Enacted unanimously by the Maryland Senate and House of Delegates and approved by the Governor, a new state law establishes a nonrefillable container permit for draft beer that will create a new revenue stream for restaurants, bars and others across Maryland.
The permit authorizes the sale of draft beer for off-premises consumption by packaging the beer in a nonrefillable container that meets specific standards. The permit may be issued by a local board of license commissioners in 19 counties, Baltimore City, and the City of Annapolis; these are the same jurisdictions that may currently authorize the sale of draft beer in larger refillable containers.
The new law takes effect July 1, 2017.
The law will have a meaningful positive impact for a small business that will realize increased sales through this new category. For example restaurants that have an alcoholic beverage license authorizing on premises sales only will now, after obtaining the permit authorized by the law, be able to sell draft beer for off premises consumption. This will especially be an advantage for the exploding craft beer industry.
There is a great deal of excitement for this “Growlette” or smaller nonrefillable version than the existing authorized refillable Growler.
House Bill 292, cross filed with Senate Bill 491, establishes specific requirements for the nonrefillable container permit for draft beer. The term and hours of sale for a nonrefillable container permit are the same as those of the underlying license. An applicant who holds an underlying license without an off-sale privilege must meet the same advertising, posting of notice, and public hearing requirements as those for the underlying license.
To be used as a nonrefillable container for draft beer, a container must:
be made out of aluminum;
have a capacity of 32 ounces;
be branded with the identifying marks of the seller of the container; and
bear the federal health warning statement required for refillable containers.
Positively, applicants in specified jurisdictions may not be charged a fee for the nonrefillable container permit if they already have a refillable container permit.
The current law although little used, dating to 2014, already standardized the requirements for alcoholic beverage refillable containers used in the sale of draft beer or wine for off premises consumption. The holder of a refillable container permit may sell, fill, or refill any container that meets certain standards.
The 2014 law already authorizes a refillable container that: for beer, have a capacity of not less than 32 ounces and not more than 128 ounces; for wine, have a capacity of not less than 17 ounces and not more than 34 ounces; be sealable; be branded with an identifying mark of the seller of the container; bear the federal health warning statement; display instructions for cleaning the container; and bear a label stating that cleaning the container is the responsibility of the consumer, and that the contents of the container are perishable and should be refrigerated immediately and consumed within 48 hours after purchase
Many businesses have advised that there is great interest in nonrefillable containers for draft beer, especially in the expanding craft beer industry.
There will be costs of the supplies, storage needs, and possible recycling issues involved with nonrefillable containers, but because the establishments already sell draft beer, this is a win win.
We assist the alcoholic beverage industry in positively leveraging constraints and finding advantages in matters involving the sale of licensed beverages, often including new approaches and possibilities in this emergent area. If we can assist you with sound business advice and legal counsel in matters of the sale if draft beer or otherwise in the broader licensed beverage industry do not hesitate to give Nancy Hudes or Stuart Kaplow a call.