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Navigating the World of Beer and Wine Law

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By Casey C. Sullivan, Esq. on March 11, 2016 5:57 AM

When we talk about heavily regulated industries, we are usually talking about things like toxic waste management, health care providers, or public utilities. But there's one highly regulated trade that often goes unrecognized: the beer, wine, and spirits industry. The mess of regulations, and regulatory bodies, that make up the industries is, well ... enough to make you drink.

But thankfully, the beer, wine, and spirit industry's regulatory system isn't completely unnavigable. If you can tell the difference between a Loire valley Cabernet Franc and Beaujolais, you can probably figure these out as well. Here are some tips.

Start With the Basics

The main federal law regulating the industry is the Federal Alcohol Administration Act. The FAAA hasn't changed much since it was passed in 1935, but federal regulations have. The FAAA empowers the Alcohol and Tobacco Tax and Trade Bureau (formerly the Bureau of Alcohol, Tobacco, and Firearms), to promulgate relevant beer, wine, and spirit regulations. One of the major impacts of the federal rules, established post-Prohibition, is the creation of the industry's "three-tier system:" wholesalers may sell only to retailers and retailers only to consumers.

Those rules must be balanced with state and local laws. Most states have an "open" system for alcohol manufacture, distribution, and sales -- subject, of course, to state rules and regulations.

That means that if you're in California, say -- and after all, if you're practicing, or want to practice, wine law, there's a fair chance you're in California -- California's Alcoholic Beverage Control Act and related regulations govern. Those rules set out things such as the system for liquor licenses, brand registration, and restrictions on free alcohol samples.

Go to the Experts

Of course, there are plenty of legal issues and questions involved in such a system. For example, the three-tiered system give wholesalers a virtual monopoly on distribution which can keep some smaller brewers and vintners out of the market. There are also questions about direct-to-consumer sales on the Internet, and just what sorts of promotional benefits might violate "tied house" rules. (Tied house laws limit the sorts of inducement a company can give a retailer.)

Thankfully, you don't have to face those questions alone. (Of course, with a quality drink in hand, you're never really alone anyway, right?) There's plenty of valuable information in guides like Aspatore's Wine and Beer Law: Leading Lawyers on Navigating the Three-Tier System and Other Regulations on Alcoholic Beverages. (Disclaimer: Aspatore is one of FindLaw's sister companies.) Part of the "Inside the Minds" series, it brings together leading beer and wine law practitioners to discuss major issues facing the industry.

Like a nice Bordeaux, the guide is a good blend, covering everything from dealing with local regulations to avoiding pitfalls. Consider it as having a good sommelier at your beck and call -- but for beer and wine laws instead of wine pairings.

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