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Alcoholic beverages are the most heavily regulated consumer product in the United States.  Following the repeal of Prohibition, Kentucky, like most other states, enacted laws regulating the production, wholesale/distribution, and sale of alcoholic beverages in an effect to combat the abuses and excesses that gave rise to Prohibition in the first place.  This system is known as the “three-tier system,” which means that different sets of laws govern producers of alcoholic beverages, another set of laws govern distributors or wholesalers of alcoholic beverages, and a third set of laws governs retailers.  Under the three-tier system, producers can only sell to wholesalers/distributors; wholesalers/distributors can only sell to retailers; and retailers can only sell to consumers. 

At the state level, in Kentucky, the alcoholic beverages laws are administered by the Department of Alcoholic Beverage Control (ABC).  Before obtaining a license from the ABC Board, applicants must also comply with any local requirements set forth by ordinance.  Additionally, there are federal laws and regulations governing the manufacture, distribution, and sale of alcoholic beverages. This system of alcohol regulations that was enacted in the late 1930s remains the core of the law to this day.  Changes to the alcohol control scheme have been incremental and sometimes contradictory, resulting in a confusing and labyrinthine patchwork of laws and regulations.  Even with recent efforts to update and simplify the law, Kentucky still provides for over 40 different types of alcohol beverage licenses.  The provision for “local option,” which gives local governments to decide whether to allow alcohol sales and upon what conditions further complicates a system that has been described by the Supreme Court of Kentucky as “a maze of obscure statutory language” and “confusing at best.”

In addition to the specific requirements of each particular alcohol license, Kentucky law provides for the following general eligibility requirements:

1. Applicants for an alcohol license must be 21 years of aga or older;
2. Applicants cannot have been convicted of felony within the last 5 years;
3. Applicants cannot have been convicted of a drug-related misdemeanor within the last 2 years;
4. Applicants cannot have been convicted of an alcohol-related misdemeanor within the last 2 years;
5. Applicants cannot have had an alcohol license revoked for cause or for conviction of a liquor statute within the last 2 years.

6. Applicants must be citizens of the United States and have established a “bona fide” residence in Kentucky for at least 1 year prior to the application unless the applicant is seeking a license to manufacture alcohol or the applicant is a corporation authorized to conduct business in Kentucky or if the person was licensed on March 7, 1938.

Additionally, if the applicant is a business entity, the eligibility requirements apply to all business members, directors, principal officers, and managers. The law also forbids people to evade the eligibility requirements by seeking to obtain under a different person’s name. “The state administrators shall examine the ownership, membership, and management of all license applicants, and shall deny the application if a disqualified person has a direct or indirect interest in the applicant’s business.”  Further, if a retail license is sought, then the applicant must own the premises to be licensed or be in possession of the premises to be licensed under a written agreement for a term of not less than the period of the alcohol license.

If simply obtaining the appropriate license was not difficult enough, then there is the process of maintaining the license by operating your business in compliance with the various laws and regulations.  If your license is revoked, then, at a minimum you cannot apply for another license for at least 2 years.  Furthermore, violations and infractions may not only jeopardize your license, but may also even be considered a criminal offense under Kentucky law.  Some common violations include the following:

* Failure to properly post license and required notices

* Defacement of license

* Failure to properly transfer license

* Unauthorized operations under a held license

* Illegal sale to minors and intoxicated persons

* Allowing a licensed premises to become disorderly

* Improper solicitation of customers and other improper advertising

* Improper sales and distribution

* Improper employment of minors or certain convicted felons

* Failure to maintain proper business records

If you are interested in obtaining an alcohol license in Kentucky or if you have been charged with any violations of the law and regulations, it is important to have an attorney to help guide you through the process.  Failure to comply with the law may not only hurt your business, it may also be a crime.  There is too much at stake to handle everything on your own.  The attorneys at Ron Aslam Law Office have the knowledge and experience to help you negotiate the complex rules and processes of the alcohol licensing process here in Kentucky.  Our attorneys work hard to fight for your rights and to help you obtain the best results possible.  If you need help, call our Kentucky Administrative Law Attorneys at the Ron Aslam Law Office for a consultation today.

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