Confusion on Distilled Spirits Infusion
The food and drink editor at the San Francisco Chronicle recently blogged about the Department of Alcoholic Beverage Control and its recent investigations of restaurants with liquor licenses that are reportedly infusing (“rectifying”) distilled spirits with other ingredients.
Another blogger jumped on the bandwagon and called ABC investigators “thugs.”
The number of negative reader comments on these blogs just astounded me. Sometimes when people have negative feelings about law enforcement agencies, they seem to get blown out of proportion.
Here are some of the issues raised, along with some information based upon my 29 years experience with the Alcoholic Beverage Control:
1. What is rectification?
The Alcoholic Beverage Control issued an Industry Advisory in 2008, which explains rectification:
Rectification is any process or procedure whereby distilled spirits are cut, blended, mixed or infused with any ingredient, which reacts with the constituents of the distilled spirits and changes the character and nature or standards of identity of the distilled spirits. One example of rectification is, but not necessarily limited to, creating products such as ‘lemoncello’ or ‘limoncello’ in which sugar and citrus products are combined with vodka and stored, initiating a maturation process which consequently changes the character and nature of the vodka, and possibly its alcohol content. The simple mixing of alcoholic beverages with other ingredients for immediate consumption is not considered rectification. [Emphasis added.]
2. Who can rectify?
Any person who rectifies requires a Rectifier’s license issued by the Alcoholic Beverage Control. This type of license, with a few exceptions carved out by the legislature, is not issued to anyone holding a retail license such as a bar or restaurant. Section 23368 of the California Business and Professions Code says:
”23368. A rectifier’s license authorizes the person to whom issued to cut, blend, rectify, mix, flavor, and color distilled spirits and wine upon which the excise tax imposed by Part 14 of Division 2 of the Revenue and Taxation Code has been paid, and, whether so cut, blended, mixed, flavored, or colored by him or any other person, to package, label, export, and sell the products to persons holding licenses authorizing the sale of distilled spirits.”
3. Alcoholic Beverage Control investigators are a bunch of thugs and bureaucrats
Alcoholic Beverage Control investigators are well educated, highly-trained law enforcement professionals who have a job to do. Protect public health and safety. Just like police and firefighters. Their job is to enforce existing laws created by the California legislature. They actually do it very well. California is viewed as one of, if not the, finest liquor control agencies in the U.S, and a model for other agencies throughout the country in terms of effective, efficient and fair licensing, enforcement and prevention.
4. “Mixologists . . . bring revenue to the ABC through sales”
ABC is a special fund agency. It is funded entirely from license fees paid by the alcoholic beverage industry (retailers, wholesalers and manufacturers). It also receives grants for special programs (such as decoy programs) through the California Office of Traffic Safety from the National Highway Traffic Safety Administration. All revenue from the fines ABC collects goes directly into the State’s General Fund.
5. One of the blog comments said, “Is there a meeting at the [Alcoholic Beverage Control] with a bunch of people sitting around deciding that it’s time to focus more attention on recipe creation than, let’s say–underage drinking?”
ABC doesn’t have time to sit around and ask, “Who are we gonna pick on this week?” Investigations are based on complaints. These complaints may come from competitors, disgruntled employees, parents, spouses, local law enforcement, public health officials or others.
When investigators are at restaurant or bar based upon a complaint, they may discover another violation at the same time.
Sales to minors and underage drinking is one of the Department’s highest enforcement priorities. They will even respond 24-7 to any alcohol-related emergency involving a minor, to trace the source of the alcohol.
6. What are the consequences of rectifying without the proper license?
A retailer who does so would be misusing their license privileges. It’s not likely a business owner or bartender will get carted off to jail for it. However, the Alcoholic Beverage Control could issue a warning or file an accusation resulting in a suspension or fine. It looks at each case individually and decides what to do.
If people feel that bartenders should be allowed to rectify, they should contact their local legislator. Meantime, Alcoholic Beverage Control investigators are obliged to enforce existing laws in a fair and impartial manner — far from thuggery. I don’t know if that’s a word or not, but it sure seems to fit.
April 19th, 2013 at 8:26 pm
Aryn – No other license is needed with the Type 07 Rectifier’s License. With the Type 07 license, you may function as a distilled spirits wholesaler and sell directly to bars. However, if you do, then you will have to be subject to all the various laws that pertain to a distilled spirits wholesaler. As for where you can make the product, you will have to contact your local planning department about whether you are zoned properly. Usually, mixing, blending, bottling and packaging require industrial zoning. You’ll need tanks and bottling machinery. You must be actively bottling at the time you receive your Type 07 license, or within 30 days after that. There are other requirements as well, not only State ABC requirements, but the U.S. Department of the Treasury, Alcohol & Tobacco Tax & Trade Bureau as well. So, don’t rush into it without doing your homework. Lauren
April 18th, 2013 at 2:29 pm
HI! What a helpful blog! I am wondering, my associates and I want to start a business infusing liquor. It looks like we become rectifiers with an 07 license. Do we need any other license as well? Are we able to then sell directly to bars? Or do we need to sell to a wholesale distributor? Are we allowed to make the infusions out of our home or do we need a commercial kitchen or something of the like? And what about storage of the product?
Thanks so much for your help!
January 21st, 2013 at 8:39 pm
Justin,
When you say, “manufacturer” I assume you mean a licensed distilled spirits manufacturer. A distilled spirits manufacturer (Type 04 licensee) may sell distilled spirits packaged by or for him only to distilled spirits wholesalers, other Type 04 licensees, distilled spirits manufacturer’s agents, and distilled spirits rectifiers (Section 23363, 23356 CA Business & Professions Code).
A Type 04 licensee may also sell industrial spirits or nonbeverage spirits to nonlicensees for use in the trades, professions or industries, and the containers or packages must be larger than one gallon (Section 23385).
Please contact the Dept. of the Treasury, Alcohol Trade & Tax Bureau, about setting up a Manufacturer of Non-Beverage Products operation.
I hope this helps. Lauren
January 21st, 2013 at 11:44 am
Good day Lauren,
I have developed an extraction method for flower essences using alcohol. I would like to buy bulk orders (1000 liters or more) of alcohol for this process. I spoke with a manufacturer who told me that I would need a rectifier license for him to sell bulk orders to me. Is this the only way that I can buy bulk orders in California? And since I am evaporating all of the alcohol in the extraction process, do I need any special licensing to then sell that product here in California? Thank you for this wonderful blog!
June 30th, 2011 at 4:05 pm
Brian,
Yes, it’s true. Senate Bill 32 is currently working its way through the legislature. According to the bill analysis online,
SB 32 will clarify the definition of “rectifier” within the state liquor law so that an on-sale licensee will be allowed (without the need for a separate rectifier’s license) to color, flavor, or blend distilled spirits or wine products on the licensed premises for consumption on his or her premises. There is a hearing on the bill set for July 6, 2011. You can follow the progress of the bill, or even subscribe to updates concerning it, at the legislative info website at:
http://www.leginfo.ca.gov/bilinfo.html
Thanks for your question. Lauren
June 30th, 2011 at 2:33 pm
I read on another website that a bill was introduced in the state legislature that would make it legal for a license holder to infuse spirits for consumption on the premises. Do you know if this law has passed and what changes it will bring? Thanks
March 24th, 2011 at 10:34 am
David,
The Type 07 allows you to sell to a bar (retailer) as long as it’s a bar with a full liquor license, and not just a beer bar or beer and wine bar.
As to a home-based business, you would have to be zoned properly for that activity. So check with your local planning department. The CA Department of Alcoholic Beverage Control (ABC) cannot issue a license contrary to any valid zoning ordinance. If you are properly zoned, then the ABC might license your location. There are businesses who operate out of their homes, though I can’t say I’ve ever heard of a rectifier operating out of his or her home.
A Type 07 may function as a distilled spirits wholesaler (Type 18) and sell to retailers, but you’ll have to comply with all the laws regarding distilled spirits wholesalers. Among other things, you’ll need “warehouse space” large enough to maintain a “reasonable stock” of distilled spirits. You could lease the warehouse space in a licensed warehouse.
Labeling of distilled spirits is handled by the U.S. Department of the Treasury, Alcohol & Tobacco Trade and Tax Bureau. There’s a lot of good information on their website, and you could always call and speak with an agent personally. I’ve found them to be very responsive. I will send you additional details via email about Type 07 and 18 requirements. Lauren
March 24th, 2011 at 9:50 am
Thank you for the prompt response – does a type 07 license allow me to produce small batches from home for sale to authorized vendors (like a bar?), or would I have to set up a commercial operation somewhere, get a storefront, etc.? And what are the regulations regarding labeling? The regulations are very confusing regarding spirits; they seem much more well-defined for beer and wine. You have my email, perhaps we could discuss my situation in more detail offline? Thank you very much for all help and advice.
March 24th, 2011 at 9:06 am
Good Morning David,
A Type 07 rectifier’s license would allow you to rectify your product, and to package, label, export and sell the product to persons holding licenses authorizing the sale of distilled spirits. However, the license would not authorize you to sell directly to consumers. Thanks for your question. Lauren
March 23rd, 2011 at 1:41 pm
I recitfy a popular lithuanian drink by combining honey, spices and everclear, entirely for personal consumption. I am interested in obtaining a licence to sell it legally, but would like to do so directly to the public (I’m not able/wanting to do so on a large enough scale to sell it to retailers). Is that possible? Thanks.