WINERY LEGAL COMPLIANCE
All start-up wineries will require basic licenses from TTB, State and local agencies. The TTB requires a Federal Basic Permit accompanied by either a Bonded Winery, Bonded Wine Cellar or a Beer and Wine Wholesaler’s Permit. a liquor license to sell alcoholic beverages and general business license from your city or county.
Start-Up Compliance
- Federal licensing- TTB licenses exist for bonded wine production, bonded storage and bottling, to blend or bottle taxpaid wine, wholesaling or importation of wine products. Choosing the wrong license may have profound consequences for excise taxes. Your insurance company will need to provide surety bonds.
- State licensing-types differ by State. California ABC license types are listed at https://www.abc.ca.gov/licensing/license-types/. Wineries in other States can begin by contacting State liquor authorities or consulting with local wineries who may share advice. Depending on your location, there’s a good chance we can tap into our broad base of client wineries throughout the U.S..
- Many other licenses may be required in your locale. Business licenses, building permits, tasting room operation, food serving permits and restrictions, and many others will need to be addressed. You may need a local attorney, but begin if you can by talking to a local winery that’s already been through it or your local winegrower’s association.
- Ongoing permits may include music licensing, event venue permits, sales tax payments, Federal and State monthly reporting (we advise you to do it every month even if only required yearly) and grape contract negotiations.
- Sales to distributors in other States within the three-tier system require licenses which vary State to State in cost and compliance reporting requirements.
- Direct-To-Consumer licenses are completely separate form three-tier licenses. Costs and reporting requirements vary but all States require sales tax reporting and payment, usually monthly even if no sales have occurred.
- These requirements intentionally place a considerable financial and administrative burden on small wineries and favor bid wineries. Fortunately, for both types of licensees, there are less expensive work-arounds we can acquaint you with as they emerge, reducing reporting requirements and payments to highly affordable packages.
Ongoing Compliance
Direct-to-Consumer Shipping (DTC)
There are currently 45 states permitting direct-to-consumer shipping.
Sales outside of your home state will be beneficial to your business; however, keep in mind that each state has separate rules and regulations for inbound and outbound traffic, tax records, license applications and fees. Here is what is needed to sell wine on-line
- A winery license from your state
- Retailer’s license from your state
- Shipper’s license for each state on which you plan on shipping to
- Alcohol Dealer Registration- with TTB
- Direct shipping agreements with all your carriers
First you will need to determine the different types of permits and licensing your premises will need. Your business plan may have these laid out already in your plan if you are going to operate any of the following: tasting room, event center, on-site and off-site retail, a restaurant? If you are uncertain, do not fret, I am here to assist with determining the types of permits and licensing you will need to complete and submit to the correct authorities.
Permits and Licensing: Where do I Start?
A Business License
This is first and foremost. You will need to apply for a business license in the city you are choosing to open your business in. Here is a link for applying for a business license in California http://www.calgold.ca.gov/.Fort those of you are starting a business outside of California, please check with your local district to learn how to apply for a business license in your area.
State licensing differs across the US as each state has the authority to regulate the production, sale, and distribution of alcohol. Check with your local ABC for licensing types, regulations, and local requirements. Here is a link to those sites https://www.ttb.gov/wine/alcohol-beverage-control-boards#US
In California, ABC offers 88 types of licenses ranging from a Winegrowers license (02) to a single day wine sale event permit (81). Wineries will need to apply for Off Sale Beer and Wine (20), Beer and Wine Wholesaler (17) and an On- Site license (ABC offers many on-sale licenses to suit your needs) if not producing wine for personal consumption.
Depending on your wineries business plan you may hold one license or many licenses for your premises. Here is the ABC website for all different licenses with definitions. https://www.abc.ca.gov/licensing/license-types/
Enjoy completing all the required documents!
State Licensing
Federal Licensing
The U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB, formerly BATF) is responsible for enforcing laws regulating alcohol production, wholesale business, importation, labeling and advertising.
The TTB site will become either your friend or foe as the required documents needed to apply for permits is like looking for a needle in a haystack. TTB has an additional 18 permits to choose from pertaining to alcohol production and sales. If you are planning on operating a bonded winery, you will need to apply with TTB in addition to applying for a permit with ABC. Again, each state’s requirements will be different. TTB does provide an online tutorial on filling out applications.
TTB is also responsible for accepting or denying COLA (Certificate/Exemption of Label/Bottle Approval) applications.
To Ship Outside of State or Not to Ship, that is the Question
Direct-to-Consumer Shipping (DTC)
There are currently 45 states permitting direct-to-consumer shipping.
Sales outside of your home state will be beneficial to your business; however, keep in mind that each state has separate rules and regulations for inbound and outbound traffic, tax records, license applications and fees. Here is what is needed to sell wine on-line
- A winery license from your state
- Retailer’s license from your state
- Shipper’s license for each state on which you plan on shipping to
- Alcohol Dealer Registration- with TTB
- Direct shipping agreements with all your carriers
Shipping
Shipping Companies
Shipping fulfillment agencies carry some licenses to ship out of state. Check with your local wine storage agencies if they offer this service.
USPS does not allow shipments of any alcoholic beverages
UPS permits the shipment of alcohol; however, there are specific requirements.
Fed-EX permits the shipment of alcohol; however, there are specific requirements.
DHL permits the shipment of alcohol; however, there are specific requirements
International Shipping
UPS, Fed-Ex, and DHL ship internationally to some countries, check their websites for more information.
Check with your local storage/ shipping fulfillment agency as well. The great service here is the shipping agency complete all customs forms!
If your company does not have an on-staff compliance person, there are compliance companies to assist with completing and filing applications. Another option is to sign up with a third party whom holds many states shipping compliance licenses such as Vinoshipper.
Wholesalers
If choosing to market your product in restaurants or retail stores, please look in to your state and the state you are selling to for rules and regulations.
Distributors
Distributors are an agent who supplies goods to stores and other businesses that sell to consumers.
Distribution companies are valuable for states regulating the sale of alcohol directly from the winery to retailers and restaurants. Distributors purchases cases of wine from the winery and takes ownership of the wines to sell to retailers and restaurants whom in turn sells the product to consumers.
Online Sales
Create a Website-
Stick with your own style when creating a site also ensure the site is pleasant on your viewers eyes and attention span.
Let me know if you’d like a $100 Mini-Consult to adapt this information to your situation.
