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  The ILCC Legal Division

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TPP-20:
Brew Pubs

I. Purpose

This policy defines the procedures which must be followed in order for a retailer to manufacture and sell its own beer.

II. Policy

It is the policy of the Illinois Liquor Control Commission to allow retailers to brew their own beer on their retail premises for sale to the public.

III. Background

The alcoholic industry operates on a three tier system: manufacturers, distributors and retailers. In order to prevent the prohibited practice of a“tied house,” members of one tier are prohibited from owning any interest in another tier. Thus, the holder of a manufacturer’s license is not generally allowed to hold a retailer’s license.

However, in response to the growing development of micro-breweries, the Illinois Legislature, in 1993, amended the Statute to provide for a Brew Pub license. The Brew Pub license essentially carves out a narrow exception to the general rule that a manufacturer cannot also be a retailer.

IV. Definitions

A.235 ILCS 5/1-3.08. Manufacturer

“Manufacturer” means every brewer, fermenter, distiller, rectifier, wine maker, blender, processor, bottler or person who fills or refills an original package, whether for himself or for another, and others engaged in brewing, fermenting, distilling, rectifying or bottling alcoholic liquors.

B.235 ILCS 5/1-3.17. Retailer

“Retailer” means a person who sells, or offers for sale, alcoholic liquor for use or consumption and not for resale in any form.

C.235 ILCS 5/5-1(n) Brew Pub

A brew pub license shall allow the licensee to manufacturer beer only on the premises specified on the license, to make sales of the beer manufactured on the premises to importing distributors, distributors and to non-licensees for use and consumption, to store the beer upon the premises, and to sell and offer for sale at retail.

D.235 ILCS 5/1-3.13. Manufacture

“Manufacture” means to distill, rectify, ferment, brew, make, mix, concoct, process, blend, bottle or fill an original package with an alcoholic liquor, whether for oneself or for another, and includes blending but does not include the mixing or other preparation of drinks for serving by those persons authorized and permitted in this Act to serve drinks for consumption on the premises where sold. All containers or packages of blended alcoholic liquors shall have affixed thereto a label setting forth and stating clearly the names of all ingredients which the blended alcoholic liquors offered for sale shall
contain.

V. Procedures

A. Brewing on Premises for Sale at Retail. Pursuant to 235 ILCS 5/5-1(n), a brew pub license requires and permits the following:

  1. the licensee must manufacture the beer on the licensed premises;
  2. the licensee must store and sell the beer from the licensed premises;
  3. the licensee may sell the beer to distributors and importing distributors for resale;
  4. the licensee may sell and offer for sale the beer at retail for consumption only on the licensed premises, and
  5. the licensee may sell and offer for sale other alcoholic beverages at retail.

B. The ILCC views a Brew Pub as a retailer which manufactures its own beer. All retailer statutes and regulations apply. A Brew Pub licensee may not obtain a distributor’s license.

C. The Commission has received recent inquiries about activities which may be taking place upon the premises of “brew pubs.” Prior to the enactment of the “Brew Pub” statute [235 ILCS 5/1-3.33; 5/5-1(n)] entities seeking to conduct business under the umbrella of a “brew pub” were required to secure both a retailer and a brewer license. Local approval/licensing was also required of the “retailer” aspects of such a business. When the General Assembly enacted the amendments to the Illinois Liquor Control Act, referenced above, the “brew pub” was as defined as follows:

5/1-3.33. “Brew Pub’ means a person who manufactures beer only at a designated premises to make sales to importing distributors, distributors, and to non-licensees for use and consumption only, who stores beer at the designated premises, and who is allowed to sell at retail. (Source: P.A. 88-91)” The licensing description of a “brew pub” is as follows: “A brew pub license shall allow the licensee to manufacture beer only on the premises specified in the license, to make sales of the beer manufactured on the premises to importing distributors, distributors, and to non-licensees for use and consumption, to store the beer upon the premises, and to sell and offer for sale at retail.”

Some confusion may have arisen from a reading of the portion of the statute which dealt with the right of a manufacturer to secure one retailer license, which predated the foregoing “brew pub” legislation. Section 5/6-4(e) provided that the manufacturer which had received a retailer’s license was permitted to sell “beer only.”

The omission of a similar limitation on the brew pub license was intended to not restrict the brew pub licensee to such “sale of beer only” upon the licensed premises. It was the intent of the legislation, and it is the position of this Commission, that a brew pub licensee may sell wine and distilled spirits, in addition to, beer only for consumption upon its licensed premises. This therefore allows brew pub licensees to purchase for resale whatever alcoholic liquors all other retail liquor licensees can, subject only to the type of license the entity has secured from the local liquor control commissioner. Further, the question has been posed whether a brew pub can bottle its product for sale to retail consumers for “off-premises” consumption. Notwithstanding the nature of the local license issued the business, i.e., combination, on- and off-premises, the Illinois Liquor Control Act does allow sales for“off-premises” consumption. A brew pub which wants its product to be able to be sold for such “off-premises” consumption, would have to act as any other brewer and register a distributor, which will handle the product for retail purchase.

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