Beer Festival Organizers to Change Their Process Following Increased Enforcement of State Alcoholic Beverage Control Act
According to The Post and Courier, beer festival organizers in South Carolina are facing new hurdles as they plan their upcoming events. The problem stems from recent increased enforcement of a state law that is 20 years old. The Alcoholic Beverage Control Act,” or “ABC Act,” as it is most commonly known, sets forth a few key provisions that are important to understand for those, including nonprofits, who plan to include alcoholic beverages at their events this year.
The ABC act establishes a three step process for obtaining alcohol.
- The producer manufactures the alcoholic beverage, and sends it off to a wholesaler.
- After a wholesaler receives the shipment, the wholesaler distributes it to retailers.
- Each retailer receives product, which in turn is sold to consumers.
In effect, the law essentially requires a middle man. The law was designed to protect the consumer from frequenting bars unduly influenced by a single producer, to give consumers choices. Without wholesalers, retailers (i.e. bars) would likely only carry beverages from one or two producers, because those producers could offer special deals and direct incentives to ensure their product is front and center at all times. Wholesalers play a role in ensuring that when you frequent your favorite bar, you can select from a number of beers, wines, and liquors.
Although it may have not been the intent, the ABC law also makes it difficult for groups to organize festivals and charity events that feature alcoholic beverages. For instance, a beer producer, like Budweiser, cannot donate alcohol to a charity group for a special event, because doing so would circumvent the wholesaler requirement.
The practical effect is that producers, like a microbrewery, are going to have a difficult time showing of their creation. Charity groups may be more limited in their attempts to secure donations and reduce the cost of an event. Although the law has been in existence for 20 years, this wholesaler requirement did not previously stop producers and charity groups from collaborating in this way.
Recently, the S.C. Law Enforcement Division (SLED) announced increased resources to enforce this preclusion. While a spokesman from SLED stated that “there has been no change in the laws or enforcement strategy,” he did explain that “additional agents have been added each year as funding permitted.” Over the period of five years, SLED has increased the size of their alcohol unit by 1,400% – to a total of 30 agents. An increase expected to be the primary source of newfound enforcement of the law.
While SLED enforces the law, the Department of Revenue (DOR) sets the protocols for enforcement. When a spokeswoman from DOR was asked if a brewery could legally pour its new beer at a beer festival, she responded, “A brewer could be next to their beer stand and educating the customers about their products, but cannot provide bartending services off of their premises.” As you can see, this process is likely to be much more difficult and confusing than in the past, and many people may end up with costly fines or revocation of their liquor licenses. If you find yourself in this situation or any other related to Alcohol Beverage Licensing (ABL), call the South Carolina ABL attorneys at Strom Law Firm at (803) 252-4800 for a free consultation.