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Have you noticed California’s alcohol laws favor wine over beer and spirits? Type 02 winegrowers have more privileges and fewer restrictions than type 02 and 23 beer manufacturers; and type 04 distilled spirits manufacturers are in the worst position of all. Here are just a few examples of California’s preference for wine (and distaste for spirits):

1. Winegrowers can sell wine to consumers online and ship the product (i.e., operate an online retail store) without obtaining any other licenses, while beer and distilled spirits manufacturers cannot.

a. Although type 04 distilled spirits manufacturers cannot sell alcohol online and ship it to consumers, type 74 craft distillers can -- up to 2.25 liters per day per consumer. But this special COVID-related privilege is set to expire on January 1, 2024.

2. Winegrowers can store wine in, and deliver wine from, an unlicensed private warehouse. Beer and distilled spirits manufacturers can’t use, or deliver from, private warehouses.

3. Winegrowers and beer manufacturers can sell wine and beer, regardless of source, for consumption at a restaurant on their licensed premises or on their adjacent property. Winegrowers (but not beer manufacturers) can also sell brandy. The restaurant must be run by or for the licensee. Distilled spirits manufacturers have no comparable privilege.

4. Winegrowers and beer manufacturers can sell and serve wine and beer at authorized private events on their licensed premises. Winegrowers (but not beer manufacturers) can also sell and serve brandy. Except for their own products, hosting licensees must purchase alcohol from wholesalers. Distilled spirits manufacturers have no comparable privilege.

5. California law treats winegrowers, beer manufacturers, and distilled spirits manufacturers differently when they try to combine their production licenses with other license types. Winegrowers enjoy the most options for growing their businesses; distilled spirits manufacturers have the fewest.

Various factors have contributed to California’s statutory preference for wine. The most important is California’s well-established wine lobby. California has a long history of winemaking, and winegrowers still far outnumber makers of beer and spirits. As of 2021, the most current data available, California had issued 6,562 winegrower licenses, but only 1,231 beer manufacturer licenses and a mere 74 distilled spirits manufacturer licenses. California’s robust wine industry has successfully lobbied for wine-friendly laws.

Another factor is the traditional view of wine as a more sophisticated and upscale beverage than beer or spirits. This notion is based in part on Prohibition-era prejudices. Distilled spirits surged in popularity during the national ban on alcohol between 1920 and 1933 because their potency made them more profitable to produce and smuggle. For decades afterwards, policymakers associated distilled spirits with crime and an increased potential for drunk and disorderly behavior.

It is time to challenge antiquated biases against beer and spirits. There is no rational basis for favoring wine over beer and spirits in licensing laws. The beer and distilled spirits industry should ramp up its efforts to organize and lobby for more beer and spirits-friendly laws.

This informational piece, which may be considered advertising under the ethical rules of certain jurisdictions, is provided on the understanding that it does not constitute the rendering of legal advice and does not form an attorney-client relationship. You can unsubscribe from future messages by replying “unsubscribe” to this message.

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