The Philly Beer Raids, Part Deux…

With news that agents of the Pennsylvania State Police have visited/raided a local Philly distributor, Origlio (named 2009 Craft Beer Distributor of the Year by the Brewers Association, by the way), I finally looked at the governing laws for this growing fiasco. For starters, if you are a distributor or a brewer who works in the Philadelphia area, or frankly, anywhere in the state, you might want to have a gander at the Pennsylvania Liquor Control Board’s website. Say what you will about the agency’s involvement in the recent news, it offers a pretty detailed and accessible site for those it regulates. For starters, here’s the language at issue with the registration of beer brands:

SECTION 4-445. Brand registration

No brand or brands of malt or brewed beverages shall be offered, sold or delivered to any trade buyer within this Commonwealth unless the manufacturer thereof shall first submit an application in the form and manner prescribed by the board for the registration of the said brand or brands of malt beverages, together with an annual filing fee not to exceed twenty-five dollars ($ 25) for each brand registration requested. In the event an out-of-State or foreign manufacturer of malt or brewed beverages has granted franchise rights to any person for the sale and distribution of its brand products but which person is not licensed to sell and distribute the same in this Commonwealth, said such person shall nevertheless be required to register the involved brand before offering the same for sale in Pennsylvania. It is further conditioned that the person holding such franchise rights shall, together with its application for brand registration, file with the board copies of all agreements between it and the Pennsylvania importing distributor appointed by such person to sell and distribute the brands of malt or brewed beverages as provided by sections 431 and 492. Such agreement shall contain the manufacturer’s consent and approval to the appointment of the Pennsylvania importing distributor and the rights conferred thereunder.

And here is the required paperwork at issue, the Application for Malt or Brewed Beverage Brand Registration. The simple 1-2 page form should be filled out by the brewer in conjunction with the distributor (or better yet, by the distributor who likely has greater administrative resources).

In filling out the form, the brewer or distributor agrees, under signed affirmation, to keep the PLCB informed of brand changes and additions and to otherwise follow the state’s liquor code.

And while the retailer might have its stock confiscated for selling unregistered brands, the distributor is the one that should really be sweating in these cases as the penalties, adjudged through an administrative law process, for failing to get its brands registered could be a fine or suspension and revocation of its distribution license.

And, of course, the Board handily posts its daily list of registered brands in the state for all (retailers, distributors, brewers, and the public) to see. Of the 2856 brands registered ($214,200 in registration fees), there are inevitably going to be some mistakes. And now distributors are going to be sure and get them fixed as Pennsylvania appears to take a strict liability approach to violations. The penalty for failing to do so is just too high.

And by way of note, good for the PLCB in putting its administrative law decisions on-line. If you want to see how one of these cases pans out in the legal process, as this one likely will against the retailers and distributors involved in this case, check out this short decision.

On a lighter note, a quick perusal of this list turned up some notes of interest. My old favorite subject, the Old Dominion Brewing Company, ye of troubling history, has several brands represented in the state. And they are registered by…Anheuser-Busch, even though they are produced by Coastal, a joint venture with another craft brewery. Unless there has been a fundamental change in ownership in the last year that I have somehow missed, I wonder if the registration for these brands follows the letter of the law for identifying the producer.

-The above information does not constitute legal advice. If you have questions regarding the application and nature of the Pennsylvania Liquor Code, please contact an attorney.

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