When is an Alcoholic Beverage License Needed?

Wine BottleWhen is an Alcoholic Beverage License needed in California? What triggers a license requirement? In a nutshell, if alcohol is sold (even indirectly) or it is served at an event where a member of the public can attend, a license is required. Moreover, even if it is a private party and it is being given without charge to the guests of the party, if it occurs at a retail business, the Department of Alcoholic Beverage Control (“ABC”) will assume it’s a violation if they learn about it. For example, while it is common for art galleries to serve wine at receptions or openings of new exhibits, they are typically in violation of California law because members of the public can enter the gallery. The fact that it is done in connection with the promotion of a commercial activity, while in of itself not a violation, undercuts any argument that it is a private party. While it is equally true that art galleries rarely are cited, keep in mind that a violation is a criminal misdemeanor. The ABC will often survey advertisements for potential violations, whereupon they will send an ABC investigator to the event or alert the local Police Department so they can do so. Thus advertising the service of alcohol at such events or regularly hosting such events substantially increases the potential for a citation or arrest. If in doubt, the best option is to use a caterer or obtain a special event permit (from the ABC).

Quoted below are provisions from the ABC’s Trade Enforcement Manual.

ALCOHOL AT UNLICENSED PREMISES

Giving, selling, or furnishing free alcoholic beverages at an unlicensed salon, clothing store, jewelry store, art gallery, etc. is not legal (California Business & Professions Code Section 23300). Businesses like these will be considered illegal bottle clubs if alcohol is provided to, or consumed by, customers (Cal. Bus. & Prof. Code Sec. 25604)”

“PRIVATE PARTIES

Section 23399.1 of the California Business & Professions Code explains the circumstances when an alcoholic beverage license is not required:

1. That there is no sale of an alcoholic beverage.

2. That the premises are not open to the general public during the time alcoholic beverages are served, consumed or otherwise disposed of.

3. That the premises are not maintained for the purpose of keeping, serving, consuming or otherwise disposing of alcoholic beverages.

All three of the above elements must exist. If a proposed event meets the statutory definition of a “private party,” then no ABC license is required.

Note: Any event occurring on a licensed premises is not a “private party” under this provision. Events or activities on a licensed premises are subject to all rules and regulations applying to the licensee. Be aware that the definition of “sale” includes indirect transactions other than merely paying for a glass of wine or other drink containing alcohol. For instance, if an admission fee is charged or there is a charge for food and the alcohol is included, but not separately charged, an ABC license is required.

Note: No provision of the ABC Act may be violated even though the event itself does not require a license. If a license is required, or you have a question about a particular event, you should contact the ABC district office closest to where the event will occur. “

About William Adams

Attorney at Norton, Moore, & Adams, LLP.
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