Privatizing Wine and Spirit Sales House Committee Compromise

HB 790 PN 1246 Amendment (Divests Wholesale Completely) New Licenses: Creation of a grocery store license for the sale of wine only. Quota on this license is 1 per 15,000 inhabitants in a county which means we would see approximately 825 throughout the state. Grocery store licensees may also obtain a restaurant license which would enable them to sell both beer and wine. Language creating wine and spirits retail licenses has been removed. New outlets for the sale of wine and spirits are handled through permits enumerated below. New Permits: Several permits that will allow for the sale of wine and/or spirits by current licensees have been created. All permits allow for the sale of wine and/or spirits between the hours of 8 am and 11 pm. Expanded sales permit for distributors only; this permit allows Ds to sell any quantity of wine and spirits for consumption off the licensed premises. Fee: $15,000 per year. Wine and Spirits to go permit for restaurants and hotels; this permit allows Rs and Hs to sell wine and spirits in limited quantities for consumption off of the licensed premises. Yearly permit fees are based upon the volume of alcohol the licensee purchases each year and range from $5,000 to $12,000. Quantities that may be sold are: o 6 bottles of wine in the 750 ml to 1 liter size OR o 3 bottles of wine in the 1 5/10 to 1 size bottles; and, o 4 bottles of spirits in the 750 ml to 1 liter size bottles; OR o 2 bottles of spirits in the 1 5/10 to 1 size bottles Wine to go permit for restaurants and hotels; this permit allows Rs and Hs to sell wine in limited quantities for consumption off the licensed premises. Yearly permit fees are based upon the volume of alcohol the licensee purchases each year and range from $2,500 to $6,000. Quantities that may be sold are: o 6 bottles of wine in the 750 ml to 1 liter size OR o 3 bottles of wine in the 1 5/10 to 1 size bottles Spirits to go permit for restaurants and hotels; this permit allows Rs and Hs to sell spirits in limited quantities for consumption off the licensed premises. Yearly permit fees are based upon the volume of alcohol the licensee purchases each year and range from $2,500 to $6,000. Quantities that may be sold are: o 4 bottles of spirits in the 750 ml to 1 liter size bottles; OR o 2 bottles of spirits in the 1 5/10 to 1 size bottles Language found in HB 790, PN 1246 allow eating place retail dispenser licensees to upgrade their license for a one-time $30,000 fee has been retained. Those E licensees who take advantage of this upgrade will then be eligible for the above permits. Store Closure Language: There is a new three part closure test for State Stores:

1|August 15, 2013

Privatizing Wine and Spirit Sales House Committee Compromise

When the number of grocery store licenses and expanded sales permits in a county equals the number of State Stores, the LCB has to determine the necessity of keeping the stores open. When the number of grocery store licenses and expanded sales permits in a county equals twice the number of State Stores, then all of the State Stores in the County must close. The LCB cannot operate fewer than 100 stores at any given time unless the LCB determines that accessibility and availability of wine and spirits is lacking in a particular area. Accessibility and availability is defined as having at least 2 retail outlets within 10 miles of the state store scheduled to close.

Package Reform Package reform in 790 was through a permitting process. For a yearly fee of $500 o Restaurant may sell up to 24 bottles so long as the packaging is no bigger than a 12-pack o Distributors may sell down to a 6-pack Increased Fines and Enforcement Fines found in HB 790 PN 1246 remain. These fines are substantially increased and provisions were put into place to make it easier to close nuisance establishments. HB 790 PN 1246 contained a provision allowing State Troopers to rotate through BLCE. This provision remains in the amendment. Miscellaneous Provisions The Senate added clean-up language to the bill to address issues in the Liquor Code not directly related to privatization. These include: o Groundhog Day when Groundhog Day falls on a Sunday, licensees may begin selling at 7 am o Breweries may sell products purchased from a limited winery or limited distillery o Limited wineries may sell limited distillery and brewery products o Limited distilleries may sell limited winery and brewery products Gas prohibition is lifted The off-premises catering permit may be applied for after March 1st so long as a $250 fine is paid and the licensee applies at least 30 days prior to the first catered event

Wholesale Divestiture: Legislative Budget and Finance committee is directed to commence a study of the wholesale system on October 1, 2013. They have 6 months to complete the study and arrive at an expected value for the wholesale system. At the completion of the study, wholesale divestiture language contained in HB 790 PN 1246 kicks in and the PLCB begins to issue wholesale wine and spirits licenses. 2|August 15, 2013