Duplicate Licenses for Breweries

Nederlands: Hook Norton Brewery barrel, by Jasper K via Wikimedia Commons

Nederlands: Hook Norton Brewery barrel,
by Jasper K via Wikimedia Commons

Prior to Sept. 29, 2014, California breweries had the ability to open “branch” locations on an expedited basis.  These branch locations could sell the brewery’s beer to the public but could not make beer.  A brewery with a type 1 (large) or type 23 (small) could open an unlimited number of such branch locations by obtaining, essentially, an over-the-counter permit referred to as a “duplicate license.”  In the language of the code, the licenses were to issued “forthwith,” i.e., expedited.  In contrast, other ABC licenses typically involve lengthy investigations by the ABC and several months to obtain.  Often, the ABC and local law enforcement has the “discretion” to deny the license application altogether, ergo its referred to as a “discretionary application” process.  Many people considered this duplicate brewery license process a loophole.  As a result, a bill was introduced to make such duplicate licenses “discretionary” and to limit the number of such licenses available to breweries.  The bill passed and was signed into law by the Governor.  On Sept. 29, 2014, the ‘party was over’ for expedited duplicate licenses.

Now duplicate licenses for retail sales are no longer issued “forthwith” (duplicate licenses for wholesale-only branches are still issued forthwith).  Retail duplicate licenses can be denied based on local opposition to a particular site.  The application process is more difficult, lengthy, and expensive – much like obtaining a new restaurant or bar license.  Additionally, breweries are now limited to 6 duplicates of which only 2 can include restaurants.  The rest have to be, essentially, tasting rooms.

Are there any reasons remaining for a brewery considering a new location to apply for a duplicate license as opposed to more traditional beer & wine licenses?  Yes – two big ones:

  1. Minors (children) can come into a premises with a duplicate brewery license but not a bar license.
  2. Tied house restrictions don’t apply. (Section 25500, et seq., Business & Professions Code.) I.e., the brewery can supply the beer directly to its duplicate license location.  However, if it is licensed with a bar or restaurant license, it would have to go through a licensed wholesaler.

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For more info on duplicate licenses, see California Business & Professions Code sec. 23389.

Photo Credit: Jasper K via Wikimedia Commons

Special thanks to my colleague and well known ABC expert Mike Brewer, ABC Consulting, for his advice in writing this post.

 

About William Adams

Attorney at Norton, Moore, & Adams, LLP.
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