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FL Breweries & Distilleries: Be Wary of Home Delivery Service Apps

The terms and conditions for popular food and alcohol delivery service apps may be incompatible with the Florida Beverage Law’s prohibition on alcohol home delivery by breweries and craft distilleries. Florida Breweries and Craft Distilleries are Prohibited from Making Deliveries to Customers The Florida Beverage Law (specifically Florida Statutes Section 561.57(1)) generally allows licensed alcohol vendors to accept remote orders from retail customers and deliver the ordered products to the customers. These permitted deliveries can be made either in vehicles owned or leased by the vendor or by third party delivery providers under contract with the vendor. This is what allows customers in Florida to order beer, wine, or liquor from a grocery store, alcohol package store, or most other licensed vendors and get delivery at home. Not so for Florida breweries and craft distilleries, however. The Florida Beverage Law specifically prohibits brewery taprooms and craft distilleries to make deliveries away from their taprooms or gift shops. Regarding craft breweries, the Florida Beverage Law provides: A manufacturer possessing a vendor’s license under this subsection is not permitted to make deliveries under s. 561.57(1). Florida Statutes Section 561.221(2)(d) (2021). Florida Statutes Section 561.221(2) specifically authorizes breweries to have licensed taprooms, but subsection (d) provides that these taprooms are not allowed to make deliveries according Section 561.57(1). Craft distilleries are also specifically prohibited from making deliveries away from their gift shops: A craft distillery may not ship or arrange to ship any of its branded products or any other alcoholic beverages to consumers and may sell and deliver only to consumers within the state in a face-to-face transaction at the distillery property. Florida Statutes Section 565.03(2)(f)3. (2021). When it comes to delivery services, here is the key question: Does the delivery service app rely on delivery providers that are the agent of the seller or the customer? If the app relies on delivery providers that are the agents of the seller, then the Florida Beverage Laws clearly prohibit breweries and craft distilleries to make sales through those services. On the other hand, if the app’s delivery providers are the agents of the the customer or the app itself, then breweries and craft distilleries can make sale through those services. The big problem? Delivery service apps don’t always make clear the role of the delivery provider–as agent of the seller or the customer. Following is a brief review of the terms and conditions (as of November 2021) of 6 popular food and alcohol delivery service apps, to get at this question of agency. Grubhub – Probably Agent of the Seller Grubhub’s terms of service do not clearly define the role of the delivery provider. However, the terms suggest that it is more likely the case that the delivery provider is the seller’s agent. Grubhub is a virtual marketplace Platform that connects hungry diners with third-party service providers, including local restaurants and independent delivery service providers. You may order food through the Platform to be delivered from particular restaurants, including their authorized licensees and franchisees, or other purveyors of food in cities throughout the United States and other territories where Grubhub provides such Services (collectively, the “Restaurants”). Grubhub is not a delivery company or a common carrier. Some deliveries are provided by Grubhub’s network of independent delivery service providers (“Delivery Partners”). Delivery Partners have entered into agreements with Grubhub which require them to comply with all applicable federal, state, and local laws, rules and regulations, including, without limitation, traffic laws, requirements of the applicable motor vehicle agency, and applicable insurance requirements. By accessing the Platform, you agree and acknowledge that Delivery Partners are solely responsible for, and Grubhub shall not be liable or responsible for, the delivery services provided to you by any Delivery Partner or any subcontractors of Delivery Partners, or any acts, omissions, errors or misrepresentations made by any Delivery Partner. https://www.grubhub.com/legal/terms-of-use (emphasis added) While it’s clear that the Delivery Partners are not Grubhub’s agent, it is not clear whether they are the agents of the sellers or the customers. However, the terms indicate that the orders are “delivered from particular restaurants,” suggesting that the delivery process starts with the seller nor the customer. This leans in favor of concluding that the Delivery Partner is the seller’s agent, in which case Florida breweries and craft distilleries may be prohibited from using them. Uber Eats – Agent of the Seller Things are a bit clearer for Uber Eats, but not in a manner that favors their use by breweries and craft distilleries. For the avoidance of doubt, (i) [Uber] is an unlicensed entity that facilitates the promotion, marketing, and/or sale of Alcohol Items by third parties via the App(s); and (ii) Merchant is a licensed seller of alcoholic beverages that wishes to sell Alcohol Items via the App(s). Orders for Alcohol Items solicited via the App(s) will be transmitted to Merchant. Merchant is responsible for, will be clearly identified during, and shall control the sale of any orders for Alcohol Items, including any decisions regarding accepting, fulfilling, and rejecting orders for Alcohol Items. Each Delivery Person shall deliver Alcohol Items under and pursuant to Merchant’s Required Licenses and, as necessary, as Merchant’s third-party beneficiary. https://www.uber.com/legal/en/document/?name=uber-eats-merchant-alcohol-terms-of-use&country=united-states&lang=en (emphasis added) In this case, it’s more clear that (a) the Uber Eat app is a tool for sales by the seller, and (b) the Delivery Person is acting for an on behalf of the seller. That means that the Florida Beverage Laws most likely prohibit breweries’ and craft distilleries’ sales through Uber Eats. Instacart – Agent of the Customer Unlike Grubhub and Uber Eats, Instacart’s terms point toward the conclusion that the delivery provider is the agent of the customer, not the seller. When you use the Services to place an order for goods, you authorize the purchase of those goods from the Retailers you select and, if you have selected delivery services, the delivery of those goods by Third Party Providers. Unless otherwise specified, you acknowledge and agree that Instacart and the Third Party Provider are collectively acting […]

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How Florida Beverage Laws Affect Fortified Wine

Fortified Wine – What Is It? “Fortified wine” generally refers to any wine to which a distilled spirit has been added. Common examples of fortified wine include port, sherry, madeira, and vermouth. The most common fortifying ingredient is brandy, a liquor produced by distilling wine. Not surprisingly, Florida law (and indirectly federal law) does a fine job of handling brandy-fortified grape wine, but questions remaining concerning more exotic varieties: Will adding a fortifying spirit make the product no longer wine? Put another way, how can wine be fortified and still be considered wine? The Florida Statutes define fortified wine as all wines containing more than 17.259% alcohol by volume (ABV). See Fla. Stat. s. 564.01. “Wine”, in the same statute, is defined as all beverages made from fresh fruits, berries, or grapes, either by natural fermentation or by natural fermentation with brandy added, “in the manner required by the laws and regulations of the United States.” The statute also includes in the category of wine “sake, vermouths, and like products.” The Florida Division of Alcoholic Beverages and Tobacco (ABT) has confirmed that cider and mead are both considered wine under Florida law. See ABT Informational Bulletin 2016-001. So, can sake, cider, and mead by fortified, and will it still be considered as wine under Florida law? Fortified Wine Must be Fortified from the Same Base Ingredient To be considered wine (and not a distilled spirit product) for federal and state legal purposes, fortified wine must be fortified only with “brandy or wine spirits” made from the same fruit as the wine and the fortified wine must not exceed 24% ABV. See 26 U.S.C. sec. 5373. For instance, grape wine may only be fortified by brandy. Accordingly, fortified cider will still be considered wine only if it is made by adding apple brandy or applejack to cider. Fortified mead may only be made by adding to mead a distillation of mead or “honey jack.” However, a 1977 ATF ruling clarified that imported fortified wine can be made from other sources of alcohol “provided the use of alcohol is regarded as an authorized fortification procedure and as a standard winemaking process in the country of origin and further provided that the alcohol content is not increased to more than 24 percent by volume.” See ATF Ruling 77-33. Excise Taxes and License Implications for Fortified Wine In Florida, adding any other distilled product to wine means that the product can no longer be considered wine. This has implication for the applicable excise tax rates (both federal and state), the labeling requirements for the product, and the licenses required to make, distributor, and sell at retail the distilled spirit product. The federal excise tax rate on fortified wine ranges from $1.07 to $3.15 per gallon, depending on the alcohol content. The Florida excise tax rate on fortified wine is $3.00 per gallon, whereas the Florida excuse tax rate for non-fortified wine is $2.50 per gallon. (Tax rates current as of November 2021.) Florida wineries (holding an AMW license ) are permitted to make fortified wines. The ABT’s approved wine manufacturing report does require the manufacturer to report all fortified wine made or received from other wineries. However, federal and Florida require require a distillery license to make brandy or other wine spirits. Federal law expressly allows wineries to obtain wine spirits from a distilled spirits plant (without payment of excise taxes). Presumably, Florida law also allows Florida wineries to obtain wine spirits for this purpose (how else would it make fortified wine), but the Florida Beverage Laws and regulations do not state this expressly. Fortified wine may be distributed by licensed Florida distributors holding a JDBW license, and they may be sold at retail by vendors holding a 2APS/2COP or higher vendor license. Do you have any questions about making, distributing or selling fortified wine in Florida? Contact us at contact@brewerlong.com to schedule a consultation with a beverage attorney. Because we’re attorneys: Disclaimer. Yoast SEO

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