Alabama Alcohol Beverage Licensing and Compliance
This post is the second in 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 II: Initial Considerations Before Applying for an Alabama Alcoholic Beverage Control Board License
Licensure to manufacture, distribute, sell, and deliver alcohol in Alabama is strictly controlled by the ABC Board. The licensure process can take a few weeks up to a few months, depending upon the county or municipality in which your business is operating. The process requires business owners to submit to a background check, obtain approval from the county or municipality in which the business is operating, and submit to an inspection of the premises by an ABC employee.
I encourage you to consider the following issues and engage a lawyer to assist you in considering the following issues BEFORE you make any significant financial commitment towards opening an alcohol manufacture, distribution or sales business—especially before buying or leasing property, or engaging in marketing or advertising efforts.
After considering the following factors, you may find local government regulations or politics inconsistent with your business plan.
Your Business Plan
At this point, you know you are interested in the alcohol industry, and you may have a general idea about what part of the industry you are interested in: manufacturing, distribution, or sales (grocery, gas station, package store, bar, restaurant, hotel, etc). However, it is important that you prepare a written business plan outlining specifically what products and services you want to provide, where you want to do it, financial considerations, marketing and advertising, and a timeline for execution of the business plan. You may end up revising your business plan or even pivoting away from the alcohol industry altogether, after considering the following issues. But, developing a written business plan—no matter how small or large your business maybe—is an important first step in obtaining an alcohol license.
Wet or Dry?
Next, consider whether the municipality in which your business is located (or county if your business is in an unincorporated part of the county) permits alcohol sales (wet), or whether alcohol sales are prohibited (dry). Chances are your business is located in a wet municipality or county, but you need to make that determination before proceeding any further with alcohol licensure. Note that there may be exceptions permitting the manufacture of alcohol in dry municipalities or counties.
License Types
Once you’ve determined your business is in a wet county or municipality, you need to determine what kind of license fits your business plan. The following outlines some of the more common ABC Board licenses. Each license category carries with it a number of complex and very restrictive requirements. It is important to conduct a detailed assessment of those requirements to determine if your business plan is consistent with a particular license category.
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- Manufacturer License
- Distribution
- Liquor Wholesale License
- Wholesale Beer Only License
- Wholesale Table Wine Only – 16.5% or Less License
- Wholesale Table Wine & Beer Combined License
- Warehouse License
- Additional Warehouse Wine, Beer, or Both License
- Retail
- Lounge Retail Liquor – Class I License
- Lounge Retail Liquor – Class II (Package) License
- Restaurant Retail Liquor License
- Club Liquor – Class I License
- Club Liquor – Class II License
- Retail Beer (On or Off Premises) License
- Retail Beer (Off Premises Only) License
- Retail Table Wine (On or Off Premises) License
- Retail Table Wine (Off Premises Only) License
- Brewpub License
- Wine Shipping/Fulfillment
- Direct Wine Shipper
- Wine Fulfillment Center
- Additional Wine Fulfillment Center
- Delivery Service License
Businesses whose primary product is food sales generally obtain a Restaurant Retail Liquor License allowing the restaurant to serve beer, wine, and liquor on-premises. The distinction between businesses that primarily serve food and businesses that operate primarily as a bar but serve a limited amount of food is important. If your business falls in the latter category, you will likely be required to obtain a lounge retail liquor license or a club liquor license.
Grocery stores, convenience stores, and gas stations typically obtain an off-premises Retail Beer License and an off-premises Retail Table Wine License. Those licenses do not permit the sale of liquor. Businesses interested in operating a package store (off-premises liquor sales) must apply for a Lounge Retail Class II license and are subject to a number of very strict requirements.
A a number of factors affect the types of licenses you are eligible for, including but not limited to:
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- Do you want to manufacture alcohol, distribute alcohol, or sell alcohol?
- Are you brewing beer for on-premises sales?
- If you want to sell alcohol, are you selling for on-premises consumption (restaurant/bar/hotel) or off-premises (grocery, convenience, gas station, package store)?
- Do you want to sell beer, wine, and/or liquor?
- Do you already have an ownership interest in an ABC licensed business?
- Do you have prior criminal convictions? If so, it may make it difficult (but not impossible) for you to obtain a license.
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Local Government
Municipal and county ordinances and regulations also affect the licenses you are eligible for. Local governments almost always have their own alcohol licensure process separate from the ABC Board’s licensure process. Local government restrictions vary widely, and the time it takes to obtain local government licensure/approval varies from a couple of weeks to several months. So, engage local government early in the process.
Local government restrictions may significantly affect the licenses for which you are eligible. For example, some local governments limit the number of bars in a particular area, or may allow beer/wine sales but prohibit liquor sales in certain circumstances. Some local governments may require you to obtain approval from the local zoning board.
Up next, Part III: The Alabama Alcoholic Beverage Control Board Licensure Process. Link to Part I: Alabama Alcohol Beverage Licensing and Compliance
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.
No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers.