The laws—they are (possibly) a-changin’

May 10th, 2016 • by Jackie Sudano
Jackie Sudano

Jackie Sudano

    Jacqueline Sudano advises beverage alcohol clients on compliance with federal and state level alcohol regulations and statutes related to the marketing and promotion of brands and products. She works with suppliers, importers, wholesalers and retailers in the wine, malt beverage and spirits industries. These businesses are navigating a maze of international, federal and state laws, rules and regulations impacting their products, so I offer litigation, transactional and regulatory counsel that helps them achieve their goals while offering a great product. Her practice also includes the management of nationwide liquor license applications and approvals for client acquisitions and corporate restructuring, as well as industry-related contests and sweepstakes.

    On April 13, Governor Cuomo announced the findings of the Alcoholic Beverage Control Law (ABCL) Working Group, which had been assembled in November 2015 to take a hard look at the current ABC laws here in New York State and figure out how to make them work in our modern world. The laws date back as far as 80 years, and there is clearly a need in some circumstances to modernize the law to fit with our booming industry, while simplifying it, if possible.

    A meeting of people from all different areas of the business with varying and even competing interests (led by the State Liquor Authority’s (SLA) Chairman Vincent Bradley) agreed on 15 recommendations that it made to the governor. While you can read the full report at this link—https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/reportfinal41316.pdf—I’ll highlight some of the most applicable provisions for craft brewers here.

    1) Reorganizing the ABC law—The Working Group proposed an organizational overhaul of the ABC law, making things clearer and more logical for businesses that are governed by it.

    2) Modifications to solicitor’s permit—Craft manufacturers on the Working Group noted the financial hardship that the cost of the permit and the fee for the surety bond imposed on small businesses (since the employer commonly covers the cost of the permit and the surety bond), and so the Working Group has recommended that the fee be either eliminated or drastically reduced, the duration of the permit be extended and the requirement of posting a surety bond for the permit be eliminated.

    3) Combined manufacturing licenses—Many craft brewers have both a regular brewery permit and a farm brewery permit, which has been allowed since 2012 thanks to administrative action following the governor’s 2012 Wine, Beer & Spirits Summit. However, the Working Group has recommended that an amendment to the ABC law be made that would allow the SLA to issue one license that covers multiple manufacturing activities. It would not cut down on licensing fees, but it would lessen the administrative burden of filing and renewing separate licenses every few years.

    While there are no current plans to implement the recommendations, the overall message is clear —there are many things that can be revised in the current ABC law, and it is in everyone’s interest to do so.

    In the meantime, and likely because the SLA chairman himself knows how confusing the ABC law can be, the SLA has created a “one stop craft beverage shop” where craft manufacturers can submit questions about license privileges and operations, by e-mailing craftbev [at] sla [dot] ny [dot] gov. Entrepreneurs looking to start their own craft manufacturing businesses are also encouraged to ask questions via the new e-mail address.