Understanding Bewildering US State Liquor Laws

[Snowy is dead]

I don't know about Vermont, but a few cities in Massachusetts had similar laws. In Burlington MA, for example, until a few years ago if you didn't have an actual chair in a bar you couldn't have a drink. No standing and drinking. When it was time for you to move from the bar to your table, a waitress had to come and move you drinks for you, then you could sit down. That town got rid of it, but a few still have that law.

For the different offernings in different states, someone just told me that to any foreign producer that wants to offer their product in the US has to work out separate import deals/liscenses with each of the 50 states, then deal with all the wholesale/distributor crap mentioned above. Is there any truch to this?

To further complicate things, I don't think the companies always even inform their reps as to what they do or don't have. We just got Taylors Velvet Falernum in MA, for example. It has been listed in the beverage journal for a few months. But when I order it, my rep has no idea what it is, they can't seem to find it in the wharehouse, or know what it looks like. So a few months of trying to get it, I still don't have it, and they still don't know what I'm talking about. So they company will no doubt stop carrying it shortly because it doesn't sell. Go figure.

[Scott S]

We just got Taylors Velvet Falernum in MA, for example. ... So a few months of trying to get it, I still don't have it, and they still don't know what I'm talking about.

Martignetti's on Soldier's Field Road has it. Or possibly it was Marty's in Allston? Worth a call to both to confirm.

[Chris Amirault]

To further complicate things, I don't think the companies always even inform their reps as to what they do or don't have.  We just got Taylors Velvet Falernum in MA, for example.  It has been listed in the beverage journal for a few months. 

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Forgive my ignorance, but what is "the beverage journal"? Is there a listing for each state?

[JohnL]

To simplify, The Beverage Journal is part of Beverage Media. This is a service that wholesalers and retailers use.

It basically provides what is available and wholesale pricing for alcoholic beverages State by State.

It is organized by wholesaler.

If a customer inquires as to the availability of an item a retailer will invariably take out the Beverage Media book or Journal and try to locate the product. If the retailer has an account with the wholesaler who offers the product they will try to order it for the customer.

A retailer may have to take a case of the product so it is up to them if they want to do this to supply a customer with one or two bottles.

If the retailer does not have an account with the wholesaler then it is up to them if they want to open one (paperwork, credit check etc etc). The retailer can also work a deal to get the item with another retailer etc.

It makes little sense for a consumer to bother obtaining one of these books as the book would not provide much information as to where the consumer could purchase an item. There are on line services (wine finder etc) that do this.

The best thing a consumer can do is have a good relationship with a retailer. If one is looking for something then a motivated retailer will be able to either get that item or at least make reasonable attempts on behalf of the customer.

Rare and limited production items and/or high demand items may be difficult or impossible to procure even if they are available legally in a given state.

I would also suggest that anyone living in a particularly difficult or prohibitive state try contacting a retailer in a less prohibitive state nearby--thus increasing their chances. Also with a little legwork via the net and phone calls, a consumer should be able to find out what wholesalers carry a particular product. The easiest way is to call the producer or the importer and inquire as to what wholesalers they do business with. A call to that wholesaler should provide retailers who carry the product.

[Snowy is dead]

We just got Taylors Velvet Falernum in MA, for example. ... So a few months of trying to get it, I still don't have it, and they still don't know what I'm talking about.

Martignetti's on Soldier's Field Road has it. Or possibly it was Marty's in Allston? Worth a call to both to confirm.

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Thanks, I'll give them a shot.

The beverage journal is like a phone book. You almost have to know where it is in the book before you start looking.

[Chris Amirault]

Forgive me if this has been addressed above. While at one of my local liquor haunts (IM Gann on Warwick Ave in Cranston), Chris was kind enough to talk me through a few more details of these laws. One detail seemed stunning to me: each item is only available from exactly one distributor in RI. So, one place distributes Anheuser-Busch, which means that they distribute Bud to every store in the state.

Is this true elsewhere?

[eje]

I believe it is true, that, in those states whose liquor retailers aren't state controlled, a single distributor ("Wholesaler") will handle a product for a region ("Territory" is the proper term.)

In larger states, like California, I believe that importers/manufacturers ("suppliers") may be handled by different "wholesalers" in different "territories".

So, for example, while Golden Brands (DBI San Francisco) handles a number of beers, (and other beverage brands,) in San Francisco, they do not distribute in Los Angeles.

In those states whose liquor retailers are state controlled, I believe it is similar, except that the state in question then becomes the sole "retailer".

Edited June 3, 2007 by eje (log)

[Snowy is dead]

We just had a crazy buyout of one of the big distributors here. There were several brands, like Absolut, that were carried by more than one distributor. This is no longer the case for almost all brands now and now that more of them are "exclusive" the price has increased. Sometimes by a few dollars a bottle. I can't see how this arrangement benefits anyone but the distributors. I'm having to rework my cocktail, beer, and wine lists because so many brands have switched hands and I can't get lots of things anymore. Makes life difficult for little restaurants like us who deal with a 'mere' six or seven distributors.

no competition = ripoff

[Chris Amirault]

So, given this byzantine state of affairs (or these byzantine affairs of state), how might one go about getting that Montecristo Premium Blend added to the list of available items? Talk to the distributor of the other Montecristo products? What about adding an entire line such as Flor de Caña, none of whose products are available in RI?

[slkinsey]

There are a couple of issues here.

Issue #1 is whether or not those products are on some distributor's list for your state or not. It's possible that they are on some distributor's list and simply not actually stocked by the distributor in the state. It's also possible that it is stocked by the distributor in the state, and your liquor store doesn't stock it himself. The last one is the best case scenario, because you can get your liquor store to special-order some for you. The other situations are a little trickier. It's not clear that you, as an individual consumer can do much of anything. To make an example: Despite the fact that most of the top bars in NYC were asking for Laird's bonded, and despite the fact that there was built-in demand for the product such that the distributor would know it was going to move a certain reasonable volume of Laird's bonded in NYC, and despite the fact that Laird's bonded was on the list for NY, it still took over a year plus a number of phone calls from Laird's to the NY distributor before any of it came into the distributor's NY inventory.

Edited June 15, 2007 by slkinsey (log)

[Dave the Cook]

The distributor is the choke point, and there's little if anything to be gained by an individual trying to talk to them. First of all, finding out who distributes what brand is difficult. Liquor stores don't want to share this information -- try asking for a peek at their beverage journal (more on this later). Second, a distributor isn't in the least bit interested in your purchase of one bottle every six weeks (or three, in my case). He wants to deal, at a minimum, in whole cases (or truckloads, if we're talking about vodka).

Here's what I did to get Product X in Atlanta:

• I went to every liquor store on the north side of the city and asked for it. When I found a friendly ear, I asked who the distributor might be. No one was sure; in Georgia, we recently went through a consolidation phase, too, so consulting the journal (which a couple of guys did) was like asking questions of a Magic 8 ball. I had one manager tell me that the new distributor had actually dropped the product from their line.
  
• I found out who the importer was. This isn't usually difficult -- just google the product name to find the product's website, and it will be there somewhere.
  
• I sent an email. The first one was to info@productX.com. I pleaded my case, and pledged to buy at least ten bottles a year.
  
• I got a personal email back, asking for the names of a few prominent stores in the area. So, I kind of hounded this guy. On the other hand, he was 1) gracious; 2) glad that I was able to pinpoint his problem in Georgia and Florida. Plus, since I had collected a few business cards, I was able to give him names, phone numbers and email addresses. He started calling the liquor stores. It seems likely that at least couple would have remembered the bald guy who had been pestering them.
  
• He got a few to agree to order two or three bottles each (the importer doesn't necessarily know the stores, but at least he knows who his distributors are, so he can tell the store buyer who to call). Pretty soon, they had a case or two worth of orders.
  
• I hit a few of these places and bought a bottle, PM'd a few other area cocktailians, and talked up bar folks, so that those first few bottles got bought.
  

I did a survey over the last few days (trying to find Product Y, to no avail). I'm happy to report that Product X is, while not exactly widely available, within a 20-minute drive of anyone living in north Atlanta (if you've ever driven in Atlanta, you know that's saying something).

As for the beverage journal: forget the liquor store. Go talk to a restaurateur. Anyone who orders from a distributor (and except for a few states, that's pretty much anyone with a by-the-drink license) receives it. A bar manager will feel like he has a lot less to hide than a store manager, who doesn't want you to see what his markup is.

[mickblueeyes]

This is a very confusing subject. I have worked in the industry for almost 8 years and it still confuses me. Here is are some of the basics:

There is a three tier system which is comprised of National Suppliers/Importers, Wholesalers/Local Distributors and Retailers. According to Federal law, booze must flow through the three tier system.

Each state has different laws that do reflect post-Prohibition mentality. Depending on size of state, you may have different territories (TN has 4--W, Central, SE and NE). You will have distributors in each of these areas. In most states, each National Supplier/Importer that wants their good represented in a market may only have one contract with one distributor in each territory. For instance, when Diageo wants to distribute Smirnoff in Knoxville, Nashville, Memphis and Chattanooga, they must establish a distributor in each area at the time of brand registration.

To further complicate matters, most states have a registration process that bottlenecks at a bureaucrat rubberstamper who approves labeling and ultimately accepts or rejects a brand's request to enter the state. Often, this fee can be prohibitive for smaller brands. The fee in TN is $250 per year to register your liquor brand with the state. On a microdistilled gin that only ships 10 6-packs per year, that makes for either expensive product if the National Supplier/Importer adds it to the product or low margins if the S/I eats it. Either way, it is bad for everyone in the system except the Middleman--the wholesaler.

To further convolute the entire situation, each state views wine, spirits and beer differently. In the state of TN, it is delineated as such: If a product is under 6% alcohol, it is a grocery item. If an item is over 6% abv (actually 5% abw), then it is considered a liquor distributed brand and must be sold in a liquor store. So all the beer that is over 6% abv is liquor. Wine is liquor and Liquor is liquor.

In other states, they may delineate differently which allows different sales procedures. I believe NC allows wine and beer sales in grocery stores, but liquor may only be sold in a liquor store. In NC, I believe, all liquor stores are state controlled.

This brings another aspect into play: the state controlled store. In several states, the state not only acts as the retailer, but also as the wholesaler/local distributor. The state purchases in bulk from importers and distributes it across the state to state run package stores. The problem with this is that bureaucrats set the prices and these states often have very high taxes on liquor and little selection.

So the question then is how to improve the selection in your state. My first response: give up. It is not worth it. That being said, I have been responsible for bringing in over 15% of TN's current portfolio of over 3000 spirits. I am a retailer. Here's how I do it.

First, I find the product. That isn't always easy. Importers and National Suppliers don't want to talk to you. Many times, they won't even have websites or if they have a product website, it will be based in the UK or South America or wherever your product is and you will have to find the US importer. I can assure you from experience, emailing people in Europe or South America through the "Contact Us" portion of the webpage is very unlikely to get a response, so finding an importer can be tough if you don't know how to look.

So let's say that you find the importer or national supplier, now you have to convince them to bring it to your state. The first question out of every supplier's mouth will be "Are you a distribute or control state?" If you answer "control", see first response. If you answer "distribute", the fun is just beginning.

So now, if you are a consumer, not a retailer, they will feed you a canned response to get you off the line or take your name and number promising a call back or even add you to their mailing list so that you can be informed when the product comes to your state. Refer to first response.

On the flip side, if you are a retailer, or have a retailer working on your behalf, here is where you can begin to play ball. Before we proceed, back up a smidge. Before you talk to the importer, you need to have a distributor/wholesaler willing to bring the product in; it's not like you can just buy this from the importer. The TTB tends to frown on that in most places. So you approach the Field Manager postiioned person at your local distributorship (they will often have titles like Spirits Manager, Wine Manager, General Wine Manager, Wine Field Manager, etc) and try to get them to play ball. My approach has been simple: Either you get it in for me, or one of your competitors will. You will find someone willing to do it.

So you are now armed with two of the three tiers; you have a retail outlet and a distributor willing to play ball. Now you get that Field Manager's contact info and you are on the phone with the importer. You tell them, "I want your product". They ask about distributors in your area and you provide them with the name and cell number of the distributor you have arranged this ordeal with. Then they will call the distributor and get info about how to enter the state. In TN, once paperwork is filed, it can take up to 90 days depending on the mood of the asshole running things. Once the state is squared away, they will sign a contract with the distributor to bring product into the state (if you are a franchise state, many S/I will balk at signing contracts because once they do, it is for life).

So now the state is on board, the importer is on board and the distributor is on board. Now you have to place and order. Often, in order for it to make sense from a shipping standpoint, you will be required to order a minimum which may be a case, 10 cases, a layer, a half pallet, a pallet or sometimes more. It all depends on the brand, the price, the state fees and how friendly everything has been up and down the tiers. So you place your order for the minimum and the booze is on its way. Depending on what consolidation warehouse the importer uses and where the distributors trucks run, this could take anywhere from 10 days to 3 months. Afterall, unless you want to pay $75/case shipping, they may need to wait until a truck fills up heading your way.

Now here is the real kicker, an aspect we didn't explore. . .what if the importer doesn't want to bring the product to your state? The liquor business is a business. To outsiders it might look like we don't know one end from the other, but I can assure you that the liquor business is one of the most sophisticated models out there. It closely mirrors the food/beverage industry (well, cause that's what it is--Coca Cola with higher taxes).

S/I's have very sophisticated rollout plans based on very expensive marketing strategies. They want to be in every city and every state, but the money has to be there and it has to be logistically feasible. Oftentimes, it is not.

More than any other product, liquor is strongly divided among ethnic lines. If you are a big company, say Diageo, and you want to release a new rum, say Onoronco, where do you do it? Do you release it in Kansas? Not only no, hell no. You release it in South Florida. If you want to release the newest version of Hennessey on a limited basis, do you do it in Knoxville, TN? Nope, you do it in Memphis TN. There are many products that I can't get that are available at the other end of the state. Why? My demographic is different and the S/I doesn't want to bring it to my side of the state b/c they know it won't be profitable.

So there are dozens of factors to consider and it certainly has nothing to do with the appparent "class" of a product. What matters is "what sells".

A short list of products I would love to discontinue because they suck:

Hennessey

Grey Goose

Crown Royal

Jack Daniel's

Hpnotiq

Sizzurp

Jose Cuervo

Bacardi

Glenlivet

Glenfiddich

Macallan

Yet, every day, people walk in my shop and buy them. Why? Because every ounce of their taste has been bought and paid for. So before you go jumping on retailers, distributors and importers about not bringing a bottle of your favorite product to your store, look at the economic cost vs. economic profit. We are all connoisseurs here, but the light is on and burning brightly for the unwashed masses. . .until then, grab a 1.75 of Windsor and mazeltov.

[eje]

Note, moved these off topic posts from the Magic of a Good Mixer topic.

In TN, we can only carry Mixers with 1% abv or higher in liquor stores. The standard fare is Master of Mixes and Finest Call. Add in Bloody Bold Bloody Mary, Red Eye Bloody Mary and Zing Zang Bloody Mary and you have a full roster of what is available.

The unfortunate situation is the lack of gomme syrup (or rock candy), orgeat syrup and fruit purees other than strawberry.

Is anyone aware of a 1% abv lineup that has some higher quality and diversified purees as well as better syrups? I was hoping with the breadth of this board, we might be able to discover one in the vast reaches somewhere. TIA.

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1% alcohol required for beverages to be sold in liquor stores?

So you can't even sell tonic or soda?

That's weird.

Do other states have similar rules?

[mickblueeyes]

1% alcohol required for beverages to be sold in liquor stores?

So you can't even sell tonic or soda?

That's weird.

Do other states have similar rules?

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That is a question best addressed on the booze laws thread. Short answer is that it depends on how the state defines beer, spirits and wine. In TN, anything over 6% is a "liquor distributed item". Anything under 6% is a grocery item. Wine, Spirits and high alcohol beer are sold in liquor stores. Beer under 6% and mixers are sold in grocery stores.

[eje]

That is a question best addressed on the booze laws thread. Short answer is that it depends on how the state defines beer, spirits and wine. In TN, anything over 6% is a "liquor distributed item". Anything under 6% is a grocery item. Wine, Spirits and high alcohol beer are sold in liquor stores. Beer under 6% and mixers are sold in grocery stores.

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Then so shall it be!

Interesting.

As far as I can tell, in California and Arizona, there is no differentiation between the items which can be sold at liquor stores, convenience stores, and grocery stores.

The mixers, groceries, and booze can be sitting on the shelf next to one and other.

On the other hand, in Wisconsin, it seems like anything which contains alcohol that isn't a food item, must be sold in a separate establishment. Or at least a different department of the store separated by some sort of doorway.

By the way, thanks for the great writeup of the three tier system. I learned a few things from it!

[slkinsey]

1% alcohol required for beverages to be sold in liquor stores?

So you can't even sell tonic or soda?

That's weird.

Do other states have similar rules?

I've never seen soda or any other nonalcoholic mixers for sale in a NYC liquor store. For that matter, you can't even buy beer in a NYC liquor store.

[viva]

In other states, they may delineate differently which allows different sales procedures. I believe NC allows wine and beer sales in grocery stores, but liquor may only be sold in a liquor store. In NC, I believe, all liquor stores are state controlled.

True - as a new transplant to NC I just verified this the hard way. I thought I had made progress in moving to NC from Pennsylvania when I saw the independently-owned wine stores and beer/wine for sale in the grocery stores. I was happy, feeling secure in the consumer choices that only capitalism can provide.

Then I found myself in need of bourbon on a Sunday. The lady at the wine store chuckled at me and directed me to the ABC (Alcohol Beverage Control Commission) store. Which, of course, is not open on Sunday. I managed to get there on Monday, and must say that the Wake County ABC I went to is just about the most dismal liquor store I have ever been in. I was also in need of some kirsch... and the one brand that was available did not look fit for human consumption. Maybe some ABC's are better than others.

@% Communism! The State should not be selling goods. Where is Milton Friedman when I need him?

[The Hersch]

Maybe some ABC's are better than others. 

As far as what an ABC store in NC stocks is concerned, it's at the county level, so I wouldn't expect another Wake County store to have a better selection of kirsch. As I posted somewhere, I recently fled Wilson County back to DC, but down there I had to go to Wake County to get Campari. Washington DC is liquor-and-wine-store heaven, on the other hand. We actually have some of the most untrammeled commerce in the country when it comes to alcohol. For example, if a retailer wants to sell a particular wine from Spain, say, and no importer/distributor carries it, the retailer can import it directly. There's also a lot of competition in retail sale of spirits, so prices are low.

[Snowy is dead]

So it looks like I woulld have an easier time figuring out string theory than getting stuff brought in. I hadn't even considered the demographic issue...yikes.

[viva]

Maybe some ABC's are better than others. 

As far as what an ABC store in NC stocks is concerned, it's at the county level, so I wouldn't expect another Wake County store to have a better selection of kirsch.

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Gah. Maybe I'll map out a close ABC in Durham or Chatham county and see how the selection differs in general.

Pulled from the NC ABC pricing website:

On every delivered case of spirituous liquor approved for sale, there is an 80.8 percent markup. Therefore, the selling price at retail, in addition to cost of goods, includes:

freight

bailment fee that funds the ABC warehouse private contractor

surcharge fee that funds the ABC Commission's budget

federal tax 

state tax

local ABC Board markup

rehabilitation tax

other miscellaneous tax

Is an 80%+ markup competitive?

[Kent Wang]

Does DC, as a federal district, have no liquor laws beyond the federal ones?

[The Hersch]

Does DC, as a federal district, have no liquor laws beyond the federal ones?

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DC has its own full-blown set of liquor-related (and everything-else-related) statutes. As Article I of the US Constitution gives Congress exclusive legislative authority over the federal district, in a sense all DC laws are federal laws, and we don't get a vote. In practice, most enactments of our City Council are unmolested by Congress, other than the city budget, which has to be passed by Congress as an appropriations bill and gets fiddled with by grandstanding and pandering Congresscritters to score points back home.

[Chris Amirault]

I've another question along these lines.

Let's say I'm a liquor retailer or a bartender and I buy a case of, say, Montecristo Premium Blend rum on vacation in NY. When I get back to RI, can I sell it in either place? Does it depend on the state?

[slkinsey]

My understanding is that you cannot legally take liquor purchased on one state and sell it in another. This is exactly why it was not possible, before Laird's bonded was available in NY State, for NYC bars to simply purchase the spirit in NJ and sell it in their bars.

To continue examining your scenario... if the Montecristo rum were legally sold in the both states, it would be fairly difficult for the liquor authorities to figure out what you had done. But, if you were found out, you'd be in big trouble.

Edited August 19, 2007 by slkinsey (log)

[eje]

I believe that is called "bootlegging".

My understanding, is it goes back to the three tier system.

Liquor sold in a state must be purchased from the liquor distributors of that state.

Also, there's not much point.

If you're buying a case of Montecristo at retail price, how could you re-sell it for a profit?

Edited August 19, 2007 by eje (log)