ILCC Introduces Forms For Brewers, Brewpubs, Distilling Pubs and Distillers to Obtain Approval Before Transferring Between Wholly Owned Operations.
For the past few iterations of amendments and creations for the Class 1, brewers licenses, the Class 2 brewers and distillers licenses and the Class 3 (no form yet) and Brewpub and Distilling Pub licenses, different amendments have inserted language regarding the ability of such licensees making transfers between other wholly owned licensees of similar class.
The language from the Illinois Liquor Control Act, for the most part, always required prior approval from the Illinois Liquor Control Commission prior to making a transfer of beer or spirits in this fashion, but the ILCC never really had a mechanism for receiving and approving these transfers. Until now…
Recently, the ILCC introduced forms for breweries, brewpubs and distilleries and distilling pubs to utilize in obtaining approval for, and making, these transfers.
Here is the relevant language from the Illinois Liquor Control Act and the forms that you can now use:
For Illinois Class 1 Brewers:
If the State Commission provides prior approval, a class 1 brewer may annually transfer up to 930,000 gallons of beer manufactured by that class 1 brewer to the premises of a licensed class 1 brewer wholly owned and operated by the same licensee.
The form is the MAN-XFER-104: Class 1 Brewer/Class 2 Brewer Class1/Class 2 Brewer; Class 2 Craft Distiller to Class 2 Craft Distiller
This form applies to transfers from a licensed Class 1 Brewer to a wholly owned Class 1 Brewer; from a licensed Class 2 Brewer to a wholly owned Class 2 Brewer; and from a licensed Class 2 Craft Distiller to a wholly owned Class 2 Craft Distiller. These transfers apply only to beer or spirits manufactured by the Class 1/Class 2 Brewer or Class 2 Craft Distiller respectively. It does not apply to transfer of products not manufactured by the licensees. Transfers under this form are authorized only if both license holders are identically owned by the same people in the same ownership percentages. Transfer limits are identified in the form. Class 1 Brewers, Class 2 Brewers, and Class 2 Craft Distillers shall not conduct a transfer under the conditions of this form without prior approval from the Commission.
For Illinois Class 2 Brewers:
If the State Commission provides prior approval, a class 2 brewer licensee may annually transfer up to 3,720,000 gallons of beer manufactured by that class 2 brewer licensee to the premises of a licensed class 2 brewer wholly owned and operated by the same licensee.
A class 2 brewer may transfer beer to a brew pub wholly owned and operated by the class 2 brewer subject to the following limitations and restrictions: (i) the transfer shall not annually exceed more than 31,000 gallons; (ii) the annual amount transferred shall reduce the brew pub’s annual permitted production limit; (iii) all beer transferred shall be subject to Article VIII of this Act; (iv) a written record shall be maintained by the brewer and brew pub specifying the amount, date of delivery, and receipt of the product by the brew pub; and (v) the brew pub shall be located no farther than 80 miles from the class 2 brewer’s licensed location.
A class 2 brewer shall, prior to transferring beer to a brew pub wholly owned by the class 2 brewer, furnish a written notice to the State Commission of intent to transfer beer setting forth the name and address of the brew pub and shall annually submit to the State Commission a verified report identifying the total gallons of beer transferred to the brew pub wholly owned by the class 2 brewer.
The form for Class 2 Brewer to Class 2 Brewer is the MAN-XFER-104. This form applies to transfers from a licensed Class 2 Brewer to a wholly owned Class 2 Brewer. Transfer limits are identified in the form. Class 2 Brewers shall not conduct a transfer under the conditions of this form without prior approval from the Commission.
The form for Class 2 brewer to Brewpub is the CL2-XFER-105.
This form applies to transfers from a licensed Class 2 Brewer to a wholly owned Brew Pub. These transfers apply only to beer manufactured by the Class 2 Brewer. It does not apply to transfer of products not manufactured by the licensees. Transfers under this form are authorized only if both license holders are identically owned by the same people in the same ownership percentages and if the two licensed locations are not more than 80 miles from each other. Transfer limits are identified in the form and if a Brew Pub receives such a transfer, the annual production limits for the Brew Pub are reduced by the amount of beer received. Class 2 Brewers shall not conduct a transfer under the conditions of this form without prior approval from the Commission.
For Illinois Class 3 Brewers:
If the State Commission provides prior approval, a class 3 brewer may annually transfer up to 155,000 gallons of beer manufactured by that class 3 brewer to the premises of a licensed class 3 brewer wholly owned and operated by the same licensee.
While this right exists under the statutory language for the Class 3 Brewers, it does not appear that a form for the Class 3 Brewers has been created yet.
For Illinois Brewpubs:
A brew pub license shall allow the licensee to only… (vi) with the prior approval of the Commission, annually transfer no more than 155,000 gallons of beer manufactured on the premises to a licensed brew pub wholly owned and operated by the same licensee, and (vii) notwithstanding item (i) of this subsection, brew pubs wholly owned and operated by the same licensee may combine each location’s production limit of 155,000 gallons of beer per year and allocate the aggregate total between the wholly owned, operated, and licensed locations.
The form Brewpub to Brewpub transfer is the PUB-XFER-103.
This form applies to transfers from a licensed Brew Pub to a wholly owned Brew Pub. These transfers apply only to beer manufactured by the Brew Pub. It does not apply to the transfer of products not manufactured by the Brew Pub. Transfers under this form are authorized only if both license holders are identically owned by the same people in the same ownership percentages. Transfer limits are identified in the form. A Brew Pub shall not conduct a transfer under the conditions of this form without prior approval from the Commission.
For Illinois Class 2 Distillers:
A class 2 craft distiller licensee may make sales and deliveries to importing distributors and distributors, but shall not make sales or deliveries to any other licensee. If the State Commission provides prior approval, a class 2 craft distiller licensee may annually transfer up to 100,000 gallons of spirits manufactured by that class 2 craft distiller licensee to the premises of a licensed class 2 craft distiller wholly owned and operated by the same licensee. A class 2 craft distiller may transfer spirits to a distilling pub wholly owned and operated by the class 2 craft distiller subject to the following limitations and restrictions: (i) the transfer shall not annually exceed more than 5,000 gallons; (ii) the annual amount transferred shall reduce the distilling pub’s annual permitted production limit; (iii) all spirits transferred shall be subject to Article VIII of this Act; (iv) a written record shall be maintained by the distiller and distilling pub specifying the amount, date of delivery, and receipt of the product by the distilling pub; and (v) the distilling pub shall be located no farther than 80 miles from the class 2 craft distiller’s licensed location.
A class 2 craft distiller shall, prior to transferring spirits to a distilling pub wholly owned by the class 2 craft distiller, furnish a written notice to the State Commission of intent to transfer spirits setting forth the name and address of the distilling pub and shall annually submit to the State Commission a verified report identifying the total gallons of spirits transferred to the distilling pub wholly owned by the class 2 craft distiller.
The form for Class 2 Distiller to Class 2 Distiller transfers is the MAN-XFER-104:
This form applies to transfers from a licensed Class 2 Craft Distiller to a wholly owned Class 2 Craft Distiller. These transfers apply only to spirits manufactured by the Class 2 Craft Distiller. It does not apply to transfer of products not manufactured by the licensees. Transfers under this form are authorized only if both license holders are identically owned by the same people in the same ownership percentages. Transfer limits are identified in the form. Class 2 Craft Distillers shall not conduct a transfer under the conditions of this form without prior approval from the Commission.
The form for Class 2 Distiller to Distilling Pub is the CL2-XFER-105.
This form applies to transfers from a licensed Class 2 Craft Distiller to a wholly owned Distilling Pub.
These transfers apply only to spirits manufactured by the Class 2 Craft Distiller. It does not apply to transfer of products not manufactured by the licensees. Transfers under this form are authorized only if both license holders are identically owned by the same people in the same ownership percentages and if the two licensed locations are not more than 80 miles from each other. Transfer limits are identified in the form and if a Distilling Pub receives such a transfer, the annual production limits for the Distilling Pub are reduced by the amount of spirits received. Class 2 Craft Distillers shall not conduct a transfer under the conditions of this form without prior approval from the Commission.
For Illinois Distilling Pubs:
A distilling pub license shall allow the licensee to only … (vi) with the prior approval of the State Commission, annually transfer no more than 5,000 gallons of spirits manufactured on the premises to a licensed distilling pub wholly owned and operated by the same licensee.
The form Distilling Pub to Distilling Pub transfer is the PUB-XFER-103.
This form applies to transfers from a licensed Distilling Pub to a wholly owned Distilling Pub. These transfers apply only to spirits manufactured by the Distilling Pub. It does not apply to the transfer of products not manufactured by the Distilling Pub. Transfers under this form are authorized only if both license holders are identically owned by the same people in the same ownership percentages. Transfer limits are identified in the form. A Distilling Pub shall not conduct a transfer under the conditions of this form without prior approval from the Commission.
Don’t worry, if you can’t get approval ahead of time, you may have other options:
- If this is for retail sales, the self-distribution privilege still allows a sale between your premises with retail locations, so you could always sell from your Class 1 licensee to yourself and mark it as such.
- The odd nature of Illinois contract brewing – making beer for another brewery licensee and selling it to them – would appear to allow for making and sale to another brewery licensee, so you could sell it to yourself the same way you can sell it to any other licensee. The lack of clear guidance on Illinois contract brewing practices has been a great benefit to Illinois breweries – especially where equal protection arguments can be advanced in opposition to inconsistent enforcement practices.
