By Peter Berdon, Esq.
Connecticut has seen the growth of its farm wineries, the rise of craft breweries and, now with the passage of Public Act 15-15, is poised to launch craft distilleries. This session the legislature further supported the production of craft wine and beer by expanding the ability of farm wineries and beer producers to market their products and, in a bold new step, allowed restaurants to sell growlers for off premises consumption.
Connecticut, like many other three tier systems adopted after the repeal of prohibition, sought to insulate the consumer from interaction with the manufacturer. However, over time exceptions developed, first with the invention of the farm winery followed by the development of brew pubs. Section 5 of Public Act 15-24 seeks to provide parity for distilled spirits manufacturers.
What does Section 5 provide?
- Establishes a new sub-class of a manufacturer’s license for manufacturers who produces less than twenty-five thousand gallons of distilled spirits, wine or beer.
- Allows “small manufacturers” to sell at retail from their permitted premises.
- Retail sales are limited to one and one-half liters per person per day.
- Retail sales are further limited to no more than five gallons per a person in any given two-month period.
- Retail sales can only occur during the same hours as other off-premise retail sales occur (generally Monday –Saturday 8 am to 10 pm, Sunday 10 am to 6 pm, but not on Thanksgiving Day, New Year’s Day or Christmas).
- Tastings of spirits may be offered provided that they are free.
- Tastings shall not exceed two ounces per patron per day.
- The hours of tastings are limited to 10:00 am to 8:00 pm Monday through Saturday and 11:00 am to 8:00 pm on Sunday.
- No tasting shall be offered to a minor or an intoxicated person.
- Holders of a manufacturer’s license who sell more than ten thousand gallons of spirits, beer or wine cannot sell at wholesale to retailers, but rather must sell to a wholesaler who will in turn make sales to retailers.
- Eliminates the provision allowing manufacturers to obtain a wholesaler license.
What is the effect of Section 5?
Section 5 of PA 15-25 provides small manufacturers the opportunity to make their products and to directly develop their relationships with their customers. The data shows that craft products produced by these small manufacturers are most likely to be consumed by millennials and that they desire to be “connected” to the products they consume. The changes implemented by Section 5 directly address this trend.
At the same time, then, enactment of Section 5 strengthens and reaffirms the “three tier” system of distribution. This provision clarifies that “large manufacturers,” those selling more than 10,000 gallons per year, must use the three trier system of distribution.
Section 8 of PA 15-24 allows farm wineries to sell brandy manufactured off their premises provided the fruit was grown within the state of Connecticut. Significantly, the farm winery that is selling the brandy does not have to grow the fruit. Nor does the fruit have to be grown on another farm winery. This provision will allow craft producers to procure fruit from any Connecticut producer, distill the brandy and then sell it through any one of the thirty-seven farm wineries and through farm wineries at farmers markets.
Beer at farmers’ markets
All classes of beer manufacturers (manufacturers, brew pubs and brewpubs/manufacturers) can now, under Section 10 of PA 15-24, obtain a permit allowing them to sell their beer at farmers markets.
This provision requires:
- The applicant must hold a manufacturer, brew pub or brewpub/manufacturer permit;
- Be invited to the farmers’ market; and
- Have an authorized representative present.
The permit will allow beer producers to sell their beer:
- At an unlimited number of appearances at up to three farmers’ market locations;
- Sell up to five liters per person per day.
- Sell in sealed bottles for off-premise consumption.
For years now Connecticut restaurant and café consumers have been able to take their unfinished wine bottle “to go.” This year, restaurants seeking to capture more revenue and to compete in the expanding craft beer market, sought and obtained the ability to sell beer growlers “to go.” Public Act 15-244 (Sections 78 & 79) allows restaurants and cafés to sell, in sealed bottles for off-premise consumption, up to four liters per person per day. The bottles, however, must be provided by the restaurant or café and cannot be paid for by the wholesaler or manufacturer.
The foregoing is intended as general information only and not as legal advice. Contact an attorney to get advice about your particular circumstances.
Peter A. Berdon: Attorney Berdon, a partner with Berdon, Young & Margolis, PC, has represented wholesalers, manufacturers, package stores, restaurants and bars before the State of Connecticut DCP and the Federal TTB as well as in litigation matters in court since being admitted to practice in 1991. He can be reached at firstname.lastname@example.org or www.bymlaw.com