Laws surrounding the buying and selling of alcohol in this country have a long, tumultuous, and even violent history. A colony built by cider, ale, and whiskey, the U.S. has run the gamut of dry legality, wet rebellion, and ultimately concession to alcohol as one critical aspect of the good life. We’ve come a long way from prohibition-era restrictions and bootlegging, and the existence of happy hour is a hard-won, hard-fought-for modern day luxury.
When the federal ban on booze was lifted in 1933, new legislation empowered individual states to regulate the distribution, sale, and consumption of alcohol on their own terms. This includes how and when licensing is awarded, and specific stipulations associated with its sales.
The distinction between a beer & wine license and a liquor license is not a new concept, but can be tricky to navigate as a new (or veteran) owner of a bar or restaurant, especially given the unique laws specified from state to state. Here’s what you need to know.
Why do I need a license to serve alcohol?
Because alcohol is an intoxicating – and often addictive – substance, those who serve or sell it to members of the public need to have a less-than-basic understanding of the implications of its consumption, as well as how to do so safely, and how they as an establishment owner can intervene in the case of its abuse. They should also know how to safely store their inventory and maintain a sanitary environment per the requirements of the health department.
Because alcohol is also a regulated substance, restaurant, bar, and liquor store owners must demonstrate a solid understanding of the legality of alcohol, including who may consume it, where, and when. Being licensed is also ideally a guarantee that the holder of said license will comply with all associated laws.
Do I really need a full liquor license?
There are generally 2 different licenses you can apply for if your goal is to serve alcohol in your bar or restaurant. A beer & wine license allows you to serve beer, wine, malt beverages, cider, mead, and other non-distilled alcoholic drinks. A liquor license allows businesses to sell higher-proof distilled alcohol such as whiskey and vodka. Full liquor licenses often include the sales of beer & wine, etc. in their stipulations.
So, you do not need a full liquor license if you have no intention to serve distilled spirits. Restaurants and bars serving beer & wine only will be well within legal operations with just a beer & wine license. This will of course mean applying for a liquor license in the future if you ever decide to offer something with a little more kick. If you know from the get-go that you want to stock a full bar, it is a good idea to go ahead and apply for a liquor license as these take longer and are often more difficult to get than their lower-proof cousins.
What is the difference between a beer license vs liquor license
Beer & wine licenses and liquor licenses have different application processes, wait times, and fees associated with either, depending on the state in which you are applying. Some states, such as Oregon, do not distinguish between a liquor license and a beer & wine license. Other states break up their liquor licenses into multiple categories, each with its own unique requirements – Arizona has 21 distinct liquor licenses, for example.
In general, beer & wine licenses are much easier to obtain, have a shorter waiting period, and are significantly less expensive. There also is not a limit to the number of beer & wine licenses given out in a year in most states.
Liquor licenses generally require more frequent renewal, are more expensive to maintain and apply for, and many states restrict the number of liquor licenses awarded in a year. Florida, for example, uses a lottery system to award liquor licenses to hopeful applicants.
The application materials and processes required are also dependent on the state in question, but liquor licenses usually necessitate a more intensive process, such as an in-person interview in the state of Michigan.
How much do liquor licenses vs. beer licenses cost?
There are two major expenses applicants can expect to encounter when applying for their liquor license. This includes the main cost of the license, the initial application fee, and the renewal fees. Of course these numbers vary by state: some define a flat-rate annual cost with no additional charges, while others fine a high initial cost with lower annual renewal charges.
Across the U.S., cost of maintaining a full-service liquor license ranges from $400 annually to upwards of $14,000. And the cost of your license also depends on the specifics of the license being maintained. For example, in California liquor licensing fees range from $100 - $15,400 depending on how late you serve alcohol, whether you allow patrons to bring their own, and whether you’re brewing your own beer onsite.
Fees for maintaining a beer & wine license can be similar, however generally need to be renewed less frequently and thus may be ⅓ to ½ the cost of a liquor license.
It is also important to keep in mind that many states ask that your servers and bartenders maintain an independent alcohol seller’s license in addition to the establishment’s license. In Oregon, these cost $28.65 per employee.
How many licenses are given out each year?
Once again, it depends entirely on the state. Some states do not limit the number of licenses available annually, while others place heavy strictures on that number. Your state’s alcoholic beverage control department will generally list the number of liquor licenses available, so consider doing a little sleuthing if you’re preparing to submit your application.
Provi can help
Once you’ve acquired all the right paperwork, Provi will help you stock your new restaurant, liquor store, or bar with the click of a button. Provi is a comprehensive alcohol inventory platform that allows you to maintain all of your suppliers in a single platform. Say good-bye to spreadsheets and hello to Provi’s easy inventory management and ordering system which comes complete with order tracking and a notification system that tells you when to bring in new material.
See how Provi helps thousands of bars, restaurants and retailers save 200 hours a year with a single app for browsing product catalogs, ordering, and messaging your reps.
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Whether you’re a bar, retailer, distributor, or brand— growing your company is hard work. Success in the alcohol industry requires a lot of time, great relationships, and staying informed. Get access to all three and prosper using Provi.