Chapter 134
AN ACT
SB 451
Relating to distilleries; creating new
provisions; and amending ORS 471.200, 471.230 and 471.396.
Be It Enacted by the People of
the State of
SECTION 1. ORS 471.230 is amended to read:
471.230. (1) A
distillery license shall allow the holder thereof to import, manufacture,
distill, rectify, blend, denature and store spirits of an alcoholic content
greater than 17 percent alcohol by weight, to sell the same to the Oregon
Liquor Control Commission[,] and to
transport the same out of this state for sale outside this state. Distillery
licensees shall be permitted to purchase from and through the commission
alcoholic beverages for blending and manufacturing purposes upon such terms and
conditions as the commission may provide. No such licensee shall sell any
alcoholic beverage within this state except to the commission or as provided in
[subsection (2) of] this section.
However, any agricultural producer or association of agricultural producers or
legal agents thereof who manufacture and convert agricultural surpluses,
by-products and wastes into denatured ethyl and industrial alcohol for use in
the arts and industry shall not be required to obtain a license from the
commission.
(2) A distillery
licensee [that distills brandy or pot
distilled liquor] may:
(a) Permit tastings of [such brandy or pot] the distilled
liquor [by visitors on] manufactured
by the distillery. The tastings may be conducted on the premises and on at
least one other premises owned or leased by the
licensee. The licensee must purchase the [brandy
or pot] distilled liquor from the commission.
(b) Apply for
appointment as a retail sales agent of the commission for purposes of retailing
only [brandy or pot] distilled liquor
that the licensee distilled in
(3) Notwithstanding
ORS 471.392 to 471.400, a distillery licensee may also hold a full on-premises
sales license for a location at the licensed premises of the distillery and a
full on-premises sales license for one other location. All distilled spirits
sold under the full on-premises sales license must be purchased from the
commission.
SECTION 2. ORS 471.396 is amended to read:
471.396. (1) The
prohibitions of ORS 471.394 (1) do not apply to persons holding winery
licenses, grower sales privilege licenses, brewery-public house licenses,
distillery licenses or brewery licenses, to the extent that retail sales
are authorized by the statutes establishing the privileges of each license.
(2)(a) The prohibitions
of ORS 471.394 (2) and (3) do not apply to a person who wholesales alcoholic
liquor and who is not required to be licensed under the provisions of this
chapter if the retail licensee does not sell any brand of alcoholic liquor sold
or distributed by the person and does not sell any brand of alcoholic liquor
produced by any manufacturer doing business with the person selling at
wholesale.
(b) The prohibitions of
ORS 471.394 (2) and (3) do not apply to a manufacturer of alcoholic liquor if
the retail licensee does not sell any brand of alcoholic liquor sold,
distributed or produced by the manufacturer and does not sell any brand of
alcoholic liquor sold, distributed or produced by any subsidiary or other
business entity that the manufacturer owns or manages, or that the manufacturer
exercises control over.
(3) The prohibitions of
ORS 471.394 do not apply solely by reason of the family relationship of a
spouse or family member to a manufacturer or wholesaler if:
(a) The manufacturer or
wholesaler is licensed by the Oregon Liquor Control Commission to sell
alcoholic liquor at wholesale;
(b) The license
authorizing sale of alcoholic liquor at wholesale was first issued before
January 1, 1965, and has been held continuously since that date;
(c) The spouse or family
member holds or seeks a license that authorizes the retail sale of alcoholic
liquor for off-premises consumption only; and
(d) The manufacturer or
wholesaler does not directly or indirectly sell alcoholic liquor to the spouse
or family member.
(4) The prohibitions of
ORS 471.394 do not apply solely by reason of the family relationship of a
spouse or family member to the retail licensee if the manufacturer or
wholesaler is licensed by the commission to sell alcoholic liquor at wholesale
and does not directly or indirectly sell alcoholic liquor to the spouse or
family member.
(5) Notwithstanding ORS
471.394, a manufacturer or wholesaler, and any officer, director or substantial
stockholder of any corporate manufacturer or wholesaler, may hold, directly or
indirectly, an interest in a full or limited on-premises sales licensee,
provided that the interest does not result in exercise of control over, or
participation in the management of, the licensee’s business or business
decisions, and does not result in exclusion of any competitor’s brand of
alcoholic liquor.
(6) Notwithstanding ORS
471.394, a full or limited on-premises sales licensee, and any officer,
director or substantial stockholder of any corporate full or limited
on-premises sales licensee, may hold, directly or indirectly, an interest in a
manufacturer or wholesaler, provided that the interest does not result in
exercise of control over, or participation in the management of, the
manufacturer’s or wholesaler’s business or business decisions, and does not
result in exclusion of any competitor’s brand of alcoholic liquor.
(7) Notwithstanding ORS
471.394, an institutional investor with a financial interest in a wholesaler or
manufacturer may hold, directly or indirectly, an interest in a retail licensee
unless the institutional investor controls, is controlled by, or is under
common control with, a wholesaler or manufacturer. Notwithstanding ORS 471.394,
an institutional investor with a financial interest in a retail licensee may
hold, directly or indirectly, an interest in a wholesaler or manufacturer
unless the institutional investor controls, is controlled by, or is under
common control with, a retail licensee. The provisions of this subsection apply
only to an institutional investor that is a state or federally chartered bank,
a state or federally chartered mutual savings bank, a mutual fund or pension
fund, or a private investment firm. The principal business activity of the
institutional investor must be the investment of capital provided by
depositors, participants or investors. The institutional investor must maintain
a diversified portfolio of investments. The majority of the institutional
investor’s investments may not be in businesses that manufacture, distribute or
otherwise sell alcoholic beverages. The institutional investor, and the
officers, directors, substantial shareholders, partners, employees and agents
of the institutional investor, may not participate in management decisions
relating to the sale or purchase of alcoholic beverages made by a licensee in
which the institutional investor holds an interest.
(8) Notwithstanding ORS
471.394, a member of the board of directors of a parent company of a
corporation that is a manufacturer may serve on the board of directors of a
parent company of a corporation that is a retail licensee if:
(a) The manufacturer or
parent company of a manufacturer is listed on a national security exchange;
(b) All purchases of
alcoholic beverages by the retail licensee are made from holders of wholesale
malt beverage and wine licenses, brewery licenses or winery licenses in this
state;
(c) The interest of the
member of the board of directors does not result in the exclusion of any competitor’s
brand of alcoholic beverages on the licensed premises of the retail licensee;
and
(d) The sale of goods
and services other than alcoholic beverages by the retail licensee exceeds 50
percent of the gross receipts of the business conducted by the retail licensee
on the licensed premises.
SECTION 3. The amendments to ORS 471.230 and 471.396 by
sections 1 and 2 of this 2007 Act apply to all distillery licenses, whether
issued before, on or after the effective date of this 2007 Act.
SECTION 4. ORS 471.200 is amended to read:
471.200. (1) A brewery-public house license allows the licensee:
(a) To manufacture on
the licensed premises, store, transport, sell to wholesale malt beverage and
wine licensees of the Oregon Liquor Control Commission and export malt
beverages;
(b) To sell malt
beverages manufactured on or off the licensed premises at retail for
consumption on or off the premises;
(c) To sell malt
beverages in brewery-sealed packages at retail directly to the consumer for
consumption off the premises;
(d) To sell on the
licensed premises at retail malt beverages manufactured on or off the licensed
premises in unpasteurized or pasteurized form directly to the consumer for
consumption off the premises, delivery of which may be made in a securely
covered container supplied by the consumer;
(e) To sell wine and
cider at retail for consumption on or off the premises; and
(f) To conduct the
activities described in paragraphs (b) to (e) of this subsection at one
location other than the premises where the manufacturing occurs.
(2) In addition to the
privileges specified in subsection (1) of this section, in any calendar year a
brewery-public house licensee may sell at wholesale to licensees of the
commission malt beverages produced by the brewery-public house licensee if the
brewery-public house licensee produced 1,000 barrels or less of malt beverages
in the immediately preceding calendar year.
(3) A brewery-public
house licensee, or any person having an interest in the licensee, is a retail
licensee for the purposes of ORS 471.394 and, except as otherwise provided by
this section and ORS 471.396, may not acquire or hold any right, title, lien,
claim or other interest, financial or otherwise, in, upon or to the premises,
equipment, business or merchandise of any manufacturer or wholesaler, as
defined in ORS 471.392. A brewery-public house licensee, or any person having
an interest in the licensee, is also a manufacturer for the purposes of ORS
471.398 and, except as otherwise provided by this section and ORS 471.400, may
not acquire or hold any right, title, lien, claim or other interest, financial
or otherwise, in, upon or to the premises, equipment, business or merchandise
of any other retail licensee, as defined in ORS 471.392.
(4) A brewery-public
house licensee, or any person having an interest in the licensee, is a retail
licensee for the purposes of ORS 471.398 and, except as otherwise provided by
this section and ORS 471.400, may not accept directly or indirectly any
financial assistance described in ORS 471.398 from any manufacturer or
wholesaler, as defined in ORS 471.392. A brewery-public house licensee, or any
person having an interest in the licensee, is also a manufacturer for the
purposes of ORS 471.398 and, except as otherwise provided by this section and
ORS 471.400, may not provide directly or indirectly any financial assistance
described in ORS 471.398 to any retail licensee, as defined in ORS 471.392. The
prohibitions on financial assistance in ORS 471.398 do not apply to financial
assistance between manufacturing and retail businesses licensed to the same
person under the provisions of this section.
(5) Notwithstanding
subsection (3) of this section, a brewery-public house licensee, or any person
having an interest in the licensee, may also hold a
winery license authorized by ORS 471.223. A brewery-public house licensee, or
any person having an interest in the licensee, may also hold a warehouse
license authorized by ORS 471.242.
(6) Notwithstanding
subsection (3) of this section, a brewery-public house licensee is eligible for
limited on-premises sales licenses and temporary sales licenses.
(7)(a) Notwithstanding
subsection (3) of this section, and except as provided in this subsection, a
brewery-public house licensee, or any person having an interest in the
licensee, may also hold a full on-premises sales
license. If a person holds both a brewery-public house license and a full
on-premises sales license, nothing in this chapter shall prevent the sale by
the licensee of both distilled liquor and malt beverages manufactured under the
brewery-public house license.
(b) The commission may
not issue a full on-premises sales license to a brewery-public house licensee
under the provisions of this subsection if the brewery-public house licensee,
or any person having an interest in the licensee or exercising control over the
licensee, is a brewery that brews more than 200,000 barrels of malt beverages
annually or a winery that produces more than 200,000 gallons of wine annually.
[(c) The commission may not issue a full on-premises sales license to a
brewery-public house licensee under the provisions of this subsection if the
brewery-public house licensee, or any person having an interest in the licensee
or exercising control over the licensee, is a distillery, unless the distillery
produces only pot distilled liquor and produces no more than 12,000 gallons of
pot distilled liquor annually.]
(8) Notwithstanding any
other provision of this chapter, a brewery-public house licensee, or any person
having an interest in the licensee, may also hold a distillery license [if the licensee produces only pot distilled
liquor, and produces no more than 12,000 gallons of pot distilled liquor
annually]. No provision of this chapter prevents a brewery-public house
licensee from becoming a retail sales agent of the commission for the purpose
of selling distilled liquors.
(9) Notwithstanding
subsection (3) of this section, the commission by rule may authorize a
brewery-public house licensee to coproduce special events with other
manufacturers.
(10)(a) Notwithstanding
subsection (3) of this section, a brewery-public house licensee may hold,
directly or indirectly, an interest in a manufacturer or wholesaler, provided
that the interest does not result in exercise of control over, or participation
in the management of, the manufacturer’s or wholesaler’s business or business
decisions and does not result in exclusion of any competitor’s brand of
alcoholic liquor.
(b) Notwithstanding
subsection (3) of this section, a manufacturer or wholesaler, and any officer,
director or substantial stockholder of any corporate manufacturer or
wholesaler, may hold, directly or indirectly, an interest in a brewery-public
house licensee, provided that the interest does not result in exercise of
control over, or participation in the management of, the licensee’s business or
business decisions and does not result in exclusion of any competitor’s brand
of alcoholic liquor.
(11) For purposes of ORS
chapter 473, a brewery-public house licensee shall be considered to be a
manufacturer.
Approved by the Governor May 15, 2007
Filed in the office of Secretary of State May 15, 2007
Effective date January 1, 2008
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