Alabama Alcohol Beverage Licensing and Compliance
This post begins a seven-part series on alcohol beverage licensing and compliance in Alabama. Part I provides a brief history of the ABC Board and an overview of the regulatory framework in Alabama. Part II outlines issues you should consider before applying for an Alabama Beverage Control Board License. Part III outlines the ABC licensure process. Part IV summarizes key regulatory provisions applicable to on-premises licensees. Part V summarizes key regulatory provisions applicable to off-premises licensees. Part VI discusses ABC enforcement actions and ABC administrative hearings. Part VII provides an overview of ABC’s Responsible Vendor Training Program.
Part I: History and Regulatory Framework
In 1919, Alabama voters ratified the 18th Amendment to the United States Constitution ushering in the age of Prohibition. With some limited exceptions, the 18th Amendment made it illegal to manufacture, transport, or sell alcoholic beverages in Alabama. In 1933, Alabama voters ratified the 21st Amendment repealing Prohibition. Following the repeal of Prohibition, the Alabama Legislature established the Alabama Alcoholic Beverage Control Board regulating the manufacture, distribution, and sale of alcohol in Alabama. Alabama Code § 2-1-1 et seq.; Alabama Alcoholic Beverage Control Board Administrative Code Chapter 20-x-1 et seq.
An understanding of Alabama’s regulatory framework begins with five fundamental principles:
- First, the Alabama Alcoholic Beverage Control Board serves as the primary state agency tasked with the sale and regulation of alcoholic beverages in Alabama. The ABC Board’s product management division is responsible for the pricing, purchasing, warehousing, transportation, distribution, merchandising, stores, and sales of liquor products for the state. The ABC Board’s licensing, compliance and enforcement division issues and renews ABC Board licenses, and investigates the illegal manufacture, possession, transportation, and sale of alcoholic beverages, including sales and service to minors. The division also institutes administrative actions to enforce alcoholic beverage laws and regulations.
- Second, Alabama operates a hybrid control regulatory model. Under this model, all liquor manufacturers must sell their liquor to the ABC Board. The ABC Board then wholesales the product to its state-owned ABC Select Stores which then sells to consumers. Private retail liquor stores must purchase its products from the ABC Board. All retail establishments (ie bars and restaurants) selling liquor must purchase liquor from the ABC Board. Wine and beer are distributed by independent wholesalers and delivered directly to on-premises or off-premises licensees.
- Third, Alabama operates a three-tier system distribution system composed of producers, distributors, and retailers. Alcohol producers can only sell alcohol to wholesale distributors. Wholesale distributors then sell to licensed retailers—on-premises retailers like bars and restaurants, and off-premises retailers like grocery stores and gas stations. Licensed retailers sell to consumers. A producer cannot sell alcohol directly to the retailer. Persons with financial interests in one tier cannot have a financial interest in any other tier. So, a restaurant owner with an on-premises retail license cannot have an ownership interest in a licensed wholesaler, or manufacturer. There are some limited exceptions to the three-tier system including brewpubs which are permitted to manufacture beer and sell beer on-tap to consumers. Additionally, a relatively new statute permits direct-to-consumer wine sales.
- Fourth, there are two broad categories of retail licensees: on-premises licensees like restaurants and bars, and off-premises licensees like grocery stores and private package stores. Generally speaking, an on-premises retail licensee cannot allow a customer to leave the premises with alcohol. Generally speaking, an off-premises licensee cannot allow a customer to consume alcohol on the premises.
- Fifth, at its core, the ABC Board is a public safety agency. Everything the ABC Board does is aimed at protecting the public from illegal and unsafe sales, services, and consumption of alcohol. The ABC Board does everything it can to keep alcohol out of the hands of minors, and out of the hands of persons who are visibly intoxicated.
Up next, Part II, Initial Considerations Before Applying for an Alabama Alcoholic Beverage Control Board License.
Jansen Voss is a partner with Christian & Small law firm. With offices in Birmingham and the Alabama Gulf Coast, Jansen represents bars, restaurants, hotels, breweries, distilleries, grocery stores, gas stations, convenience stores, and liquor stores throughout the state of Alabama. He assists businesses with the ABC licensure process and consults on alcohol regulatory matters. Jansen defends ABC licensees in administrative enforcement actions before the Alabama Alcoholic Beverage Control Board Hearing Commission. He is approved by the Alabama Beverage Control Board to provide Responsible Vendor training throughout the state of Alabama for both on-premises and off-premises licensees. Jansen also routinely defends alcohol licensees in Dram Shop civil lawsuits in state courts throughout the state of Alabama. Jansen’s clients include large chain restaurants, award-winning fine dining restaurants, large grocery store chains, and large gas station and convenience store chains. He also represents local breweries, distilleries, restaurants, grocery stores, gas stations, and convenience stores. Jansen can be reached at 205-250-6632 or at mjvoss@csattorneys.com
About Christian & Small
Christian & Small LLP represents a diverse clientele throughout Alabama, the Southeast, and the nation with clients ranging from individuals and closely-held businesses to Fortune 500 corporations. By matching highly experienced lawyers with specific client needs, Christian & Small develops innovative, effective, and efficient solutions for clients. With offices in Birmingham, metro-Jackson, Mississippi, and the Alabama Gulf Coast, Christian & Small focuses on the areas of litigation and business, is a member of the International Society of Primerus Law Firms, and is the only Alabama-based member firm in the Leadership Council on Legal Diversity. Our corporate social responsibility program is focused on education, and diversity is one of Christian & Small’s core values.
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