Liquor Licenses: Headaches, and Opportunities

In this week's WineInStyle case, Robert Eberhart's California wine import company in Tokyo made its first sales using a Tokyo-based Irish bar's liquor license. Much of the case hinged on Eberhart's ability to conduct legal sales in Japan with appropriate legal support. It's a reminder for those of us who are interested in entering the alcoholic beverage business: licenses are headaches, but since they are headaches for everyone, they are also opportunities for those who can navigate the process of obtaining them.

Liquor licenses can be very expensive. For beer or wine, it might be as low as 3-5,000 dollars (in California), but for a full liquor license, it can be up to 400,00! The price of a license also depends on whether you want to sell alcohol on or off premises, the county you're applying to run your business in and what the market rates for the licenses are.

I hadn't realized it until I started looking into acquiring a license that you don't just apply for them from the government (for CA, the California Department of Alcoholic Beverage Control). For some areas, you have to buy an existing license from someone who doesn't need it anymore because the number of permits are limited. Those can be sold at auction, but it's recommended that you find a licensed, bonded, and insured agent to find one.

The application process for a new license is grueling: waiting, background checking, and the 60-day notice where anyone can protest your license and delay or prevent its being awarded. This is what Courtney was talking about where the government put a sign on her house about the permit because she was shipping wine from there. One way to avoid that last part is to acquire a property that is already licensed and then transfer ownership of that license. You will still be background checked and charged, but at least the license will be in place and it might cost less.

Reading about licensing reinforces the fact that being compliant and creative with regulations is part of running a successful business in the alcohol industry.

https://www.calabc.com/what-is-the-cost-of-a-liquor-license-in-california/
https://smallbusiness.chron.com/lease-liquor-license-25754.html