The Division’s Regulatory Affairs Bureau recently completed its inaugural year of the reestablished alcohol compliance program. The state-wide program is designed to achieve licensee and permittee compliance with Iowa’s liquor laws through education and voluntary compliance. Noncompliance can become costly when administrative actions (civil penalties, suspensions and revocations) become necessary to enforce compliance.
A review of investigations shows that a number of retailers are purchasing alcoholic beverages from businesses not licensed for wholesale. For example, a licensee who runs out of beer during the evening hours and replenishes inventory by buying it from a convenience store is in violation of Iowa law by not purchasing beer through a wholesaler.
Where a retailer must legally purchase alcohol depends on what type of alcoholic beverage is being purchased and if it is for on- or off-premises consumption. Here is a breakdown:
On-premises retailer (bars, restaurants, etc.)
- Alcoholic Liquor: An on-premises licensee must purchase alcoholic liquor from a class “E” liquor control licensee who holds a federal wholesaler’s permit.
- Wine: An on-premises licensee must purchase wine from a wine wholesaler (a class “A” wine permittee). The only exception allows for less than one case, per brand, per 24-hour period to be purchased from a class “E” liquor control licensee who also holds a class “B” wine or native wine permit.
- Beer: An on-premises licensee can only purchase beer from a beer wholesaler (a class “A” beer permittee). Note: On most occasions, beer wholesalers are not available after hours and deliveries are only made during normal business hours, so plan accordingly.
Off-premises retailer (liquor stores, grocery stores, etc.)
- Alcoholic Liquor: An off-premises licensee must purchase alcoholic liquor from the Iowa Alcoholic Beverages Division.
- Wine: An off-premises licensee must purchase wine from a wine wholesaler (a class “A” wine permittee).
- Beer: An off-premises licensee must purchase beer from a beer wholesaler (a class “A” beer permittee). Note: On most occasions, beer wholesalers are not available after hours and deliveries are only made during normal business hours, so plan accordingly.
It is only legal for retailers to purchase solely those alcoholic beverages their license or permit allows them to sell. However, it is illegal for alcoholic liquor, wine or beer to be transferred from one retail premises to another retail premises, even if all of the licensed premises are owned or under control of the same person, partnership, corporation or association.
Don’t let an inventory dilemma cause you to become a noncompliant statistic!
On-Premises License Classifications:
- Class “A” ,“B”, “C”, or special class “C” liquor licenses
- Class “B” beer permit
- Class “C” native wine permit
Off-Premises License Classifications:
- Class “E” liquor license
- Class “C” beer permit
- Class “B” wine or native wine permit
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