HB 125 — AN ACT TO AMEND TITLE 4 OF THE DELAWARE CODE RELATING TO CRAFT ALCOHOLIC BEVERAGES.

Schwartzkopf &HOUSE Sen.OF REPRESENTATIVES 150th GENERAL ASSEMBLY HOUSE AMENDMENT NO.

McBride2 Reps.TO HOUSE BILL NO.

Briggs125 King,AMEND Griffith,House Ramone,Bill Yearick;No.

Sens.125 by deleting lines 6 through 8 in their entirety and inserting in lieu thereof the following:

Lopez,“the Sokolatotal HOUSEdomestic OFsales REPRESENTATIVESof 150thbeer GENERALof ASSEMBLYall HOUSEaffiliated BILLsuppliers NO.or manufacturers shall not exceed 6 millon barrels.

125the ANmaximum ACTamount TOcurrently AMENDspecified TITLEby 427 OFC.F.R. THE DELAWARE CODE RELATING TO CRAFT ALCOHOLIC BEVERAGES.

BEPart IT25, ENACTED§ BY25.152(a)(2) THEor GENERALas ASSEMBLYhereafter OFamended.” THEFURTHER STATEAMEND OFHouse DELAWARE:Bill No.

Section125 1.by deleting lines 9 through 14 in their entirety and inserting in lieu thereof the following:

AmendҤ Title512C 4Microbrewery. of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§(c) 512B(8):Notwithstanding any provision of this title to the contrary, a microbrewery license shall allow the licensee:

(6) The provisions of § 506§ 506 of this title to the contrary notwithstanding, itto shall be permitted to have an interest in, be affiliated with, operate, or own another supplier or manufacturer located outside the State and have an interest in a farm winery, microbrewery,brewery-pub, and/or craft distillery licensed under this chapter and actually located in this State, provided that the total domestic sales of beer of all affiliated suppliers or manufacturers shall not exceed the6 maximummillion amountbarrels. that a craft brewery, as currently defined or as hereafter amended by the Brewer’s Association or its successor organization, is permitted to brew or sell.

the maximum amount currently specified in 27 C.F.R.

§ 512C(c)(5):512G Shipment of alcoholic beverages between commonly-owned entities.

The(a) Any provisionsentity oflicensed § 506in of this titleState pursuant to the§ contrary512A, notwithstanding,§ to512B, be§ permitted512C toor have§ an512E interestof in,this betitle, affiliatedor with,any operate,out-of-state orsupplier ownlicensed anotherpursuant supplierto or§ manufacturer501 locatedof outsidethis thetitle Statewho, andas havedetermined anby interestthe inCommissioner, awould farmmeet winery,the brewery-pub,requirements and/orof craft§ distillery512A, licensed§ under512B, this§ chapter512C andor actually§ located512E inof this State,title providedif thatit thewere totallocated domesticin salesthis ofState, allis affiliatedpermitted suppliersto sell or manufacturersship shallalcoholic notbeverages exceedthey themanufacture maximumto amountan thatentity alicensed craftin brewery,this asState currentlypursuant definedto or§ as512A, hereafter§ amended512B, by§ the512C Brewer’s Association or its§ successor512E organization,of isthis permittedtitle subject to brewall orof sell.the following conditions:

currently(1) The specifiedshipping and receiving licensees must be under common ownership and control, the licensees’ domestic sales of beer must be less than 6 million barrels in 27a C.F.R.calendar year, and must both apply for and receive a permit pursuant to this section.

Part 25, § 25.152(a)(2) or as hereafter amended.

SYNOPSIS This bill is intended to facilitate the growth and expansion of Delaware licensed craft alcoholic beverage companies within the State by permitting them to continue to grow and expand in an increasingly competitive environment.

This bill does not change the position of craft alcoholic beverage companies in the traditional “three-tier” system.

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04/12/201905/07/2019 08:5501:25 AMPM 2141500067(2) A licensee must apply for a permit with the Commissioner setting forth the nature of its license, naming the licensees or out-of-state suppliers that it desires to ship to directly or receive alcoholic beverages from directly, and such other information as the Commissioner may require.

(3) The Commissioner shall determine if a licensee meets the requirements of § 512A, § 512B, § 512C or § 512E of this title and is otherwise qualified for a permit pursuant to this section.

(4) If the Commissioner determines the licensee is eligible, the Commissioner shall issue a permit to the licensee.

(5) A permit holder under this section shall be permitted to sell product properly received under the terms of its permit as though it were manufactured at its premises, in accordance with the terms and conditions of its license, so long as it is permitted to manufacture that type of alcohol.

(6) If a licensee’s total domestic sales of beer for all affiliated suppliers or manufacturers is between 2 million and 6 million barrels of beer, transfers authorized by this section from licensees pursuant to § 501 and § 512C of this title to commonly owned licensees pursuant to § 512B of this title for the purpose of sales to consumers for consumption on the brewery-pub premises may be made only if the brands transferred for on-premise consumption are produced under the same trade name approved by the Commissioner for the licensee pursuant to §512B of this title.

Licensees pursuant to § 512B of this title may sell product to consumers produced by affiliated licensees under different trade names for consumption on the brewery premises if such product is purchased from a licensee pursuant to §522 of this title.

(7) For purposes of this section, trade name means a trade name approved by the Commissioner that is consistent with the definition in Title 6 § 3302(7) or a successor statute.

Section 2.

Amend Chapter 7, Title 4 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§721.

Brewery.

No provision of this title shall prevent the Commissioner from authorizing any brewery to sell and to deliver beer to any person in this State who holds a license to receive and resell beer, if a duplicate bill of each sale is filed with or mailed to the Commissioner, provided that the Commissioner shall not authorize the resale and delivery of beer to licensees within this State by any brewery whose total domestic sales, when including all affiliated licenses whether in or out of this State, exceeds 6 million barrels of beer in a single calendar year.” SYNOPSIS This amendment is intended to respond to changes in the regulated alcohol beverage industry by allowing licensed Delaware brewery pubs and microbreweries to affiliate with other in-state or out-of-state brewers while retaining their HD :

NSW :

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05/07/2019 01:25 PM current license privileges.

This bill increases the production volume threshold for the affiliated brewers and maintains the position of craft alcoholic beverage companies in the traditional “three-tier” system by limiting brands that can be transferred from a commonly owned manufacturer or microbrewery to a brewery-pub for consumption on the brewery pub premises.

This amendment also corrects a drafting error in the original bill.

HD :

NSW :

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