By DAVID RABER
Lumpe, Raber & Evans
A free market in alcoholic beverages has never existed in American history.
A 1970 U.S. Supreme Court decision noted that, in 1660, “the precursor of modern-day liquor legislation was enacted in England, which allowed commissioners to enter, on demand, brewing houses at all times for inspection. Massachusetts passed a similar law in 1692.” Before Prohibition, there was no orderly marketing of alcoholic beverage distribution. When the 21st Amendment ended Prohibition in 1933, all states were authorized to strictly regulate the transportation, importation and use of alcohol within their borders.
Ohio Alcohol Laws
All states have a system of regulations governing the sale of alcoholic beverages. In Ohio, the state government holds a public monopoly and public ownership of a portion of the alcoholic beverage supply chain, namely “spirituous liquor” (all intoxicating liquor over 42 proof or containing 21 percent or more alcohol by volume).
All spirituous liquor or “spirit” sales in Ohio occur at private “agencies,” or stores that sell liquor. Spirit profits are the funding source for economic development in Ohio through JobsOhio, a private nonprofit corporation.
However, Ohio does not own any aspect of the alcoholic beverage supply chain for beer and wine. The license system for beer and wine is considered a “private” system because the Ohio Department of Commerce, Division of Liquor Control licenses private vendors to operate wholesale or retail systems of distribution of beer and wine and on-premises consumption of spirituous liquor by the individual drink.
Ohio’s most important focus (and the focus of most states) is the “three-tier system” for regulation of beer and wine distribution. This system reflects the three-tiers of manufacturers, wholesale distributors and retailers that exists in all states and outlines the way in which alcoholic beverages must make their way to consumers. This allows the state to prevent undue economic pressures among the entities involved and to regulate the manufacture, distribution and retail sale of alcoholic beverages. The system was designed to prevent the pressures and corruption that resulted from manufacturers owning retail businesses in an earlier era. Beer and wine must pass through all three tiers before reaching the consumer, and the state has the power to regulate all three tiers.
Buying Alcohol Online
Ohio prohibits ordering spirits online. To purchase a bottle of bourbon, for example, you must physically go to an Ohio state agency store. If you are an Ohio resident and are at least 21 years old, Ohio law allows you to bring no more than one liter of spirits into this state for personal use (not for resale). As an Ohio resident, you may order beer and wine over the internet, but only from the winery or brewery that produces the product. Properly-licensed Ohio retailers may deliver beer and wine to persons over 21 years of age who have placed an order over the internet, by phone or through an app.
If you own a winery or brewery outside of Ohio, and want to ship to Ohio customers online, you can lawfully ship beer or wine if you have applied for and received a class “S” permit from the Ohio Division of Liquor Control. That is, assuming you comply with all Ohio laws, including payment of Ohio taxes, quantity limitations and no sales to any person under the age of 21.
Ohio prohibits all alcohol license-holders from giving away any alcohol in connection with a licensed business. For example, when the Cleveland Cavaliers won the NBA Championship, no bar in Ohio could celebrate by saying, “Drinks on the house!” However, if a bar patron says, “A round of drinks on me,” the bar is allowed to charge only that patron for each drink served for that round.
Ohioans should also be careful about alcohol at public tailgating events. Ohio law prohibits alcohol consumption in “places of public accommodation.” For example, a parking lot is considered a “place of public accommodation” because it is open to any member of the public, so tailgate parties taking place in a parking lot cannot include open containers of alcohol. The same can be said for walking down a sidewalk with an open drink. However, if a previously public area such as a parking lot or a city block is cordoned off and restricted to invited guests only, it becomes a private place. In that case, possession of an open container would be permissible for the private affair.
How an Attorney Can Help
The alcohol distribution system is set up to incentivize citizens to obtain permits while using fines, suspensions and revocations of permits as a disincentive from conduct which is not in accordance with the law. Liquor is a highly regulated industry and it certainly helps to have an attorney to assist in familiarizing yourself with what the law allows and requires.
David A Raber is a partner of the Law Offices of Lumpe, Raber & Evans, where his legal experience includes a legal extern for U.S. District Judge Alvin I. Krenzler and an associate attorney with the Ohio Attorney General’s Office. Mr. Raber is currently General Counsel for the Wholesale Beer & Wine Association of Ohio and Chair of the Advisory Council of the Wine & Spirits Wholesalers of America. Articles appearing in this column are intended to provide broad, general information about the law. This article is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney.