Libation Law Blog

Alcoholic Beverage and Cannabis Regulatory and Legal Updates

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By: Ashley Brandt

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Ashley Brandt
jeffrey goldberg

Latest from Libation Law Blog

When we first wrote about this matter back in February of 2021, it was to tell you that CANarchy had won a challenge to the Texas Alcoholic Beverage Commission’s interpretation of a Texas alcoholic beverage control law limiting the right of breweries to sell beer to go from their premises to those breweries that do not make more than 225,000 barrels of beer annually “at all premises wholly or partly owned, directly or indirectly,” by the brewer.

Sec. 12.052. Sales by Certain Brewers to Consumers. (a)In addition to the activities authorized by Section 12.01 (Authorized Activities), the holder of a…
Continue Reading 5th Circuit’s pun-filled opinion upholds CANarchy’s right to sell beer to go in Texas because it leases and does not “own” most of its breweries across the country.

Following an initial first-round publication (now edited) and two rounds of comments (here and here), the Illinois Liquor Control Commission has now provided the Joint Committee on Administrative Rules with a second publication and partially edited proposed Administrative Rule governing alcoholic beverage couponing and rebate promotions between liquor manufacturers and distributors and retailers. Here is the link to the updated new proposed rule on alcoholic beverage coupons in Illinois.

The new rule addresses three different types of rebates/coupons/promotions:

  • The first are those rebates and coupons offered from manufacturers (brewers, distillers, wineries) to consumers whereby the funds for

    • …
    Continue Reading Selling alcoholic beverages in Illinois? Retailers, wholesalers, distilleries, breweries and wineries should get familiar with the soon-to-be new rule regarding alcoholic beverage promotions involving coupons and rebates; scan backs are prohibited.

    In a boon to Illinois’s hospitality industry, the Illinois Liquor Control Commission has announced the implementation of the liquor license fee reduction enacted by Governor Pritzker’s signing the 2023 budget.

    The budget requires the ILCC to waive the license renewal fees ($600 online and $750 in person) (and sorry first-timers) for State of Illinois liquor license holders of retailer licenses designated as “1A” licenses (you’ll know by looking at your current license number, but basically, bars, restaurants, packaged goods stores, theaters, etc.).

    This liquor license fee waiver runs from July 1, 2022 to June 30, 2023, so everyone with a…
    Continue Reading In a win for Illinois hospitality, bars, hotels, restaurants, liquor stores, theaters and other “1A” Retailer Liquor Licensees receive full license fee waivers for upcoming 2022-2023 renewals.

    In Notice of proposed rulemaking No. 212 (“Modernization of Qualification Requirements for Brewer’s Notices), the TTB recently proposed these changes to the Code of Federal Regulations governing brewers, brewing, and brewery operations and control. Comments are accepted through August 8:

    (1) Eliminating the collection of certain information from Brewer’s Notices; and

    (2) Replacing required narrative descriptions of the premises with more specific information.

    The proposed amendments to CFR § 25.68 eliminate requirements to submit detailed narrative descriptions of the brewery and certain of its attributes and replace these requirements with a more specific set of information. Section 25.81 relates…
    Continue Reading The TTB’s Ten proposed changes that you’ll want to know about regarding: reporting inventory, trade names, beer destruction, tavern premises, ownership and managerial changes, applying for a brewer’s notice, records maintenance, and terminating operations

    The Court of Appeals of Maryland has affirmed a lower appellate court’s reversal of a win that Pabst had against a Maryland beer wholesaler under Maryland’s beer franchise law, the Maryland Beer Franchise Fair Dealing Act. The case is Pabst Brewing Co. v. Frederick P. Winner, Ltd. (link to opinion).

    We reported on the lower court case back in May of last year. At that time the Appellate Court was faced with ruling on an appeal brought by a beer distributor, Frederick P. Winner, Ltd., that had lost a district court case to Pabst following Pabst’s termination…
    Continue Reading Maryland high court rules against Pabst and limits “successor brewer” under beer franchise law to different or new licensees finding it does not include change of control through new parent companies

    Judge Friendly often proved the power of an articulate and well-reasoned dissent. His dissents led to Supreme Court review, en banc consideration, and future policy and precedent. Judge Wilkinson has a Friendly-esque track record and his recent dissent in a dormant Commerce Clause wine retailer shipping challenge may lead to further review of the 4th Circuit’s decision in B-21 Wines, Inc. v. Bauer (link to opinion (and excellent dissent)).

    B-21 Wines involves a dormant Commerce Clause challenge to North Carolina’s discriminatory practice (all judges in the opinion agreed the practice is discriminatory) of allowing in-state wine retailers to ship…
    Continue Reading In wine retailer shipping case, 4th Circuit panel splits over proper test for Twenty-first Amendment dormant Commerce Clause challenges and interpretation of holdings in Granholm and Tennessee Wine. Bonus: we have the briefs and appendix for you.

    It’s finally over. Back in 2020, the 7th Circuit reversed an injunction that then MillerCoors obtained against Anheuser keeping Anheuser from using certain forms of advertising related to an ad campaign asserting that corn syrup was used in Miller Lite and Coors Light – the implications of a relationship to “high fructose corn syrup” and corn syrup remaining in the beer as opposed to aiding in fermentation drove the district court’s decision. The 7th Circuit rejected the notions of foul play because MillerCoors (now Molson Coors) had listed corn syrup as an “ingredient” on its website.

    On appeal, however, the…
    Continue Reading Order entered dismissing remaining issues in Molson Coors (MillerCoors) v. Anheuser false advertising case… yes, that one about the corn syrup ads from 2019.

    Brewers, distillers and vintners should pay attention to a recent ruling about an imported beer brand’s dispute with a distributor that it hadn’t shipped beer to in 18 years as it contains some important lessons for distribution agreement termination in franchise states.

    The facts of Amtec Int’l of N.Y. Corp. v. Polish Folklore Imp. Co. (link to opinion) involve an importer of Polish beer – ZUBR – and its successor as well as a malt beverage wholesaler operating in New York and New Jersey. 

    In 1998 the beer distributor entered into an “import and wholesale agreement” (you can find …
    Continue Reading Court finds leaving a territory for 13 years might not be enough to accomplish termination of a beer distribution agreement – but sales and transfer of title outside the state may preclude beer franchise statute application

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    Flying Dog Brewery has long been known for its Ralph Steadman label artwork. Steadman partied with Hunter S. Thompson and some of that interaction is humorously detailed in several of Thompson’s essays. Some idiots find Steadman’s artwork disturbing and worse, some try to ban labels containing that art. Flying Dog has set precedent protecting free speech on this very issue: the 6th Circuit Court of Appeals took the State of Michigan to task in 2012 for attempting to prohibit sales stating that when Michigan’s ordinance attempting to regulated the content of beer labels was passed in 2009 no regulator…
    Continue Reading Court finds craft brewer’s label protected by free speech, state regulation of label content unconstitutional (yes, it’s Flying Dog… again)

    Out-of-state spirits producers do not enjoy the same rights as in-state producers in Minnesota when it comes to exclusive distribution agreements. Under Minn. Stat. § 340A.307 out-of-state distillers and importers (those bringing spirits into Minnesota) of intoxicating liquors “must offer for sale on an equal basis to all licensed wholesalers and manufacturers all intoxicating liquor brought into the state of Minnesota.” This right means that out-of-state distillers or importers cannot enter into exclusive arrangements with wholesalers and must sell their liquor to any wholesaler that wants to purchase it. Minnesota statutes do not apply this same openness to in-state produced…
    Continue Reading Court finds state’s prohibition on exclusive liquor distribution agreements for out-of-state distillers violates Commerce Clause so state eliminates exclusivity.

    For the past few iterations of amendments and creations for the Class 1, brewers licenses, the Class 2 brewers and distillers licenses and the Class 3 (no form yet) and Brewpub and Distilling Pub licenses, different amendments have inserted language regarding the ability of such licensees making transfers between other wholly owned licensees of similar class.

    The language from the Illinois Liquor Control Act, for the most part, always required prior approval from the Illinois Liquor Control Commission prior to making a transfer of beer or spirits in this fashion, but the ILCC never really had a mechanism for receiving…
    Continue Reading ILCC Introduces Forms For Brewers, Brewpubs, Distilling Pubs and Distillers to Obtain Approval Before Transferring Between Wholly Owned Operations.

    The Governor’s signature brought Public Act 102-0442 to life on August 20. The Act effectuates multiple amendments to the sausage of the Illinois Liquor Control Act of 1934. Let’s break them down:

    Mead is in.

    The definition of Wine is amended to specifically reference beverages made with honey and mead. Sadly, the Illinois legislature did not adopt the cute “honey wine” moniker the TTB prefers when referring to mead. The amendments suitably expand the Winery Shippers, First-Class and Second-Class Wine Manufacturers and First-Class and Second-Class Wine-Makers and even Limited Wine Manufacturer license holders’ rights by adding the…
    Continue Reading Recent updates to the Illinois Liquor Control Act, Part 1 of 2, Definitions, Class 3 Brewers, Self-Distribution, Alternating Premises Tap Rooms and more.

    Beer wholesaler Frederick P. Winner, Ltd., sued Pabst Brewing Co. over Pabst’s termination of the beer distribution rights the brewer had granted to the wholesaler. The termination came after a change in Pabst’s ownership. The beer distributor claimed the termination violated its rights under the Maryland Beer Franchise Fair Dealing Act. The trial court granted the beer maker summary judgment finding that the change in corporate structure at the grandparent level  (see the chart below) following the purchase of the beer company that led to the termination made the current Pabst Brewing Company, a “successor beer manufacturer” for the…
    Continue Reading Maryland court rejects control test in interpreting whether a company is a “successor brewer” under beer franchise fair dealing act allowing termination of distribution agreement.

    One of the recent in the battle over out-of-state retailer shipping: Sarasota Wine Market v. Schmitt is another win for alcoholic beverage wholesalers. You can read our prior posts on this case here, here and here.

    Briefly, out-of-state retailers wanted to ship alcohol to Missouri residents and challenged Missiouri’s refusal to let them do that because Missouri only issues retailer licenses to licensees with an in-state presence.

    This case is one of many attempting to keep the holdings of Granholm at bay from the remainder of the three-tiered system by asserting a line between manufacturers and retailers that…
    Continue Reading In denying out-of-state retailers the right to ship to Missouri residents, 8th Circuit questions whether Courts should allow dormant Commerce Clause challengers to put on evidence.

    CANarchy brought two challenges to the Texas Alcoholic Beverage Code’s 225,000 barrel cap on brewery “beer-to-go” sales. The relevant portions of the statute authorize breweries in Texas to sell beer-to-go, provided they have a production rate below 225,000 barrels annually. This right was only recently added in 2019. The language of the statute empowering these “beer-to-go” sales reads:

    [T]he holder of a brewer’s permit whose annual production of ale, together with the annual production of beer by the holder of a manufacturer’s license at all premises wholly or partly owned, directly or indirectly, by the permit holder or an affiliate…
    Continue Reading CANarchy wins challenge to Texas ABC statute over limits on brewery production sizes for direct from taproom “beer-to-go” sales based on a statutory construction resulting from poor legislative drafting.

    You can read about this case in our previous posts on it here, and here.

    A consumer brought suit against Bacardi based on a 150-year-old law on Florida’s books regarding some compounds and ingredients that, prior to decent Federal regulation and at a time when little was known about such compounds, declared different substances, including grains of paradise, adulterants and banned their use in liquor.

    The lawsuit sought a class certification and damages claiming because the statute declared the liquor adulterated, the alcohol was therefore worthless. Bacardi moved to dismiss arguing against the claims, in relevant part, stating…
    Continue Reading Here’s the oral argument audio in the Bacardi grains of paradise preemption case.