sale of intoxicating liquor for consumption on the licensed

premises and, subject to various restrictions, the retail sale of intoxicating liquor in

original packages for consumption off the licensed premises. Intoxicating liquor

includes wine and distilled spirits. Class “B” licenses and “Class B” licenses are

generally issued together for establishments such as restaurants, bars, and taverns.

Class “A” and “Class A” licenses authorize the retail sale of, respectively, beer and

intoxicating liquor in original packages for consumption off the licensed premises.

Class “A” licenses and “Class A” licenses are often issued together for establishments

such as grocery stores, liquor stores, and convenience stores. A “Class C" license,

which may be issued only for a restaurant, authorizes the retail sale of wine by the

glass or in an opened original container for consumption on the premises. Each of

these retail licenses is issued by a municipality.

Also under current law, DOR issues permits to producers of alcohol beverages.

A manufacturer's permit or rectifier's permit issued by DOR authorizes the

permittee to, respectively, manufacture or rectify intoxicating liquor and sell it to

wholesalers. Current law prohibits a manufacturer or rectifier from holding an

interest in a retail liquor license and prohibits a retail liquor licensee from holding

an interest in a manufacturer, but a manufacturer's permit or rectifier's permit

authorizes limited retail sales without a retail license. Under the manufacturer's

permit or rectifier's permit, a manufacturer or rectifier may make retail sales of

intoxicating liquor manufactured or rectified on the premises, for consumption on or

off these premises.

Under current law, to authorize commercial brewing operations, DOR may

issue a brewpub permit or a brewer's permit, but no person may hold both permits.

To be eligible for a brewpub permit, a person must meet certain requirements,

including that 1) the person manufactures not more than 10,000 barrels of beer per

year in all locations, 2) the person operates on the brewpub premises a restaurant