Legal Blog

The Saturday Side Bar: Challenges in the Alcoholic Beverage Industry

For those of you who have been reading the Saturday Side Hustle, you know the debut installment of the blog featured a Maryland craft brewery who was very new at the time. Really it still is. I’ve been a big fan of locally oriented craft breweries for a long time. I always like to find new ones to try when I travel.

In a morning edition of the Baltimore Business Journal, I read an article on a report by the National Beer Wholesalers Association and the Beer Institute that the beer industry injects $4 billion into the Maryland economy annually and employs over 30,000 people. The article also cited a quote from the Beer Institute CEO that the industry is responsible for 2.1 million jobs and contributing $328 billion to the American economy. I thought that was pretty impressive given that less than a century ago the industry was shut down via the Eighteenth Amendment to the U.S. Constitution.

In any event, it’s interesting given the size of this economic contribution that this industry is still subjected to many business-challenging controls, not only in the form of government regulation, but also due to distribution hierarchies that make it difficult for manufacturers to broaden their geographic footprints. I know many who self-distribute because they aren’t yet in a volume position that allows them to give up the shares of their margins that some of the larger distributors require. I think it is very challenging to make the leap from local to regional presence successfully.

I also think these challenges are applicable to the broader alcoholic beverage industry. I know in my area for example, if you as a consumer want alcohol other than beer and wine, you have to get it from a county distribution outlet, although I think there is an exception for local manufacturers (distilleries). I also think if you are a local retailer here who sells alcoholic beverages to the consuming public, you have to get it from the county at wholesale. This would, of course, apply to restaurants and retail stores.

I don’t think things are the same wherever you go. I think in some places you can get whatever you need at the grocery store as part of your normal shopping routine. I think also that there are some places where that’s only true on certain days during certain hours. I think Sunday is a classic day for many locations not to allow the sale of alcoholic beverages, but I seem to remember when I lived in Baltimore, you could go into a bar or restaurant and get what you wanted on Sunday – in some place to go – but most of the liquor stores would be closed.

All of this is so interesting that I think I am going to writing about it. There are various regulations at the federal, state and local levels that deal with manufacturing, distributing and advertising these products. I think it’s going to be interesting and hope you do too!

 

For more information on this topic, please contact Scott Lloyd at slloyd@offitkurman.com.

 

ABOUT SCOTT LLOYD

slloyd@offitkurman.com | 301.575.0357

Scott Lloyd is a registered patent attorney who specializes in intellectual property counseling and commercialization work. He has served as a technology commercialization specialist and advisor to companies in a diverse array of markets, including biotechnology, pharmaceuticals, medical devices, food and beverage, specialty chemicals, technology, and engineering. In addition, Mr. Lloyd spent ten years as in-house general counsel to small and mid-sized companies, where he managed corporate matters and resolved commercial disputes in addition to intellectual property strategy, and now serves in the same capacity for entrepreneurial clients. He serves as counsel to small and mid-sized business owners seeking to implement growth strategies and succession plans.

While in house, Mr. Lloyd has also contributed to the successful formation of international affiliates of domestic businesses as well as a $400,000,000 business acquisition.

 

 

ABOUT OFFIT KURMAN

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