On Wednesday, September 28, 2010 the Michigan Legislature passed House Bill No. 6007, which includes a number of amendments to the Michigan Liquor Control Code.  This Bill will now be sent to Governor Jennifer Granholm, who has fourteen (14) days to sign the Bill into law or veto the Bill.  The purpose of this Michigan Hospitality Law Update is to provide you with a snapshot of what the Bill covers, and to start a dialogue as to how these potential changes in the law may affect your hospitality business.

Here is an outline of what the Bill covers:

Sunday Morning Alcohol Sales:  The Bill allows the sale of beer, wine and spirits at both on-premise and off-premise establishments between the hours of 7:00 AM and Noon on Sundays.  A licensee must obtain a Sunday Morning Sales Permit in order to sell alcohol on Sunday mornings, which will have an annual permit fee of $160.00.  Should this Bill be enacted we will distribute application instructions for this Permit as soon as they are available.

Catering Permit:  The Bill allows a Food Service Establishment (as defined in the Michigan Food Law of 2000) that holds a public on-premise license, to obtain a Catering Permit.  The Catering Permit allows a licensee to sell and deliver spirits in original sealed containers to a person for off-premise consumption at a private event.  The spirits are sold to the person hosting the private event, and may not be sold to guests by the glass.  The Catering Permit holder must provide the service of the spirits to the guests of the private event.  A Catering Permit may be used at multiple locations and events during the same time period, and the annual fee for the Catering Permit will be $300.00.  A Food Service Establishment that holds a private Club License may not hold a Catering Permit.

Beer & Wine Tastings at SDM or SDD Licensed Establishments:  The Bill creates an Annual Beer and Wine Tasting Permit, which allow the holders of SDD & SDM licensees, Outstate Sellers of Beer, Outstate Sellers of Wine, Wine Makers, Microbrewers, or Brewers to hold beer and/or wine tasting events at SDM or SDD licensed establishments.

Authorization of Wine Tastings at Wine Manufacturing Establishments: The Bill authorizes a wine maker to conduct wine tastings on its licensed premises.

Brandy & Spirits Tastings:  The Bill authorizes Brandy Manufacturers and Small Distillers to conduct tastings of brandy and spirits at their licensed premises.

 Creation of Consumer Sampling Event License:  The Bill authorizes a Vendor of Spirits or Manufacturer to conduct a consumer sampling event on the licensed premises of an SDD licensed establishment.

Creation of a new type of Wholesaler called a "Master Distributor":  The Bill creates a new type of Wholesaler that will sell beer and wine exclusively to other Wholesalers.  A Master Distributor will be prohibited from selling beer and wine to Retailers.

Prohibition of "Wine Dualling":  The Bill prohibits a Manufacturer, Outstate Seller of Wine, or Master Distributor from granting more than 1 wine Wholesaler a specified brand or brands of wine for distribution in a particular sales territory.  Similar to beer Distributors, each wine Distributor will now have an exclusive territory for the brands of wine it distributes. This change in the law however will not prohibit the continuation, renewal, transfer or assignment of existing wine distribution agreements with Manufacturers of Wine, Outstate Sellers of Wine, or Master Distributors, that were in effect on June 1, 2010.

Addition of More Community College Class C Liquor Licenses: The Bill authorizes the issuance of new Class C liquor license to five (5) specific community colleges in Michigan.

Creation of Continuing Care Retirement Center Liquor Licenses: The Bill authorizes the issuance of twenty (20) new nontransferable Class C liquor licenses for residential communities that are registered as "Facilities" under the Living Care Disclosure Act, and provide full time residential housing for individuals over the age of 62.

Codification of The 3 Tier System:  The Bill codifies the 3 Tier System of alcohol distribution that exists in all Control States of: (i) manufacturers (a/k/a suppliers), (ii) wholesalers (a/k/a distributors), and (iii) retailers (eg. bars, restaurants, retail stores).  The 3 Tier System prohibits any person or entity from having a direct or indirect interest in more than one tier of the distribution system. 

Look for future Michigan Hospitality Law Updates regarding the enactment or veto of this Bill, more specific rules pertaining to the new activities authorized by this Bill, and other changes in the policies and procedures of the Michigan Liquor Control Commission.  Should you have any questions regarding this Bill please do not hesitate to contact us. 

Carlin, Edwards, Brown & Howe, PLLC

John B. Carlin, Jr. (248) 816-3210

Scott D. Edwards (248) 816-3205

Michael J. Brown (517) 321-4616

J. Patrick Howe (248) 816-3175