Brief Summary of Bill

Adds distillers, craft distillers, and manufacturer's licensees to the list of groups that may produce private labeled products.
Provides that beer, wine, or spirits private label items may be produced, distributed, or sold by any person to the same extent that person is otherwise properly licensed to produce, distribute, or sell beer, wine, or spirits generally.
Establishes that spirits, wine, and beer distributors must, to the extent practicable, make any product the distributor acquires for resale available to any person legally entitled to purchase the product.

Background: The Tied House Laws and Private Labels. Washington's tied house laws regulate the relationship between liquor manufacturers, distributors (industry members), and retailers. In general, tied house laws are meant to regulate how liquor is marketed and prevent the vertical integration of the three tiers of the liquor industry. The general rule is that no industry member may advance, and no retailer may receive, monies or monies' worth under an agreement or by means of any other business practice or arrangement.

There are numerous exceptions to the tied house laws. One exception allows wineries and breweries to partner with retailers to create private-label wine and beer for restaurants, private clubs, grocery stores, and beer and/or wine specialty shops. The producers may be identified on the private labels.

Craft Distilleries. Distillers producing 150,000 gallons or less of spirits with at least half of the raw materials used in the production grown in Washington are considered craft distilleries and pay a reduced license fee. Craft distilleries may sell spirits of their own production for consumption off the premises, provided that the craft distillery complies with applicable laws and rules relating to retailers. Craft distilleries may also contract distilled spirits for, and sell contract distilled spirits to, holders of distillers or manufacturers' licenses, or for export. Craft distilleries may additionally apply for an endorsement to sell spirits of the craft distillery's own production at retail for off-premises consumption at a qualifying farmers' market, subject to restrictions.

Spirits Retail Licensees. Spirits retail licensees are authorized to sell spirits at the retail level. The licensees generally fall into two categories: (1) grocery stores and other large retail establishments encompassing at least 10,000 feet of retail space; and (2) smaller liquor stores that are either former state-owned liquor stores or former contract liquor stores.

A spirits retail license authorizes the sale of spirits in original containers to:

consumers for consumption off the licensed premises and to permit holders;
retailers licensed to sell spirits for consumption on the premises; and
retailers who are licensed for resale at their licensed premises.

Summary of Bill: Distillers, craft distillers, and manufacturer's licensees may produce private labeled products to the same extent currently authorized for wineries, breweries, microbreweries, certificate of approval holders, and retail licensees.

Beer, wine, or spirits private label items may be produced, distributed, or sold by any person to the same extent that person is otherwise properly licensed to produce, distribute, or sell beer, wine, or spirits generally.

Spirits, wine, and beer distributors must, to the extent practicable, make any product the distributor acquires for resale available to any person legally entitled to purchase the product.