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Recent Updates at the Alcoholic Beverages Control Commission

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Recently, two new updates were posted on the Alcoholic Beverages Control Commission’s (“ABCC”) website. The first, effective May 28, 2013, is an advisory regarding obtaining a Certificate of Good Standing (COG) in connection with liquor license applications. Obtaining a sign-off from the Department of Revenue (DOR) can sometimes be a drawn-out process, so now the ABCC will accept COGs as part of the liquor license applications submitted to the local liquor licensing authorities. To obtain a COG from DOR, the applicant should go to DOR’s website and follow the links to obtain a COG. In situations where a license is being transferred, both the Buyer and the Seller should obtain the COG.

The second update to the ABCC’s website is the list of active state licensees. These licenses include: Farmer Brewery, Farm Distillery, Farmer Winery, Wholesalers, Manufacturers, Winery Shipment, and Caterers Licenses. The retail licenses issued by the local municipalities and approved by the ABCC are not currently listed on this site.

These updates are part of an ongoing process at the ABCC to make the more transparent and efficient for all those involved in the liquor licensing process.

Recent ABCC Decision a Win for Liquor License Applicants

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The Massachusetts Alcoholic Beverages Control Commission (ABCC) recently issued a decision in favor of a liquor license applicant in Falmouth.

Murphy’s Package Store (Murphy’s) applied to the Falmouth Board of Selectmen to move from its existing Main Street location to new premises approximately four miles away in West Falmouth. After hearing testimony both in favor and opposed to the move, the Board of Selectmen voted 3 to 2 to deny the application. The issues of traffic and parking at the new location were hot topics at both the Falmouth hearing, and at the subsequent appeal before the ABCC.

The ABCC disapproved of the Board of Selectmen’s denial, and remanded the matter back to the Board with the recommendation that the application be granted. In doing so, the ABCC made statements that may help counter some of the common tactics used by opponents to liquor license transfers.

All cases involving the issuance or transfer of liquor licenses in Massachusetts involve a determination of a public need for the license. However, a licensing board in reaching a decision concerning public need is required to make specific findings that are supported by the record. Regarding Murphy’s, the ABCC stated that the Board of Selectmen’s denial was inadequate as it merely recited a summation of the opponents who testified about parking and traffic. The [ABCC] finds this decision to be a general finding (emphasis added). To distinguish, the ABCC cited the case Exotic Restaurant Concepts and stated that [r]ecitals of testimony do not constitute findings. See Exotic Rests. Concept, Inc. v. Boston Licensing Board, Suffolk Superior Court, C.A. No. 07-3287 (Borenstein, J.). In denying the application for transfer, the Board of Selectmen merely recited the statements of the opponents concerning traffic and parking, and this is insufficient to deny a license transfer. In fact, the record reflected that adequate parking was available and neither the Police Chief nor Fire Chief had any objections to the transfer.

Additionally, the ABCC refused to give any weight to one opponent’s statement that there existed another package store located less than ½ mile away from the proposed transfer location. The ABCC stated that “[t]his distance between the existing package store and the proposed location of Murphy’s was not verified to the [ABCC], nor was it explained how this distance was calculated or calibrated.”

The ABCC noted that a single liquor store in one area of a town could be considered a monopoly. The ABCC in its decision stated that “the action of the Local Board in denying this application has the effect of continuing in place the monopoly held by the sole § 15 license in this section of the town.”

Based on the ABCC’s Murphy’s decision, liquor license applicants are advised to prepare to substantively counter objections that may be raised by opponents. Common general objections such as traffic, parking, and proximity of other package stores can be countered by a license applicant who builds a strong and detailed record at the hearing.

Howard J. Wayne to Chair MCLE Panel on Alcohol, Food & Entertainment Licensing

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Wayne, Richard & Hurwitz LLP invites you to join us for a seminar entitled Alcohol, Food & Entertainment Licensing & Liability Update 2013. The seminar will be taking place on Thursday, April 11th from 2:00 to 5:00 p.m. both via Webcast and live at the MCLE Center located at 10 Winter Place in Boston. Howard J. Wayne, founding partner of the firm, will be chairing our esteemed panel. The panel will include:

  • Kim S. Gainsboro, Esq.  Chairwoman, Alcoholic Beverages Control Commission
  • William Kelley, Esq.  General Counsel, Alcoholic Beverages Control Commission
  • Paul M. Maleck, Esq.  Doherty, Wallace, Pillsbury & Murphy P.C.
  • Paul Mullan, Esq.  Commissioner, Worcester License Commission
  • Nicole Murati Ferrer, Esq.  Chairwoman, Licensing Board for the City of Boston

At this seminar, you will hear directly about the licensing process directly from the decision makers and leading practitioners. The law surrounding licensing and liability is always changing; this program will help you and your clients stay current on this challenging area of the law. The conclusion of the program will include an “Ask the Experts” session for attendees to get answers to their licensing questions.

Please click here to register to attend the seminar or click here to sign up for the live Webcast. The panel is looking forward to fielding your questions!

ABCC Rules For Gas Station Licensee

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Not that long ago, it was quite unusual to find alcoholic beverages for sale at a
gasoline station in Massachusetts. However, the advent of convenience stores linked to gasoline stations is rapidly changing that situation.  A recent decision by the Massachusetts Alcoholic Beverages Control Commission (ABCC) illustrates the trend.

In 2011, Northgate Mobil in Revere filed an application with the Revere Licensing Board to obtain a license to sell all alcoholic beverages, for off premises consumption (i.e., a “package store” license).  Northgate Mobil already held an off-premises consumption license to sell wine and beer, and wanted to upgrade to sell spirits as well.  In December 2011, the Revere Board denied Northgate Mobil’s application, stating in part that a liquor license was inappropriate for an establishment “so closely associated with the operation of motor vehicles”.  The applicant appealed the decision to the ABCC, and the ABCC recently ruled in favor of Northgate Mobil.

The ABCC cited a number of factors in support of its disapproval of the Revere Board’s denial.  For instance, Northgate Mobil had never been disciplined for violating laws or regulations relating to alcohol sales, and explained to the ABCC why that was no accident  “the store’s owner spends approximately 50 hours a week on the premises, and all of the store’s employees and managers are trained in-house in the proper handling of alcoholic beverages sales.”  Furthermore, not only was there no local opposition to the expanded license, but one city councilor appeared at the hearing and declared support for the license on behalf of himself and his constituents.

Intriguingly, the ABCC also took issue with the Revere Board’s core finding that the application should be denied because Northgate Mobil was “closely associated with the operation of motor vehicles.”  Even though the applicant operates a gas station, the ABCC quite logically noted that “All off-premises alcoholic beverages licenses by their very nature generally involve an individual driving to the premises, purchasing the alcohol, and then leaving the premises with the alcoholic beverages and consuming it somewhere else”.

Given the ABCC’s recognition that most package store sales occur to consumers who have driven to the store, whether or not it is located at a gas station, their roadmap was clear the ABCC remanded Northgate Mobil’s application to the Revere Board for further consideration, with the recommendation that Revere grant Northgate Mobil’s application for an all alcoholic beverages license.

Farmer-Breweries

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The Boston Globe and Boston Herald have reported on a recent change or clarification in policy regarding “farmer-brewery” licenses by the Massachusetts Alcoholic Beverages Control Commission (ABCC).  Farmer-brewery licenses are intended to encourage the development of “domestic farms”, and appear in the regulatory statute alongside similar provisions for licensing of farmer-wineries, pub-breweries, and farmer-distilleries.

In late July, the ABCC denied an application for a famer-brewery license to be located in Everett, Massachusetts.  The ABCC followed up on August 1 with an Advisory, announcing that all farmer-breweries will henceforth need to demonstrate that at least half of the grains or hops needed to produce their malt beverages are grown by the licensee.  In an interesting exception, the ABCC announced that the “grown by the license” requirement could be satisfied if the licensee or applicant merely “contracted exclusively” for the rights to the yield of cereal grains or hops produced from acreage of domestic farmland.

In other words, the ABCC ruled that a farmer-brewer needs to actually grow at least half of the cereal grains or hops needed to produce its malt beverage “unless someone else grows the grains and hops for them, both exclusively and domestically”.

Some remaining confusion stems from whether “domestic” as used in the statute means “from within Massachusetts” versus “from within the United States”.  Most observers think the ABCC interprets “domestic” to mean “from within Massachusetts”, such that “farmer-brewers” would need to obtain their grains and hops largely from within Massachusetts.

That interpretation, however, could well be unconstitutional, under a line of recent court cases from around the country interpreting farmer-winery licenses.  Those cases basically hold that under the Commerce Clause of the US Constitution, a state cannot favor in-state interests over out-of-state entities in its liquor licensing scheme.

Stay tuned, the Globe reports that brewers are meeting next week with state treasurer’s office (which oversees the ABCC).

Beer Carts

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Golfers are notorious for continually seeking quick and not-so-quick fixes to better scores.  They buy expensive new drivers, hybrids and “game improving” irons.  They switch to golf balls touting clever patterns of aerodynamic dimpling.  They gobble up swing aids and instruction books.  They pay extra to play better conditioned courses.  Some – relatively few? – golfers even try the extreme measure of better conditioning their own bodies.   Nevertheless, despite all the time and money spent to improve their games, last time we checked, the statistical evidence matched our personal, empirical observations – none of it works.  In other words, the average golf score isn’t actually going down, and hasn’t for a long time.

Which is not to say golfers haven’t experienced real advances on the golf course.  One area of the golf world that’s definitely improved of late, in Massachusetts, is in one of everyone’s favorite aspects of the game – the beverage cart.  For years, many golf courses in Massachusetts included bars which sold beer, wine and/or cocktails pursuant to so-called restaurant or “pouring” licenses pursuant to M.G.L. Ch. 138 §12.  Like any other bar or licensed restaurant, however, patrons had to imbibe right there, inside (or right next to) the premises.

In the Spring of 2009, however, the State Alcoholic Beverages Control Commission (“ABCC”) issued Guidelines that for the first time admitted Massachusetts to the ranks of states which allow beer and other alcoholic beverages to be legally purchased and consumed outside, on the links, where the game is played and alcoholic assistance is most directly needed.  Yes, two years ago, beer carts finally sputtered their way onto courses and up and down golf cart paths throughout Massachusetts.

As an aside, some might wonder how pre-2009 Massachusetts golfers dealt with their poor play (of their notably frustrating sport) without immediate access to alcoholic beverages.  Others would note that golf bags then and even today possess numerous capacious pockets, and follow the melting ice to their own logical (and sudsy) conclusion.

But back on the legalized links, the ABCC’s 2009 Guidelines set forth rules for the legal sales and consumption of alcoholic beverages out on the course in Massachusetts.  To summarize:

1.  Sales and service of alcoholic beverages outside on the  course has to first be authorized and approved by the local licensing authorities AND by the ABCC.  No unlicensed sales – ever.

2.  Once properly authorized and approved, ALL alcoholic beverages out on the course have to be obtained from the licensee.  No more smuggled six-packs; not even any unauthorized nips or flasks.

3.  Signs have to be posted at conspicuous locations, advising “no alcoholic beverages permitted beyond this point”.

4.  Of course, all the usual restrictions still apply:  No sales to minors.  No sales to intoxicated persons.  No delivery of more than two drinks to one patron at any one time. No beverages carried away from the licensed premises.

That last restriction – no “carry-out” – leads to one unusual wrinkle in the legal, licensed sale of alcohol out on golf courses.  Most restaurants, bars and other licensed premises don’t have roads, streets or even highways running through them, whereas many golf courses do.  So, how did the ABCC handle streets and other “public ways” right in the midst of licensed premises?

The ABCC’s golf course Guidelines on this point are clear, and clever.  First, if your course is intersected by a public way, and you want a single license to cover both sides of the street (and who wouldn’t?), all beverage carts must get a transportation permit from the ABCC.  Just like the big beer delivery trucks have to have to operate out on the roads.

Second, and perhaps even less obvious except to the liquor licensing cognoscenti, “No licensee shall permit any patron to possess or carry alcoholic beverages in or on a public way.”  So, if Mr. or Ms. Golfer buys a beer on the second hole, and must cross a street to get to the third hole – drink fast!  Or, think of your local beer cart girl as the pre-security gift shop at the airport, and that street between the second and third holes as the TSA – no liquids (of the alcoholic beverages sort) permitted through security!

Fore!

Beer Towers

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Ever heard of a “beer tower”?

For the uninitiated, beer towers are sort of a pitcher on steroids — a type of mini, skinny, new-aged keg. You can view beer towers for home use [alas, empty] from $35 on Amazon.  There are also more commercial versions.

A single beer tower typically holds as much liquid as two or three pitchers (or, as we say around my house, “one Uncle Lester”). Some beer towers have options, like an ice chamber to keep the beverage of your choice chilled while you and your posse “work” on emptying the tower. Others have interior lights to entertain if not illuminate the beery-eyed. No word yet on automatic transmissions, power steering, audio systems or – heaven forbid! – brakes.

Which gets us to the legal part of this blog. Certain local restaurants have used beer towers to serve beer in their licensed establishments. Indeed, we’re told that beer towers are particularly favored by the considerate kind of folk who hate to inconvenience their fellow patrons by monopolizing a server’s time in continually refilling their glasses or pitchers.

Which leads to the “issue,” as we say in legalese. For, you see, bulk consumer beer table service is not necessarily favored by the licensing authorities. Indeed, years ago the Massachusetts Alcoholic Beverages Control Commission (“ABCC”) adopted a set of regulations (“Regs”) that are now universally known as the “Happy Hour Regs”. For those of us who matured prior to their adoption – and remember real, live, actual Happy Hours – the Happy Hour Regs really should be called the “Elimination of Happy Hour” Regs, since they prohibit a number of once common methods of enticing people into bars and restaurants to enjoy themselves and spend money while overdrinking – practices including free drinks, reduced-priced drinks, increased-volume drinks, fixed-price drinking, and drinking games, contests and prizes. The Happy Hour Regs are reprinted in full on the ABCC’s website.

Two particular Happy Hour Regs with potentially specific application to restaurant beer towers prohibit (1) the delivery of “more than two drinks to one person at one time”, and (2) the sale, offer to sell, or delivery of “malt beverages or mixed drinks by the pitcher except to two or more persons at any one time”. Those of you who’ve gone to law school, or perhaps have just developed an unholy love for beer towers, might point out that a beer tower could be considered a “single” drink, since after all a tower IS a single if somewhat super-sized container. We might call this the “Uncle Lester Proviso”. Other quibblers might note that a beer tower is not a “pitcher”. We might call this – especially around Yankees fans – the “Carl Pavano Exception”.

However, such creativity would certainly be lost on the licensing authorities in Boston, and probably just about anywhere.  The March of Progress is not always a straight line.

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