August 15th, 2008
That’s right – when California License Type 17 (Beer and Wine Wholesaler) and License Type 20 (Beer and Wine Off-Sale Retailer) are issued in conjunction, the privileges associated with the combination license are not equivalent to those of the 02 Winegrower’s License. A Type 17 License “permits incidental sales to other supplier-type licensees” and a Type 20 License “authorizes the sale of beer and wine for consumption off the premises where sold.” The joint issuance of the two licenses is authorized by Section 23378.2 of the California Code and permits the issuance of a package off-sale beer and wine license to a licensed California wholesaler if only wine is sold from the retail premises. It is significant to note that when shipping out-of-state, a 17/20 licensee is considered a retailer resulting access to fifteen states.
A month ago at the ShipCompliant Users Conference, Matthew Botting of the California ABC revealed that many 17/20 permit holders were not fulfilling all requirements of the combination license and were instead operating more like 02 licensees because many were unaware that 17/20 permit holders must act as a bona fide wholesaler in order to comply with the provisions of the license. Please note that in order to operate as bona fide wholesaler, a 17/20 permit holder must sell to retailers, in general, at least every 45 days. Section 23779 provides, in pertinent part:
No wholesale license shall be issued to any person who does not in good faith actually carry on or intend to carry on a bona fide wholesale business by sale to retail licensees of the alcoholic beverage designated in the wholesale license, and the department may revoke any wholesale license when the licensee fails for a period of 45 days actively and in good faith to engage in the wholesale business…Sale by a wholesale licensee to himself as a retail licensee is not the transaction of a bona fide wholesale business.