scanpo webinar - august 3, 2016 Your Event May Just Be Illegal: What You Need to Know About Newly Enforced Beverage Rules

bristow beverage law, llc presented by: bristow beverage law, llc

THE BACKGROUND ON ALCOHOL LAW IN SOUTH CAROLINA BRISTOW BEVERAGE LAW, LLC THE BACKGROUND ON ALCOHOL LAW IN SOUTH CAROLINA SCANPO

BRISTOW BEVERAGE LAW, LLC THE BACKGROUND South Carolina alcohol sales function on a three-tier system - manufacturers (1), distributors (2), and retailers (3) This system was adopted after Prohibition and is the manner by which alcohol gets to consumers. All states carry this system in some form. The most recent laws in South Carolina on this topic were passed in the 1990s, but it goes back a lot longer.

What about special events law? bristow beverage law, llc What about special events law? SCANPO

SPECIAL EVENTS IN SOUTH CAROLINA BRISTOW BEVERAGE LAW, LLC SPECIAL EVENTS IN SOUTH CAROLINA In the past, these were treated differently than they are today. Obviously, there is some distinction made between for profit events and nonprofits. The law is now going to treat any special event as a retailer.

the law on retail and manufacturers bristow beverage law, llc the law on retail and manufacturers As to wine, the law reads: [with certain exceptions], a manufacturer of wine . . . must not sell, barter, exchange, transfer, or deliver for resale wine to a person not having a wholesale permit . . . [and] . . . a manufacturer of wine . . .must not furnish, give, rent, lend, or sell, directly or indirectly, to the holder of a retail permit any equipment, fixtures, free wine, or service. The beer law is basically the same: A manufacturer or brewer must not sell, barter, exchange, transfer, or deliver for resale beer to a person not having a wholesale permit . . . [and] . . . a manufacturer, brewer, importer, or wholesaler of beer . . . must not furnish, give, rent, lend, or sell, directly or indirectly, to the holder of a retail permit any equipment, fixtures, free beer, or service. Liquor follows the same provisions.

BRISTOW BEVERAGE LAW, LLC What’s a service? SCANPO

BRISTOW BEVERAGE LAW, LLC WHAT’S A SERVICE? GREAT ANSWER - WE DON’T KNOW. It isn’t defined anywhere in the Code or Regulations. If we give it its normal meaning, it can mean a lot of things - even the things that DOR hasn’t declared to be illegal yet. Things we know to be services now: bartending, providing equipment for pouring, and handling the product. Things declared not to be a service: education by the manufacturer.

WHY IS THE LAW WRITTEN THIS WAY? bristow beverage law, llc WHY IS THE LAW WRITTEN THIS WAY? SCANPO

WHAT IS THE LAW WRITTEN THIS WAY? BRISTOW BEVERAGE LAW, LLC WHAT IS THE LAW WRITTEN THIS WAY? Consumer Protection. Prevention of tied houses such as are seen in the U.K. Prevents undue influence on retailers which was one of the factors that is argued to have led to Prohibition.

bristow beverage law, llc what is changing? SCANPO

WHAT IS CHANGING FOR EVENTS? BRISTOW BEVERAGE LAW, LLC WHAT IS CHANGING FOR EVENTS? Only everything. Donations are banned except to nonprofits who meet certain criteria. - (1) nonprofit; (2) create economic benefit; and (3) to state revenues. ONLY limited to this year only and only from wholesalers. NOT producers. No home producers - no home brewers, home vintners, or producers in planning. No producer participation outside of education. No producer equipment. Limited delivery from wholesalers.

PRODUCER PARTICIPATION IN YOUR EVENT BRISTOW BEVERAGE LAW, LLC PRODUCER PARTICIPATION IN YOUR EVENT Don’t ask for donations or equipment. Producers cannot provide them. All requests will need to be made to wholesalers going forward. Producers can be present at the event to speak about the product only. Events will have to be volunteer-driven, which could cause issues. If you’re having an event and have a license, don’t ask a producer for money.

BRISTOW BEVERAGE LAW, LLC WHY HAS THIS HAPPENED? SCANPO

BRISTOW BEVERAGE LAW, LLC WHY THE CRACKDOWN? In South Carolina, the number of alcohol producers and special events involving alcohol is at an all-time high. Mr. Taxman - eliminating donations could mean that certain tax revenues that were not being collected now are. Tax rates: $0.77 per gallon on beer (7th), $5.42 per gallon on spirits (27th), and $1.08 per gallon on wine (17th) are some of the highest in the country. Education. DOR wants industry members to get smart.

WHAT CAN BE DONE ABOUT THIS? BRISTOW BEVERAGE LAW, LLC WHAT CAN BE DONE ABOUT THIS? SCANPO

WHAT CAN BE DONE ABOUT THIS? BRISTOW BEVERAGE LAW, LLC WHAT CAN BE DONE ABOUT THIS? There will be legislation pre-filed this year for the next session beginning in January. This bill already has wide support among the hospitality industry and alcohol industry members. The bill will be bi-partisan, so it is important that you contact your legislators soon. Don’t know your legislators? Find them here: http://www.scstatehouse.gov/legislatorssearch.php

BRISTOW BEVERAGE LAW, LLC q&a. SCANPO

(843) 410-8712 HTTP://WWW.BRISTOWBEVERAGELAW.COM @BRISTOWBEVLAW CONTACT US (843) 410-8712 @BRISTOWBEVLAW HTTP://WWW.BRISTOWBEVERAGELAW.COM