Alcoholic Beverages Division Overview and Alcohol Compliance

SPF SIG Webinar
February 21, 2012
Stephen Larson, Administrator
Terry E. Branstad, Governor
Kim Reynolds, LT. Governor
Topics of Discussion
 Brief overview of ABD
 Alcoholic Beverages Division (ABD) compliance
 Violations of Iowa Code chapter 123
 Reporting violations of Iowa Code chapter 123
to the ABD
 Helpful resources and tools to use for alcohol
 Contact Information
 Q&A
Three Tier System
 Iowa’s Alcoholic beverages industry operates under a
three-tier system: manufacturer to wholesaler to
retailer. It is then purchased by the customer. This
system maximizes revenue for state and local
programs while minimizing the cost of industry
regulation. All liquor, wine and beer purchases must
be made through the three-tier system.
Vintner • Brewer
Wine • Beer
What Does a Control State Mean?
 Iowa became a control state in 1934 when
prohibition ended. The Twenty-First amendment
gave states the authority to create new regulatory
and enforcement systems for the sale and
consumption of alcoholic beverages. The idea was to
balance people’s desire for legal alcohol sales with
the government’s interest in protecting public health
and safety. The Division is responsible for the
enforcement of state and federal laws and
regulations regarding the sale and use of alcohol and
tobacco products.
Map of Control States
 Class “E” Licensee - For grocery stores, liquor
stores, convenience stores, etc. Allows commercial
establishments to sell liquor for off-premises
consumption in original unopened containers
 Class “C” Liquor License - For taverns, bars,
restaurants, etc. Allows commercial establishments
to sell liquor, wine, beer and wine coolers for onpremises consumption. Also allows carry-out sales of
beer and wine coolers in original unopened
ABD Compliance Department Goals
 Provide a comprehensive compliance
program to enforce the liquor laws of Iowa
Code chapter 123 through education,
voluntary compliance, and punitive
 Open a two-way communication channel
with our partners to provide training,
resources, assistance, and education
regarding alcohol compliance.
How Does an Investigation Begin?
Complaints come through several avenues
 Complaint from public
 Law Enforcement Complaint to ABD
 Routine Compliance Checks
 Routine Audits
ABD Complaint to Law Enforcement
 Sample letter that
goes to local law
enforcement when
assistance on an
investigation is
Top Liquor Violations
Top three violations that are currently taking place in Iowa
 Infusing
 No records on licensed premises
 Keg registration violations
Reasons a Licensee can lose their liquor license
Delinquent Sales taxes
Deleted corporations with Iowa Secretary of State
No Dram shop insurance
Sale to Minor – multiple offenses
Misrepresentation on an application
Felony conviction of one of the owners
Imminent danger to public safety
Right to Enter Premises
 No licensee’s premises shall have interior access to
livings quarters without the living quarters
 As a condition of issuance of a liquor license or
beer or wine permit, the applicant must give
consent to enforcement officials to enter upon the
premises where alcoholic beverages are stored,
served, or sold without a warrant during normal
business hours of the licensee or permittee to
inspect for violations of Iowa Code chapter 123 or
ordinances and regulations that cities and boards
of supervisors may adopt.
Right to Enter Premises
 All persons who enter upon a licensed
premises to conduct an inspection shall
present appropriate identification to the
owner of the establishment or the person
who appears to be in charge of the
establishment prior to commencing an
inspection, however this provision does not
apply to undercover criminal investigations
conducted by peace officers.
Liquor License
Consumption, Off-Licensed Premises
person may not be intoxicated, or simulate
intoxication in a public place
o A person shall not use or consume spirits, wine,
or beer upon public streets or highways
o Beer and wine may be consumed or dispensed
in an unlicensed premises or other public place,
as long as a city ordinance does not prohibit
o A person shall not use or consume spirits in any
public place except a premises covered by a
liquor control license
Keep Record of Daily Gross Receipts
License/permit holders are required to keep the daily
gross receipts of their business
 alcohol purchase receipts and invoices
ABD recommends the retention of records for a
reasonable and customary time period (ABD has
advised our customers that 3 years would be
Use to confirm the licensee/permittee is following 3tier system
Keep Records
Records of beer purchases
Wholesalers required to keep records of the amount of beer sold and
to whom it was sold
o Retailers are required to keep records of beer purchases documenting
date, who it was purchased from, and the amount
Keg registration stickers required
Any retailer selling keg beer is required to purchase record booklets
and stickers from ABD and apply a keg identification sticker to every
keg sold to a consumer. They must also ensure the registration is
filled out correctly
 Name and address of purchaser
 Drivers license #, non operator’s id card #, or military id # (must
contain a picture and signature)
 Records kept for 90 days on the licensed premises
Illegal Purchase of Beer and Wine for Resale
123.142 & 123.181
 All retailers holding a liquor license/beer permit are
required to purchase their beer from an Iowa licensed
wholesaler (123.142)
Bars, restaurants, grocery stores, liquor stores, gas stations, etc.
 All retailers holding a wine permit are required to
purchase their wine from an Iowa licensed wholesaler
Exception: A Class “E” liquor license holder may sell one case of wine
per brand per day to retailers each day
• All retailers holding a class “E” liquor license must
purchase hard liquor from ABD. All retailers must
purchase hard liquor from a Class “E” liquor licensees.
After Hours Sales/Consumption
 After hours activities
o No alcohol can be sold, served, consumed, or given away after
o If the business offers other legal services, such as food, they
may stay open to provide those services
Spirits in Container Other Than Original
 Infusing is currently the hot trend
o Mixing spirits and other ingredients (fruits, vegetables, spices,
etc.) and letting them ferment for days to then be resold as a
flavored ‘infused’ product
 All spirits are required to remain in their original
Exception: Drinks made for immediate consumption
Examples: Bloody Mary, Margarita, etc.
Refilling Bottles
 Licensees/permittees are not allowed to do the
o Refill or marry bottles - pouring two bottles of
one product into the same bottle
o Adulterate, add substances, or change in anyway
the contents of the original package of spirits,
wine, or beer
o Can not have possession of any adulterated
substance or reused package.
Selling on Credit
 Alcohol can’t be sold on credit
o Customer may run a tab while at the establishment, but must
close and pay for the entire tab at the end of that business day,
or before leaving the premises
Officer may confiscate the tabs, or make copies of the
tabs for evidence. Officers will then file a report with
ABD for further review.
Employing a Person Under 18
 Must be 18 years of age or older to be a
bartender, server and ‘busboy’ of any
alcoholic beverages.
 Must be 16 years of age to sell alcoholic
beverages to-go (off-premises sales)
Allowing Persons to Bring Alcoholic Beverages Onto
Premises 123.49(2)(g)
Spirits can not be brought into a licensed
premises except by a licensee and their employees
and only products purchased from a Class “E”
• Beer and wine can be brought onto a licensed or
unlicensed premises with the permission of the
Alcohol Sold to Go
 Class “E” liquor license holders is the only
classification that can sell spirits to go.
 Class “C” liquor license holders selling alcohol by
the drink to consume on the premises, can not sell
spirits to go. Carryout beer is an automatic
privilege with this classification
• Wine may be sold to go with an additional privilege
added to the establishments license
Brand Name or Logo Advertising Outside Premises
 Spirits, beer, and wine brand/logo
advertising is allowed on the inside of the
 Inside the premises includes outdoor
services areas where advertisements are not
displayed to the public.
 Signage posted inside the premises that can
be seen through the window is allowable
• Selling alcohol without a license
• Expired license
• Selling/serving outdoors without outdoor
service area privilege
• Bringing spirits, wine, or beer across the
state border to sell in your licensed
Looking for Iowa refund stickers
Licensing Process
 Licensee completes an online application
 If applicable – Dram shop company validates
 Local authority approves or denies electronic
application after city council or board of supervisors
has approved or denied
 Iowa Alcoholic Beverages Division (ABD) approves
or denies license
What’s New in Alcohol Compliance
 New Legislation
Home delivery of alcoholic beverages by
o C-store licenses & Class “E” licensees with
separate liquor rooms
Home Delivery of Alcoholic Beverages by Retailers
 The following conditions must be met for home
delivery of alcoholic beverages:
Retailer must be licensed to sell for off premise consumption
The payment of the spirits, wine, or beer must take place on the
licensed premises at the time of the order
Alcohol delivered to a person must be for personal
consumption and not for resale
Deliveries shall be made to only persons 21 years of age or older
Deliveries shall not be made to people who are intoxicated
Delivery hours are 6am-10pm Monday-Saturday and 8am10pm Sunday
Deliveries must be made by the licensee or their employees, not
by a third party
Home Delivery of Alcoholic Beverages by Retailers
 Continued……
Deliveries shall be made in a vehicle owned, leased, or under
the control of the licensee/permitee
Delivery person must be 21 years of age or older
Valid proof of the recipient’s identity and age shall be verified
at the time of the delivery, and obtain a signature of the
Licensee/permitee shall maintain records of deliveries showing
the quantity delivered, recipients name and address, and the
signature of the recipient of the alcohol. The records shall be
maintained on the licensed premises for a 3 year period.
C-Store License and Class “E” license with
Separate Premises
 C-store license or convenience stores licensed to sell
New license will allow convenience stores and gas stations
to sell spirits without requiring a separate room
Spirits can be stored throughout the entire premises and
sold for consumption off the premises
 Class “E” liquor licenses at gas stations and
convenience stores with separate spirits room
Must have a “separate premises” or room bound on all four
sides from ceiling to floor with solid walls or windows
Must have a separate cash register
All spirits sales must take place in this room Homepage
Contact Information
For any questions on regulation please contact the licensing
department at 1-866-469-2223 option 1
Or email [email protected]
 Annie Adamovicz – Administrative Hearing Officer
[email protected]
 Karen Freund – Director of Regulatory Affairs
[email protected]
Contact Information
 Shannon Pogones- Education Outreach Coordinator
[email protected]
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