DISTILLERY MANUAL OPERATING PROCEDURES FOR DISTILLERY STORES · Beverage Control pursuant to §4.1-206 (1)(2) of the Code of Virginia. E. Distillery License: License issued by the

Virginia Department of Alcoholic Beverage Control

DISTILLERY MANUAL &

OPERATING PROCEDURES FOR

DISTILLERY STORES

DISTILLERYMANUAL|VirginiaDepartmentofAlcoholicBeverageControl|www.abc.virginia.gov/licenses 2

ForewordTheVirginiaDepartmentofAlcoholicBeverageControliscommittedtoprovidingexcellentcustomerserviceforthecitizensoftheCommonwealth. Accomplishingthistaskrequiresthatwemodelbestpracticesandbeabletoadapttochangingdemands.

ThismanualisintendedtoserveasareferenceguideforVirginiaDistillerswhoarepresentlyconductingbusinesswithVirginiaABCaswellaseducatenewandprospectiveVirginiadistillersaboutVirginiaABC’spoliciesandprocedures.TheinformationlistedhereinissubjecttorevisionbyVirginiaABCasneeded.Inkeepingwithourdesiretoprovideexcellenceincustomerservicepleaseforwardanysuggestionsforanyadditionalinformationthatyouwouldliketoseeincludedinthismanualtodistillerygroup@abc.virginia.gov

VirginiaABC’sVision

ToenhancethequalityoflifeforVirginia’scitizensbybalancingservice,revenueandcontrolinthedistribution,saleandconsumptionofalcoholicbeverages.


TableofContentsHowtoOpenaDistillery.......................................................................................................................................................4

Licensing.................................................................................................................................................................................5

DistilleryStore........................................................................................................................................................................6

Fees........................................................................................................................................................................................7

Compliance............................................................................................................................................................................8

RecordKeeping......................................................................................................................................................................9

Inspections.............................................................................................................................................................................9

OperatingaDistilleryStore.................................................................................................................................................10

RequirementsandConditions..............................................................................................................................................11

Tastings................................................................................................................................................................................16

MarketingtoRestaurants....................................................................................................................................................17

SalestoMixedBeverageRetailLicensees............................................................................................................................17

RemoteSalesatApprovedEvents.......................................................................................................................................19

Contacts......................................................................................................................................................................20

VirginiaDepartmentofAlcoholicBeverageControl

2901HermitageRoadRichmond,VA23220(804)213-4400

WWW.ABC.VIRGINIA.GOV

Copyright©2017VirginiaDepartmentofAlcoholicBeverageControl

Allrightsreserved.Version2017.07.01


HowtoOpenaDistillery


LicensingInordertolegallydistillspiritsintheCommonwealthofVirginia,prospectivedistillersmustobtainaBeverageDistilledSpiritsPlantpermitfromtheAlcoholandTobaccoandTradeBureau(TTB)andaDistilleryLicensefromtheDepartmentofAlcoholicBeverageControl.Theproductionofspiritscannotbeginuntilbothdocumentshavebeenissued.AVirginiaABCDistilleryLicenseallowsforthemanufactureofdistilledspiritsandthesaleofthemanufacturedspiritstoVirginiaABC,thegovernmentoranyentityoutsidetheCommonwealthofVirginialegallyauthorizedtoreceivetheproduct.VirginiaABCisthewholesaledistributorandsoleretailerforalldistilledspiritssoldinVirginia.ADistilleryLicenseemaybeappointedasanindependentlyoperatedagentofVirginiaABCforthepurposeofsellingdistilledspiritsmanufacturedbyorfor,orblendedbysuchlicenseeonthelicensedpremisesatABCStoresestablishedonthedistiller’spremises.TobeappointedassuchanagentoftheBoardforthepurposeofsellingdistilledspiritsonthedistiller’spremisesthedistillerylicenseemustfirstenterintoawrittenagreementwiththeBoard.

TYPESOFLICENSES

1. DistilleryLicense:5,000gallonsorlessofalcoholorspiritsorboth,manufacturedduringalicensedyear.2. DistilleryLicense:Morethan5,000gallonsmanufacturedduringalicenseyear3. FruitDistilleryLicense:Authorizesmanufactureofanyalcoholicbeveragesmadefromfruitorfruitjuices.(Note:

thislicensedoesnotauthorizetheBoardtoestablishanABCstoreonthefruitdistiller’spremises.)4. LimitedDistilleryLicense:36,000gallonsorless,manufacturedduringalicensedyear.(Note:thedistillerymustbe

locatedonafarmintheCommonwealthonlandzonedforagriculturaluseandownedorleasedbythelicensee,andagriculturalproductsusedinthemanufactureofitsalcoholicbeveragesareproducedonthefarm.)

REQUIREMENTSFORLICENSING• Applicantshouldverifywiththelocality’szoningofficethatadistillerymaybeoperatedonthedesiredlocation.• FederalbasicpermitandcopyofcompletedTTBapplication• Diagramofdistilleryspacetobelicensedandplacementofdistilleryequipment• Listofdistillingapparatus• Deed/Lease/Sub-leaseofdistillingspace• Certificateofincorporation/organization• Articlesofincorporation/organization• Operatingagreement(Ifoneexists)• Listofissuedstockcertificatesormostrecentannualcorporatestockreport(ifapplicable)• OfficialDMVdrivingrecords• Company’sFederalIDnumber(FEIN)• PhotocopyofID

AllproducersoffoodproductswhichincludealcoholicbeveragesintheCommonwealtharerequiredtobeinspectedbytheVirginiaDepartmentofAgricultureandConsumerServices(VDACS)priortoproductionofsuchproducts.Informationregardingfoodsafetyandinspectionscanbefoundat:http://www.vdacs.virginia.gov/dairy-food-and-beverage-manufacturing.shtml


APPLICATIONFORABCLICENSETheapplicationforABClicenseswithinstructions[VirginiaABCLicense(805-52)]canbefoundanddownloadedfromourwebsiteathttps://www.abc.virginia.gov/licenses/get-a-license/retail-licensesAnABClicensecannotbeissueduntil:• Allrequireddocumentshavebeenreceived.Pleasenote:Failuretoproviderequireddocumentsistheprimary

causeofdelayinthelicensingprocess.• Aspecialagenthascompletedhis/herinvestigationwhichistoincludeasitevisit.• Allfeeshavebeenpaid.• Postingandpublishinghasoccurred.Theownersmustpublishnotice(inEnglish)atleasttwotimesinanewspaper

havingageneralcirculationinthecounty,cityortownwheretheownerproposestoconductbusiness.Thetwopublishingsmustoccurinconsecutiveweeks;thesecondpublishinginatleastsevendaysafterthefirst,butnolaterthanSaturdayofthesecondweek.

• Anylocalgovernmentorcitizenobjectionshavebeenresolved.TheCodeofVirginiacompelsVirginiaABCtoaffordcitizensoftheCommonwealth30days,fromthedateofthefirstnewspaperpublication,inwhichtolodgeavalidobjectiontotheissuanceofanABClicense.

• Theestablishmentisreadytobeginoperations.FEDERALPERMITSInformationanddocumentsregardingfederalrequirementsforobtainingpermitsandtheproductionofdistilledspiritscanbefoundonTTB’DistilledSpiritshomepage:https://ttb.gov/spirits

DistilleryStoreIfyourplansincludeopeningastoreonthepremisesofyourDistilleryinordertodirectlysellyourproduct(s)tothegeneralpublic,youmustfirsthaveatleastoneofyourproductslistedandsoldthroughVirginiaABCretailstores.MoreinformationabouttheVirginiaABClistingsprocesscanbefoundinour“SupplierManual”at:https://www.abc.virginia.gov/library/licenses/pdfs/suppliermanual.pdfDistillerswithaproductlistedwithVirginiaABC’sManagementofInventoryandProductSalesSystem(MIPS)whowishtoselltheirproductdirectlytopayingcustomersonthepremisesoftheDistillerymustfirstbeauthorizedasanABC“DistilleryStore”andenterintoacontractwithVirginiaABC.ThecompletedapplicationandagreementwillbereviewedbyVirginiaABCandanapprovalordenialdecisionwillbeissued.


Fees

FEETYPE FeeAmount

DistilleryLicenseapplicationfee $65.00

Criminalrecordcheck$15.00perpersonincorporationorLLCwhoareofficers,memberofcorporationorhavea10%ormorestake

DistilleryLicense,<=5,000gals $450peryear

DistilleryLicense, 5,001-36,000gals $2,500peryear

DistilleryLicense,>36,000gals $3,725peryear

FruitDistiller’slicense $3,725peryear

*TheDistillershallpaythenecessaryfeestorenewtheDistilleryLicenseonanannualbasis,aswellascomplywiththerequirementsstipulatedintheDistilleryLicenseprivileges.


Compliance


RecordKeepingDistillersmustkeepcomplete,accurateandseparaterecordsofallbusinessactivitiesforaperiodoftwoyearsonthelicensedpremises.SuchrecordsshallbeavailableforinspectionbyaVirginiaABCspecialagentduringreasonablehours.Ataminimumsuchrecordsshallinclude:

• Amountofalcoholicbeveragesmanufacturedduringacalendarmonth• Theamountofalcoholicbeveragesonhandeachmonth• Thetypeandquantityofrawmaterialsusedintheproductionofspirits• WithdrawalsforshipmenttoVirginiaABC• WithdrawalsforshipmentoutsideoftheCommonwealthtoinclude:

s Nameandaddressofconsignees DateofShipments Alcoholiccontent,brandname,type,sizeofcontainersandquantity

Distillerswhooperatedistillerystoresshallcomplywiththerecordkeepingandreportingrequirementsasrequiredbythe“DistilleryStoreAgreement.”RecordsregardingtheoperationofadistillerystorearesubjecttoinspectionandauditingbyauthorizedemployeesofVirginiaABC.Recordsmaybestoredasmicrofilm,microfiche,disks,thumbdrivesoranyotheravailablestoragetechnology,providedtheyareavailableforinspectionbyspecialagentsbetweenthehoursof9a.m.and5p.m.orwithin24hoursofarequest.HelpfulHint:DistillersarenotrequiredtokeepseparaterecordsforTTBandABC.DistillerswhoaccuratelycompleteTTBreportsandmaintainsupportingdocumentationwillhavemettherecordkeepingrequirementsforABC.

Inspections

TheVirginiaABCBureauofLawEnforcementroutinelymakesinspectionsoflicensedestablishmentstoverifythatsuchplacesareoperatinginaccordancewiththeABCActandBoardRegulations.Theseinspectionsaffordlicenseesandtheiremployeesan opportunity to become acquainted with their compliance senior special agent as well as provide licensees with theopportunitytoaskquestionsandbeupdatedonanyrelevantinformationpertainingtotheiroperations.Duringaninspectionaseniorspecialagentmayexamineandverify:• ThattheABClicenseandfederalpermitsarecurrentandposted• Therehasbeennochangeinownership• Requiredrecordsarebeingmaintained• Therehavebeennounauthorizedchangestothelicensedpremises

DistillerystoresaresubjecttoinspectionandauditsbyspecialagentsandotherauthorizedemployeesofVirginiaABC.Theseinspections/auditsaretoinsurethatthedistillerystoreisbeingoperatedinaccordancewiththesigned“DistilleryStoreAgreement”andthatallmoniesduetheagencyhavebeenpaid.DistillerystoresmayalsobeauditedbytheauditorofpublicaccountsastheyoperateunderanagencyagreementwithVirginiaABC.


OperatingaDistilleryStore


RequirementsandConditionsforDistilleryStores

Therequirementsandinstructionsfortheoperationofadistillerystorearefoundinthe“DistilleryStoreAgreement”whichisshownbelow:

DEFINITIONS

A. TheDepartment:TheDepartmentofAlcoholicBeverageControl.

B. TheBoard:TheVirginiaAlcoholicBeverageControlBoard.

C. Distillerystore:Governmentstorelocatedonadistiller'spremises,operatedbythedistillerasanindependentlyoperatedagentfortheDepartmentforthepurposeofsellingdistilledspirits.

D. Distiller(alsoreferredtoaslicensee):TheholderofaDistilleryLicenseissuedbytheDepartmentofAlcoholic

BeverageControlpursuantto§4.1-206(1)(2)oftheCodeofVirginia.

E. DistilleryLicense:LicenseissuedbytheDepartmentwhichauthorizestheholdertomanufacturealcoholicbeveragesotherthanwineandbeer,andtosellanddeliverorshipthesame,inaccordancewithBoardregulations,inclosedcontainers,totheDepartmentandtopersonsoutsidetheCommonwealthforresaleoutsidetheCommonwealth.WhentheBoardhasestablishedagovernmentstoreonthedistiller'slicensedpremisespursuanttosubsectionDof§4.1-119,suchlicenseshallalsoauthorizethelicenseetomakeachargetoconsumerstoparticipateinanorganizedtastingeventconductedinaccordancewithsubsectionGof§4.1-119andBoardregulations.

F. PlaceorPremises:Therealestate,togetherwithanybuildingsorotherimprovementsthereon,designatedin

theapplicationforalicenseandapprovedbytheBoardastheplaceatwhichthemanufacture,bottling,distribution,useorsaleofalcoholicbeveragesshallbeperformed,exceptthatportionofanysuchbuildingorotherimprovementactuallyandexclusivelyusedasaprivateresidence.

G. ABCBureauofLawEnforcement:ThedivisionwithintheDepartmentthatischargedwithenforcingthe

alcoholicbeveragecontrollawsandregulationsoftheCommonwealth.

H. SpecialAgents:EmployeesoftheDepartmentofAlcoholicBeverageControlwhomtheBoardhasdesignatedaslawenforcementofficers.


AUTHORITYTheDepartment,pursuanttoauthoritygrantedby§4.1-119ofthe1950CodeofVirginia,asamended,mayappointtheholderofaDistiller'sLicenseoritsofficersandemployeesasindependentlyoperatedagentsoftheBoardforthesaleofspiritsmanufacturedbysuchlicenseeatgovernmentstoresestablishedbytheBoardontheDistiller’slicensedpremises.TheDepartmentandtheDistilleragreethattheDistillershallbeauthorizedtosellsuchbrandsmanufacturedbyorfortheDistillerontheDistiller’slicensedpremisesonly.TheDistillerisnotastateemployeeandisnoteligibleforanybenefitsofemployeesoftheCommonwealthofVirginia.Inconsiderationofthetermscontainedinthisagreement,thepartiesagreetoenterintothiscontract.

OBLIGATIONSOFTHEPARTIESTheDistillerisauthorizedtosellsuchbrandsmanufacturedbyorfortheDistillerandmaintainedonthepremisesofthedistilleryonbehalfoftheDepartmentinaccordancewith,andinconsiderationof,thestipulationsandtermshereinafterprovided:1. TheDistillershallcomplywithallapplicableprovisionsoftheCodeofVirginia,ABCregulations,andanyotherapplicable

rules.

2. Theemployeessellingthedistilledspiritsshallbeatleast21yearsofageorolder.Distilledspiritsshallonlybesoldtopersons21yearsofageandolderwithproperidentificationwhoarenotintoxicatedorinterdictedfrompurchasingalcoholicbeveragesbyorderofaCircuitCourt.

3. AlloftheexpensesrelatingtotheoperationoftheDistillerystore,including,butnotlimitedtothenecessaryheat,light,bond,insurance,employeecompensationandotherutilitiesshallbebornebytheDistiller.TheDepartmentshallnotberesponsibleforanycostsorexpensesincurredbytheDistillerinsellingdistilledspiritsfortheDepartment.

4. TheDistillershallkeepcomplete,accurateandseparaterecordsofallbusinessdonepursuanttothisagreementinthemannerandformprescribedbytheDepartmentinthedistillermanualandshallkeepallsuchrecordsextendingbackforaperiodoftwoyearsinasafeandsecureplace.

5. TheDistillerconsentstopermitauthorizedrepresentativesoftheDepartmenttohaveunrestrictedrightstoentertheDistillerystoreandtoinspectrecords.

6. TheDistillerfurtheragreestofurnishanelectroniccashregister,internetconnection(e-mail,internet,uploadingforms)andcomputerequipment(monitor,printer)withacurrentlysupportedoperatingsystem.TheDistillerwillmaintainavalidemailaddressandbusinesstelephone.TheDepartmentwillprovidetheDistillerwithinstructionsonhowtoupload/providesales,returns,andcashdepositdata,locatedintheDistillerHandbook.TheDistillershallbearallexpensestoensurehardwareandsoftwarerequirementsaremet.

7. TheDistillerwillfileasuretybondwiththeBoardinanamountofatleast$25,000unlesstheneedforsuchbondiswaivedbydecisionoftheDepartment.SuchbondshallbeconditioneduponthepaymentofalltaxesandothermoniesduetheDepartment.TheDepartmentwillreviewtheneedofthesuretybondonanannualbasisandmaywaivetherequirementofboththesuretyandthebond,incaseswheretheDistillerhaspreviouslydemonstratedfinancialresponsibility.

8. TheDistillerwillcollectthesalestaxoneachbottleofdistilledspiritssoldandremitdirectlytotheDepartment.TheDepartmentwillinturnberesponsibleforremittingthesalestaxcollectedbytheDistillertotheVirginiaDepartmentofTaxation.


DURATION

Thisagreementshallremainineffectforaperiodofoneyearuponcommencementandshallautomaticallyrenewonanannualbasisthereafter,onthesametermsandconditionsherein,unlessterminatedpursuanttothisagreement.

RETAILOPERATIONSSubjecttotherequirementsofCodeofVirginia§4.1-119,theDepartmentshallfixtheretailpricesatwhichthedistilledspiritissoldintheDistilleryStore.Cashandcredit/debitcardsshallbethelegaltenderacceptedforthepurchaseofsuchdistilledspiritsintheDistilleryStore.Liquorsalescashreceiptdocumentsshallbemaintainedseparatefromallotherbusinessreceipts,preferablythroughaseparatecashregisterkey.AllcreditcardfeeexpensesshallbebornebytheDistiller.Inaddition,anyandallliabilityforfinesorsecuritybreachesasaresultoffailingtocomplywithPaymentCardIndustry(PCI)datasecuritystandardsshallbebornebytheDistillerystore.TheDistillerwillberequiredtoprovideanattestationofcompliancewithPCI-DSSwithin10businessdaysofrequest.

A.ConsignmentofLiquor

1. TheDistillerwillstoreliquorinventoryinabondedareaandwillselltheinventoryonlyafterithasbeenmovedtothesalesfloor.

2. Wheninventoryismovedfromthebondedareatothesalesfloorarea,itmustbereportedtotheDepartment.Onthefirstbusinessdayofeachmonth,theDistillerwillreporttotheDepartmenttheactualinventorymovedtothesalesfloorsincethelastreport.Paymentforwithdrawninventorywillbemade30daysafterreceiptofthereport.TheDepartmentshalldeterminetherequiredreportingformat.

3. TheDepartmentshallhavetherighttolimitthenumberofbottlesorcasesmovedfromthebondedareatothesalesfloorbasedonactualsaleshistorydata.

4. Asacustomerservicemeasure,theDistillermayacceptdamagedmerchandisereturnedbythecustomerevenifthedamageisduetocustomernegligence,i.e.droppingbottle,etc.Thecustomermustsupplythesalesreceiptandthebottlesealmustbeintact.TheDistillermustreportdamagedinventoryonthesalesreportformsprovidedbytheDepartmentanddenotewhetherasubsequentbottlewasgiventothecustomerorwhethercashwasreturned.AllmerchandisereturnsmustbemadeattheDistilleryStorewherepurchasedandnotatanABCretailoutlet.

5. DistillerystoresmayselldistilledspiritstoanABCretaillicenseeauthorizedtopurchasesuchspirits,providedthedistilleradherestoallVirginiaABCpoliciesandprocedures.

B.Operations

1. Hoursofoperation:DistilledspiritsmayonlybesoldduringhoursandondayspermittedforABC

retailoperations.2. TheDistilleryStoreistobeclosedonthefollowingHolidays:ThanksgivingDayandChristmasDay.


ENFORCEMENTTheABCBureauofLawEnforcementischargedwithenforcingthealcoholicbeveragecontrollawsandABCregulationsintheCommonwealth.

A. Compliance

1. TheDistillerissubjecttoinvestigationsthroughtheUnderageBuyerPrograminwhichunderagepersonsaresentintoalicensedestablishmenttoattemptapurchaseofalcohol.

2. TheDistilleryLicensemustbepostedinaconspicuousplacewithintheDistillerystore.

B. Training

AllemployeesandmanagementoftheDistilleryStorearerequiredtotakeatleastoneofthefollowingtrainingcoursesofferedbytheDepartment:1. ResponsibleSellersandServers:Virginia’sProgram(RSVP)trainingisdesignedforclerksandother"frontline"

employeestohelpthembecomemoreresponsibleandtobetterunderstandABClaws,rulesandregulations.2. Managers’AlcoholResponsibilityTraining(MART)isdesignedtohelpmanagersbecomemoreresponsibleandto

betterunderstandVirginialawsandregulations.C.ToolstoPreventUnderageSales

"DoNotSell"stickersareeasytoreadtoolsthataidsellerswhencheckingcustomeridentification.TheDistillerystoreshallobtainsuchstickersfromtheDepartment'sCommunicationsDivisionandaffixthemtocounterslocatedatthepointofsale.

D.Licensing

TheDistillershallatalltimesbeproperlylicensedbyVirginiaABC,aswellascomplywiththerequirementsstipulatedintheDistiller'slicenseprivilegesandthetermscontainedinthisagreement.AtanytimeduringwhichaDistiller’slicenseissuspendedorrevoked,theDistillerystoreshallnotbeallowedtooperate.

FINANCIALMANAGEMENTTheFinancialManagementServicesDivisionoftheDepartmentwillreconcilesalesreports.A. Deposits

1. TheDepartmentwillsetupanaccountatabankoftheDistiller'schoosing,pendingapprovalbytheVirginia

DepartmentoftheTreasury,forthepurposeofdepositingsalesproceeds.2. Depositsshallberequireddaily,weekly,ormonthlyasdeterminedbytheDepartment.TheDistilleragreestomake

remittancesofallmoniesreceivedfromthesaleofdistilledspirits,includingsalestaxes,intotheabovebankaccountinthemannerandformdeterminedanddesignatedbytheDepartment.

3. AllsalesreportsshouldbeuploadedtotheDepartmenteachtimeadepositismade.

B. SalesReports

Thesalesreportshallberequireddaily,weekly,ormonthlyasdeterminedbytheDepartment,andshallcorresponddirectlytothebankdeposit.Thesalesreportshallincludeaminimumofthefollowing:productcodes,retailpricepercode,thedepositdate,thetotaldeposit,listretailreturns,listsalestaxcollectedanditemizedtender.


C. Commissions

Inconsiderationforthesaleofadistilledspirit,theDepartmentagreestopaytotheDistiller,andtheDistillershallbeentitledtoreceive8percentofgrosssalesascompensationforhisservicesperformedpursuanttothisagreement.Inaddition,VirginiaABCwillalsoreimbursethestandardcasehandlingfeeforbottlessoldatdistillerstorelocations.Foreaseofimplementation,theDistillershouldmovebottlestotheretailstoreinsetcaseamounts.Forexample,iftheDistillerissellingABCproductXandithasabottlespercase(BPC)of8,thentheDistillerwillmoveoverthebottlesinincrementsof8toensurereceiptofthe$2percasereimbursement.IftheDistillermovesoverbottlesinlessthancase-sizeamounts,therewillbenocasehandlingfeereimbursementoradjustmenttotheDistiller’scost.Thecasehandlingfeereimbursementwillbeincludedwiththebailment(movedtostage)paymenteachmonth.

FACILITIESMANAGEMENTTheDistilleragreestokeeptheDistillerystorepremisesclean,welllitandingoodrepairtothesatisfactionoftheDepartmentandtomaintainthepremisesincompliancewithallapplicable,federal,stateorlocalrequirements.

AUDITSTheDepartment’sinternalauditororotherauthorizedDepartmentemployeesandthestateauditormayatanytimeconductanauditorinspectionofanybooksorrecordsoftheDistillerorDistillerystoreconcerningoperationsorchecksofinventoryandmoneyonhand.TheDepartmentshallhavefullandunrestrictedaccesstoallrecordsrelatedtothesaleofdistilledspirits.TheDistillerwillcooperateinanysuchauditorinspection,andtheDepartmentwillusereasonablecaretoavoidinterferencewiththeDistiller'sservicetothepublicwhilecarryingoutsuchauditorinspection.

TERMSANDCONDITIONS1. ItismutuallyagreedandunderstoodthattheforegoingagreementoftheDistilleroranyinteresttherein,cannot

bedirectlyorindirectlyassigned,transferred,sold,orinanywayalienatedbytheDistillerunlessexpresslyconsentedtobytheDepartmentinwriting.Inthecaseofanyproposedassignment,transfer,sale,alienationorthefilingofprobate,bankruptcyorotherinsolvencyaction,theDepartmentshallbeimmediatelynotifiedandretainstheoptiontoimmediatelyterminatethisagreementuponsuchnotice.

2. TheDistillerfurtheragreestonotifytheDepartmentonformsprescribedbythedepartmentofanychangesintradenameknownas"tradingas"or"t/a"orbusinessname(knownas“doingbusinessas”or“d/b/a”)orchangeinownership.

3. TheDistillershallhavenopowertomakeanystatement,representation,orincuranydebt,obligation,contractorliabilityofanykind,inthenameoftheVirginiaDepartmentofAlcoholicBeverageControlortheCommonwealthofVirginia.

4. TheagreementissubjecttoamendmentbytheDepartmentuponthirty(30)dayswrittennotice.5. TheagreementissubjecttoterminationbytheDepartmentortheDistilleruponthirty(30)dayswrittennotice;

provided,however,thattheDepartmentshallhavetherighttoterminatetheagreementimmediatelyandwithoutnoticeforgoodcause,whichincludes,butisnotlimitedto,anyofthefollowing:

i. TheDistilleroranyemployeesthereofviolatesanyprovisionoftheCodeofVirginia,policy,order,

ordirectiveoftheDepartment,includinganytermsofthisAgreement.ii. TheDistilleroranyemployeesthereofintentionallyparticipatesinmisappropriationofmoniesbelonging

totheDepartment.iii. Bankruptcy,receivershiporotherinsolvencyactionoftheDistiller.


TASTINGSDistillerylicenseeswhoareauthorizedtooperateanagencyABCstoreonthedistillerypremisesmayconducttastingeventsduringwhichsamplesofspiritsmaybeprovidedtopatrons.Additionally,distillerylicenseesmayalsooffersamplesofwine,beerorcidertopatronsduringtastingevents,providedthewine,beerorciderproductsaremanufacturedwithinthesamelicensedpremisesoroncontiguouspremisesofthedistillerylicenseethatisalsolicensedasawineryorbrewery.Samplesarelimitedto½ounceforspirits,fourouncesofbeerandtwoouncesofwineforeachproductsampledandnomorethanfourproductsamplescanbeprovidedperindividualperday.Nosinglesampleshallexceedfourouncesofbeer,twoouncesofwineoronehalfounceofspiritsunlessservedasamixedbeverageinwhichcaseasinglespiritssamplemaycontainuptooneandonehalfouncesofspirits.Nomorethanthreeouncesofspiritsshallbeservedanyonepersonperday.Whiledistillerylicenseesmaynotchargeforindividualdrinkstheyarepermittedtochargepatronsafeeforparticipatingintastingevents.Individuals,whoareundertheageof21orintoxicated,arenotpermittedtopurchase,consumeorpossessalcoholicbeverages.Distillerylicenseesandtheiremployeesareresponsibleforinsuringthatallindividualssamplingorpurchasingalcoholicbeveragesare21yearsorolderandarenotintoxicated.OnlythosedistilledspiritsproductsapprovedforsaleintheVABCdistillerystore,wine,beerandcidermanufacturedonthesamelicensedpremisesorcontiguouspremisesofthelicenseemaybeofferedforsampling.Nonalcoholicbeveragessuchasmixers,juiceorwatermaybeofferedaspartofthetasting(i.e.,amixedbeverage).Ifamixedbeverageistobeusedasthesample,thefinalmixshouldbepreparedinadvanceorfollowaprovenrecipeasnodistilleryemployeemaytastesamplesforconfirmationofflavorwhileonduty.Nosamplemaycontainmorethan½ounceofalcoholperdrink.Thetastingroomwillemployasystemofensuringthatcustomersareonlypermittedtoparticipateinonetastingeventpercalendarday.Thiscouldbeaccomplishedwithticketsthatarepurchasedinadvance,acashregisterreceiptoranyothermeansthatenablethedistillerystoretotrackpatronsthatreceivetastingseachdaywhetherpurchasedorgiven.Anypersonseekinganadditionaltastingwillbetoldtheyareunabletodoso.Distillerystoreemployeesmustensurethattheconsumerfinishesthesampleand/ordiscardsthecupandanyremainingsamplebeforeleavingthesamplingarea.Consumersarenottocarrysamplesaroundthedistillerystorenorremovethemfromthestorepremises.


MarketingtoRestaurantsInordertomarketyourproductstomixedbeveragelicenseesyou,youremployeesoryourrepresentativesarerequiredtoobtainaMixedBeverageSolicitorsSalesmanPermit.Theformwithinstructionscanbefoundanddownloadedathttps://www.abc.virginia.gov/library/licenses/pdfs/solictorsalesman.pdfDistillerylicenseesandtheiremployeesmayconducttastings(sampling)oftheirproductswithconsumersinmixedbeveragerestaurantsprovided:• Theproductstobesampledaresoldbytheestablishment• Theproductsbeingsampledmustbeservedtotheconsumerbyemployeesoftherestaurant• Nomorethanoneandonehalfouncesofspiritsproductsmaybeprovidedtoanyoneconsumerandeachsample

maynotcontainmorethanone-halfounceofspirits• Theproductsbeingofferedastastingsmustbepurchasedfromtherestaurantandthedistillerylicenseeortheir

employeesmustbepresentduringthetasting.• Thedistillerymaynotspendmorethan$100(exclusiveoftaxandgratuities’)atanyoneestablishmentduringany

24-hourperiod.Gratuitiesmaynotexceed20percentofthecostofalcoholicbeverages.• Distillerylicenseeshallkeepcompleterecordsofeachtastingwhichshallincludethedateandplaceofeach

tastingandamountspent.Distillersmayengagetheservicesofathirdpartyrepresentativetoconducttastingprovidedthattherepresentativehasobtaineda“SolicitorTastingPermit.”Theformforthispermitcanbefoundanddownloadedathttps://www.abc.virginia.gov/library/licenses/pdfs/solicitortasting.pdf

DistilleryStoreSalestoMixedBeverageRetailLicensees Distillerystoresmayselltheirproductstomixedbeverageretaillicenseesprovidedthefollowingguidelinesandproceduresarefollowed:

• Themixedbeveragelicenseeisresponsibleforprovidingthedistillerystorewithacopyofthemixedbeveragelicensethatincludesthelicenseenumberandanyotherinformationneededtoverifythevalidityofthelicense.Ifthereisanyquestionregardingthevalidityofamixedbeverageretaillicensepleasecontactyourenforcementagentpriortomakinganysales.

• Saleofminiatures(50mls)isprohibitedtomixedbeveragelicenseesexceptformotels,hotels,commoncarriersandgolfcoursesasassociatedwitharesortcomplex.

• Mixedbeveragelicenseecustomersmaynotpurchasevalueaddedproductpackagesforuseintheirplaceofbusiness.ValueAddedProductsareitemsofvaluethatareincludedinauniquepackagingofaregularlylistedproduct.Commonexamplesofvalueaddedproductsareglassware,flasks,T-shirts,jiggers,mixers,etc.

• Mixedbeveragelicenseesmaypurchaseco-packitemssolongasnoadditionalitemofvalueiscontainedintheco-pack.Co-packsaretwobottlesofdistilledspiritswhichareofferedatareducedpricewhenpurchasedasonesalesunit.Thepriceofthecombineditemsmustexceedtheregularlistedpriceofthemoreexpensiveitemintheco-pack.Allitemscontainedinaco-packmustberegularlylisteditemsandtheco-packmustbelistedandapprovedforsalebyVirginiaABCwithauniqueMIPSproductcode.

• Licenseeordersmaybepickedupbypersonsundertwenty-one(21)yearsofageifinpursuanceofdutiesasanemployeeofamixedbeveragelicensee.

• Arepresentativeofthelicenseemustsignthepurchaseorderatthetimeofpickup.• AgentsoftheEnforcementDivisionaretobeallowedunrestrictedaccesstostoresforthepurposeofexamining

thelicenseefiles.• RetailMixedBeverageLicenseesdonotpaysalestaxonpurchasesmadeinVirginiaABCstores.


ASSEMBLINGTHEORDER • AllmerchandisesoldtoMixedBeverageLicenseecustomersmusthaveaMonarchMarkingMachinelabelaffixedtothe

frontofeachitemindicatingthemixedbeverageretaillicensenumber,storenumberandordernumberusinga4digitordernumber.Theordernumbersmustbemaintainedbythedistillerystoreandconsecutiveforthestore.ThedistillerystoreisresponsibleforacquiringMonarchMarkingMachines(orasimilardevice)andlabels.

ExamplestampforStore032,firstmixedbeveragelicenseesale,soldtolicensee#12345:

032000112345

ExamplestampforStore032,secondmixedbeveragelicenseesale,soldtolicensee#54321:

032000254321

ItisnotrequiredthataMixedBeverageLicenseelabelbeaffixedtoeachindividualcontainerof50mlmerchandisesoldtoalicenseebutalabelmustbeaffixedtothecaseorbagthatcontainsthemerchandise.

• Allvalueaddeditems(add-ons)mustberemovedfromthemerchandisesoldtomixedbeveragelicenseespriortosale.

WHENTHEORDERISPICKEDUPBYTHELICENSEEAGENT:• PrinttwocopiesofthecompletedVirginiaABClicenseeorderform.Allinformationmustbecompleteandaccurate.• Havethelicenseeagentsignthecompletedlicenseeorderforminthespaceopposite“ReceivedBy”onbothcopies• StorepersonnelwillfillouttheTransportationSectiononbothcopiesoftheformwhenthelicenseeagenthasaccepted

themerchandise.• RetainonecopyoftheLicenseeOrderformforstorerecords.Thesecondistobeissuedtothelicensee.• CompletedlicenseeorderformsmustbemaintainedbytheDistilleryStoreandavailableforauditforaperiodofnoless

thantwoyears.

METHODSOFPAYMENT• Cash• MixedBeverageLicenseeBusinessChecks(Note:VirginiaABCDistillerystoresareresponsibleforcollectionofanyfunds

notreceivedformerchandiseduetoreturnedchecks.Ifthereturnedcheckcannotbesatisfiedpriortomakingthedepositforthatsalesperiod,thedistillerisresponsiblefordepositingthedifference.

• CertifiedPersonalChecksorCashier’sChecks• CreditorMC/VisaDebitCard

REPORTING

• Salestomixedbeveragelicenseesmustbereportedundertheappropriatesectionofthemonthlysalesreporting.

• Thedistillerystoremustalsofilloutthedetaillogofsalestomixedbeveragelicenseesandsubmitmonthlywhensuchsaleshaveoccurred.Thetotalslistedonthislogmustmatchthemonthlysalesreport.


RemoteSalesatApprovedEvents

DistilleriesmayselltheirdistilledspiritsproductsdirectlytoconsumersatspecialeventsintheCommonwealthprovidedthefollowingconditionsareobserved:

• ThedistillerymusthaveanapprovedDistilleryStoreAgreementonfileandbeingoodstandingwithVirginiaABC.• TheeventwheretheRemoteABCStoreprivilegeistooccurmustbeatasiteofaneventlicensedbytheBoardand

conductedforthepurposeoffeaturingoreducatingtheconsumingpublicaboutspiritsproducts.ABanquetMixedBeverageSpecialEventlicenseoraManufacturer’sDistilledSpiritsEventlicenseforthatparticulareventmustbeonfilepriortoapproval.(Note:AmanufacturerDistillerymayobtainaManufacturersEventLicensepursuantto§4.1-215whichallowsamanufacturerofdistilledspirits,whetherlicensedintheCommonwealthornot,mayobtainabanquetlicenseforaspecialeventasprovidedinsubdivisionA4of§4.1-210uponapplicationtotheBoard,providedthatsucheventis(1)ataplaceapprovedbytheBoardand(2)conductedforthepurposesoffeaturingandeducatingtheconsumingpublicaboutthemanufacturer'sspiritsproducts.Suchmanufacturershallbelimitedtonomorethanfourbanquetlicensesforsuchspecialeventsperyear.Wheretheeventoccursonnomorethanthreeconsecutivedays,amanufacturerneedonlyobtainonesuchlicensefortheevent.Suchbanquetlicenseshallauthorizethemanufacturertogivesamplesofspiritstoanypersontowhomalcoholicbeveragesmaybelawfullysoldindesignatedareasatthespecialevent,providedthat(A)nosinglesampleshallexceedone-halfounceperspiritsproductoffered,unlessservedasamixedbeverage,inwhichcaseasinglesamplemaycontainuptooneandone-halfouncesofspirits,and(B)nomorethanthreeouncesofspiritsmaybeofferedtoanypatron.Nothinginthisparagraphshallprohibitsuchmanufacturerfromservingsuchsamplesaspartofamixedbeverage.)

• ThedistillermustcompleteaDistilleryRemoteRequestandreceiveapprovalpriortotheremotesaleofdistilledspirits.RequestforRemoteABCStorePrivilegemadetotheVirginiaABCBureauofLawEnforcementmustbemadethroughtheABCWebsite.Requestssubmittedlessthansevenworkingdaysinadvancemaynotbeprocessedandapprovedpriortotheeventdate.DistilleryRemoteRequest:https://www.abc.virginia.gov/licenses/spirits-industry-resources/distillery-remote-request

• Thedistillermustkeepseparatesalesrecordsofwhatissoldintheirdistillerystoreandeachoffpremiseeventtheyattend.Thesearetobetransmittedtothedepartmentuponrequest.

• Thedistillerisresponsibleforcollectingandremittingsalestaxesatthecorrectrateforthelocalityinwhichthesaletookplace.SalesassessedataxratewhichdiffersfromthatofthephysicaldistillerystoremustbereportedseparatelytoVirginiaABConthemonthlysalesandstagingreport.

• Totalendinginventoryforeachproductsoldregardlessofthelocationwhereitissoldmustnotexceedtheestablishedstaginglimitof125%ofsalesforagivenmonth.Whenmonthendinginventoriesexceedthismaximumlevel,nofurtherstagingcanoccuruntilinventorylevelsarereducedtoasatisfactorylevel.

• Spiritspurchasedatanyspecialeventassociatedwiththeremotestoreprivilegeshallbeforoff-premiseconsumptiononly.

• Salestomixedbeveragelicenseesatremotesaleslocationsarepermittedprovidedallproceduresintheprevioussectionregardingsalestomixedbeveragelicenseesarefollowed.

• ADistillerythatishostinganeventwhereathirdpartyhasobtainedaMixedBeverageSpecialeventlicenseforthepurposeoffeaturingandeducatingtheconsumingpublicaboutspiritsproductsandwhohasceasedoperationoftheirVirginiaABCstoreforalicensedeventtakingplacewithintheareaoftheVirginiaABCstorecouldnotalsoqualifyfortheprivilegeofaremotelocationtosellspiritsatretailinthesamestorearea.However,thatDistillerymayobtainaremotelicensetosellatretailatothereventsprovidedtheirVirginiaABCstoreoperationhadceased.ThiswouldincludetheabilitytooperatearemotelocationonthesameaddressedpropertyoftheeventtakingplaceintheVirginiaABCstorearea,butcouldnotbeinsidethephysicalstoreareaasthesalesoperationsinthedesignatedstoreareamustceaseandmaynotresumeuntilonehouraftertheevent.(Note:thisprovisiononlyappliestoeventstakingplacewithintheestablishedVirginiaABCstorearea.)


ContactInformation

ForinquiriesregardingDistillerystoregeneralinformation,salesreportingandcommission,pleasecontact:GregAckerman—FinancialManagementSpecialist(804)[email protected]

Forinquiriesregardingemployeetrainingandalcoholeducationinformation,pleasecontact:RobertJackson—ABCEducationCoordinator(804)213-4571Robert.Jackson@abc.virginia.govInformationonoureducationalprogramsRSVP(ResponsibleSeller’s&Servers:Virginia’sProgram)andMART(Managers’AlcoholResponsibilityTraining)canbefoundat:https://www.abc.virginia.gov/licenses/trainingForinquiriesregardinglicensecomplianceanddistilleryoperations,pleasecontactyourassignedcomplianceseniorspecialagent.ThecontactinformationformembersofourComplianceUnitandthelocalitiestheyservecanbefoundat:https://www.abc.virginia.gov/enforcement/bureau-of-law-enforcement/compliance-unitIfyouareunabletolocateyouassignedComplianceAgent,pleasecontact:SACMarcHaalman—ABCComplianceSpecialAgentinCharge(804)213-4626/4632Marc.Haalman@abc.virginia.govForinformationregardinghavingproductslistedforsaleinABCstores,bailmentandmarketingwithABC,pleasecontact:MariaJeter—MarketingSpecialist(804)[email protected]@abc.virginia.govForinquiriesregardingdistillerystoreaudits,pleasecontact:GhiaSmith—InternalAuditSpecialist(804)[email protected]

Documents

DISTILLERY MANUAL OPERATING PROCEDURES FOR DISTILLERY STORES · Beverage Control pursuant to §4.1-206 (1)(2) of the Code of Virginia. E. Distillery License: License issued by the