Distilled spirits maker ABC license types

On the heels of the craft brewing explosion came a smaller craft beverage revolution: Craft distillers.  Suddenly, the California Dept. of Alcoholic Beverage Control (“ABC”) saw applications for license types that rarely see new applications.  For those unfamiliar with alcoholic beverage licenses are divided among three categories and numerous specific “types.” First, a license is generally either a retail license (e.g. restaurants and bars), a wholesale license (e.g., a distributor), or a manufacturer license (e.g., a brewer, distiller, or winery).  Generally, state law prohibits common ownership of licenses in more than one category and licensed businesses may only perform functions within their category.  These prohibitions are called “Tied House” restrictions.  Within those categories reside the numerous license types, distinguished by both a number and a name.  The ABC license types applicable to distilling “spirits” are the following:

Type 03 BRANDY MANUFACTURER – The following pertains to brandy manufacturers’ licenses, and to duplicate brandy manufacturer’s licenses issued after September 17, 1965. This license authorizes the holder to manufacture only brandy and not other distilled spirits (Section 23014). Brandy made by the distillation of wine or fermented fruit.

Type 04 DISTILLED SPIRITS MANUFACTURER – The following pertains to new distilled spirits manufacturer’s licenses issued after September 18, 1959. The Act defines a distilled spirits manufacturer as “…any person who produces distilled spirits from naturally fermented materials or in any other manner” (Section 23015). The functions of this type of license, in addition to that of production, include packaging, bottling, rectifying, flavoring and others as found within Section 23356. The functions apply only to distilled spirits; they do not include wine or beer.

Type 05 DISTILLED SPIRITS MANUFACTURER’S AGENT – This license authorizes any of the following:

(a) The possession of distilled spirits in public or private warehouses.
(b) The exportation of distilled spirits.
(c) The cutting, blending, mixing, flavoring, and coloring of distilled spirits for his own account or for the account of a distilled spirits manufacturer, manufacturer’s agent, rectifier, or wholesaler.
(d) Whether cut, blended, mixed, flavored, or colored by him, or any other person, the packaging and the sale or delivery of distilled spirits only to holders of distilled spirits manufacturer’s, rectifier’s or distilled spirits wholesaler’s licenses.

A person need not actually engage in the cutting, blending, or bottling of distilled spirits in order to qualify for a distilled spirits manufacturer’s agent’s license.

Type 06 STILL – The following applies to still licenses used for the making of alcoholic beverages or capable of such use. A still is “…any apparatus capable of being used for separating alcohol, or alcoholic vapors or solutions from alcohol or alcoholic solutions or mixtures …” Stills used for laboratory purposes or stills used solely for producing distilled water or other non-alcoholic beverages are exempt from licensing (Section 23034). (Generally, this license is not required to produce fuel alcohol.)

Type 07 RECTIFIER – This type of license is frequently referred to as a “distilled spirits rectifier’s license”, which is incorrect since the license also permits the rectification of wine. This licensee is authorized to cut, blend, rectify, mix, flavor and color distilled spirits and wine upon which excise tax has been paid and, whether
rectified by the licensee or another person, to package, label, export and sell the products to persons holding licenses authorizing the sale of distilled spirits (Sections 23016 and 23368). This licensee may sell distilled spirits and wine without the need for any other license, but he/she may not sell wine to a person who does not hold a license that also authorizes the sale of distilled spirits. A rectifier may also elect to function as a distilled spirits wholesaler, but when doing so, he/she must comply with all of the provisions applicable to a distilled spirits wholesaler (Section 23371).

Excerpted from Non-Retail ABC License Types and Their Basic Privileges, form ABC-616-NR, Jan. 2019.

However, the license type in this category that is getting the most buzz is the “Craft Distiller” license for which ABC does not yet have a short description.  Neverthless, I put together a short description when it first came out in 2015, but it’s in a slideshow so I repeat the relevant slide below so you won’t have to scroll through dozens of slides:

Type 74 – Craft Distiller – Authorizes the licensee to: Manufacturer up to 100,000 gallons of distilled spirits per fiscal year; Package, rectify, mix, flavor, color, label, and export distilled spirits manufactured by licensee; Only sell it’s distilled spirits to a licensed wholesaler, manufacturer, winegrowers, manufacturer’s agent, or rectifier; Sell up to 2.25 liters of distilled spirits manufactured by the licensee to a consumer attending an instructional tasting; May sell all beers, wines, brandies, or distilled spirits to consumers for consumption on the premises in a bona fide eating place located on the licensed premises; May have upon its licensed premises all beers, wines, and distilled spirits, regardless of source, for sale or service only to guests during private events not open to the general public; Serve a total of one and one-half ounces of distilled spirits per individual per day to be as tastes.

For a more detailed description of this license type, click on the following links to ABC pages: Type 74 Full ABC Description and Type 74 FAQ

 

 

About William Adams

Attorney at Norton, Moore, & Adams, LLP.
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