Senate Bill 155/House Bill 460
There's been a lot of buzz here in North Carolina regarding legislation pointed at the alcoholic beverage industry. You're likely already aware of House Bill 500's potential impact. If not, hop over and read through our post about it here.
Yet another piece of legislation currently in front of the North Carolina General Assembly is Senate Bill 155, affectionately known as the "Brunch Bill.” As with each of our Legal Updates, this post takes aim at Senate Bill 155's intended change and what is perhaps more meaningful than when you can imbibe with your eggs Rothko.
The "Brunch" Part
The "Brunch Bill's" short title comes from Section 4 of the bill. Section 4 would allow each North Carolina county to adopt their own respective ordinances permitting licensed restaurants to sell alcoholic beverages for on-premises consumption beginning at 10:00 AM Sunday mornings.
Current law in North Carolina prohibits all alcohol sales before noon on the Lord's day. As you can imagine, granting restaurants the ability to crank out their signature Blood Marys and Mimosas a couple of hours earlier on Sundays will have a pretty substantial impact on customer experience. Not only that, but incentivizing an earlier dining experience on Sundays will certainly create a positive economic impact across the board. While we acknowledge this change to be the easiest sell and perhaps the most intuitive to the North Carolina citizenry, we know Senate Bill 155 to be a bit more ambitious with respect to the growth of the alcoholic beverage industry and its economic impact here in North Carolina.
The Spiritous Liquor Special Event Permit
The balance of Senate Bill 155 is a direct acknowledgment of the serious growth happening within the craft distilling industry. Senate Bill 155 looks to add Section 18B-1114.7 to the existing ABC framework, which would create a spirituous liquor special event permit. A spiritous liquor special event permit would allow a licensed North Carolina distillery to organize free tastings hosted by off-site locations, including ABC stores, trade shows, conventions, malls, and any other event the Commission feels aligns with the purpose of the provision and balances with public policy. For an industry that is still getting its legs in North Carolina, the ability to offer off-site product tastings is a monumental proposition for current and prospective North Carolina distilleries. Without a doubt, enhancing the ability of individual players to meet their target consumers where they are and to engage with buyers at local ABC branches stands to boost short term growth in an industry still throttled in a big way by government control.
However, Senate Bill 155 does lay out some specific limitations to these off-site samplings. The application of those limitations is split between the distillery holding the permit and the venue hosting the sampling. To illustrate, the permit-holding distillery must conduct the tasting. The permit-holding venue must pour the samples. Essentially, the person responsible for producing the product cannot be the one handing you the sample.
Further, each consumer is limited to one .25 ounce tasting sample of each product made available for sampling, not to exceed 1.5 ounces in one day. The purpose is awareness; not to prevent samplers from getting in their cars. And in case you are of the procrastinating variety, its helpful to know that the permit holder must also provide written notice to the ABC Commission at least 48 hours before the tasting. There is a one-year record-keeping accompaniment, too.
For more ambitious event planners, specific Commission approval is in your future. Senate Bill 155 prevents each sampling venue from hosting more than three individual permit holders at a single tasting. If you're looking to make a distillery tasting a real thing, the local ABC board may grant approval and designate a tasting area for participating consumers.
Our favorite piece of Senate Bill 155 would expand the ability of North Carolina's distilleries to sell directly to consumers. Section 1 of the bill would amend current language under to N.C.G.S. 18B-1105(4) to read in relevant part, "the selling distillery is limited to selling to each consumer, no more than five bottles of spiritous liquor per 12 month period."
For reference, the current limit on direct sales to consumers is but one bottle per consumer per 12 month period. While five bottles is still modest, we're optimistic approval may imply a more progressive outlook toward the distilled spirits side of the craft beverage industry overall. Given the recent wave of related alcoholic beverage focused bills, Section 1's simple change flows neatly with North Carolina's path toward fostering the type of business and community growth happening all over the country.
Senate Bill 155 is a welcome addition to North Carolina's 2017 legislative session. The points highlighted above, along with a couple, more subtle proposals (see: auction permits), demonstrate that the growth of craft liquor will over time become free to parallel that of craft beer. At bottom, we acknowledge that North Carolina continues shoot its shot and make itself known as a state where the craft beverage industry can grow and flourish.
Come chat with us on social media (@CraftedCounsel). If you have any questions, please feel free to reach out to us.
Until next time. Cheers!