Most of us are familiar with the micro-beer movement which is characterized by small, independent and traditional breweries that produce craft beers in limited quantities. The products of such breweries are often tailored to specific tastes and regions. Similarly, the limited winery or boutique winery concept focuses on small batches of a “craft” product made primarily for local consumption, which caters to specific regions and tastes. These wineries usually do not have their own vineyards, and instead obtain their grapes or fruit stock from outside suppliers. Finally, there are now micro-distillers. Each of these industries is licensed by the Pennsylvania Liquor Control Board (the “LCB”). Like microbreweries and limited wineries, micro-distilleries are permitted to produce a limited quantity of craft spirits for consumption. They too are intended to appeal to regional and specific tastes.
The LCB grants microbreweries brewery licenses that are specific to brewing malt beverages. Brewery licensees are permitted to sell beverages that are produced by the brewery for consumption at licensed hotels, restaurants, and clubs. Microbreweries may be entitled to operate a restaurant or brewery pub on its premises under conditions set by the LCB. A brewery license holder may sell wines produced by a Pennsylvania limited winery for consumption on its licensed premises. A brewery licensee may also hold a hotel, restaurant or club license which allows the licensee to sell liquor, wine and malt or brewed beverages regardless of where it is made, under the same conditions as any other licensed hotels, restaurants or clubs.
The LCB grants limited winery licenses for the production of alcoholic ciders, wines and wine coolers. Limited wineries must use agricultural products grown in Pennsylvania for their wine, cider and coolers, and are permitted to sell products produced by the licensee or purchased in bulk from other Pennsylvania limited wineries. A limited winery may not produce more than 200,000 gallons of product a year. Under certain conditions, a limited winery licensee may also hold a hotel, restaurant or club license that permits the licensee to sell alcohol on the same premises regardless of where it is made. The LCB permits a limited winery to sell its products in up to five approved locations besides its licensed premises.
Similarly, the LCB can issue limited distillery licenses that allow for production of up to 100,000 gallons of distilled liquor or spirits per year. A limited distiller may manufacture and sell bottled liquors produced on its premises to other properly licensed entities such as restaurants, hotels and clubs as well as to the LCB for retail sales in its State Stores. Alcohol distilled by micro-distillers may be offered for sale on its premises provided it is not offered at a price which is lower than that charged by the State Store. Like a brewery or a limited winery, a limited distillery licensee may hold a hotel, restaurant or club liquor license which allows for service of food; consumption of the spirits distilled on premises and the sale of liquor, wine and brewed beverages regardless of where they are produced. The micro-distillery pub concept is still a new idea in Pennsylvania, but many expect it to become a hot trend in the restaurant industry in the near future.
If you have any questions about licensing for the limited production of alcohol our office can assist with the nuance of the LCB as well as administration of federal and local regulations associated with such ventures.