Tied-House Laws

[travellers]

Hello Everyone-

I'm doing research on business avenues, we have a great space already locked down. It features lake front property with heavy foot traffic. I'm trying to understand the tied-house laws. Is it possible? I have only found one distillery on the web that is setup that way. Our goal is to have the operations facility attached to a tasting room that is setup similar to a winery. Where people are able to come in, taste our spirits, and stay for drink if they like.

I have been reading the regulations, but I will be honest, I just don't can' really get a handle on them. Any advice would be helpful.

Thank you.

[Kristian]

That is a state regulated item, so which state are you in?

[travellers]

I'm in northern virginia.

[dhdunbar]

This is not a "tied house" issue in the traditional sense. Look instead for information on "three tier" rules and regulations. TTB will allow this activity, but you will have to construct according to its rules. The previous answer is correct; in the main it is a state issue. A simple search for "Virginia craft distiller retail sales" returns the following at http://www.abc.virginia.gov/newsletter/pdf/LicSpring2013.pdf, which is a Virginia ABC newsletter that includes an article on craft distilling in the state:

It took legislation to make this happen. The Code of Virginia is very specific regarding the distribution of liquors. Unlike wine and beer, which can be purchased from any farm winery or brewery holding

an ABC license, distilled spirits can be sold only at government (ABC) stores. Legislation enacted in 2006 (statute 4.1-119) permitted Copper Fox to open a government store. The provision authorized

state stores for licensees using at least 51 percent of agricultural products grown on the licensee’s farm or on Virginia land leased by the licensee to operate as a state store. In Copper Fox’s case the grain used in producing its whisky was developed by Virginia Tech and is grown on the state’s Northern Neck. Virginia ABC carries four of the distillery’s products.

Subsequent legislation added four other provisions for qualifying as a state store including:

(1) licensees which operate as nonprofit associations owning property significant in American history —Mt. Vernon;

(2) licensees operating a museum on the grounds of a historical building or site—A. Smith Bowman;

(3) licensees USDA-certified as organic distilleries — Catocin Creek; and (4) licensees employing traditional distilling techniques including the use of authentic copper pot stills . . . in any

county with a population of less than 20,000—Virginia Distilling Company.

Each provision is unique to a distillery and was introduced by a legislator on the distillery’s behalf. For these five distilleries, qualifying as a state store is an advantage because they’re able to sell their product directly to consumers on the premise. The price of the spirits is the same as it is in Virginia ABC’s 343 retail stores. The convenience is that the consumer is able to make the purchase while the product still has top-of-mind awareness.

It appears that the state may not allow sales for consumption on premises. Armed with this information, talk to your local ABC agent.

[travellers]

dhdunbar-

Thank you very much this information, I conducted a similar search however I must have missed the newsletter you mentioned.