HB1712 (2018) Detail

Relative to New Hampshire local liquor manufacturers.


HB 1712-FN - AS INTRODUCED

 

 

2018 SESSION

18-2358

08/03

 

HOUSE BILL 1712-FN

 

AN ACT relative to New Hampshire local liquor manufacturers.

 

SPONSORS: Rep. Pearl, Merr. 26; Rep. Ellis, Straf. 8; Rep. M. Moffett, Merr. 9; Rep. Lang, Belk. 4; Rep. Hill, Merr. 3; Rep. H. Moffett, Merr. 9; Rep. Scully, Hills. 33; Sen. Reagan, Dist 17

 

COMMITTEE: Commerce and Consumer Affairs

 

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ANALYSIS

 

This bill creates a license for and regulates local liquor manufacturers.

 

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

18-2358

08/03

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Eighteen

 

AN ACT relative to New Hampshire local liquor manufacturers.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  New Section; Local Liquor Manufacturer License.  Amend RSA 178 by inserting after section 6 the following new section:

178:6-a  Local Liquor Manufacturer License.

I.  In this section "local product" means the liquor produced by a local liquor manufacturer.  

II.  A local liquor manufacturer licensee shall:

(a)  Ferment and distill liquor from raw materials, and may blend, age, and bottle those liquors or wine produced at the licensed premises in this state.

(b)  Annually certify to the commission that he or she expects to have total gross annual sales in the licensed coming year of 20,000 or fewer 9-liter cases or equivalent.

(c)  Use 45 percent or more raw material produced in New Hampshire, to be measured by weight, exclusive of water and yeast.

(d)  Print "New Hampshire Local" on the label of all local product.

III.  A local liquor manufacturer may:

(a)  Sell the liquor it manufactures to the commission for resale in this state and transfer the liquor it manufactures to other licensed rectifiers, wine manufacturers, and liquor manufacturers.

(b)  Sell local product via Internet, telephone, or mail order sales so long as he or she uses a licensed carrier for out-of-state shipping.  In-state shipping for such orders shall be by licensed carrier or by the licensee.  The local liquor manufacturer shall report all Internet, telephone, and mail order sales to the commission.

(c)  Sell local product to on-premises licensees so long as he or she reports such sales to the commission.

IV.  No liquor manufactured, blended, or bottled in this state by any local manufacturer shall be sold or delivered in this state in any manner which is inconsistent with the provisions of this title.

V.  Each local liquor manufacturer shall have the right to sell at retail at its licensed manufacturing facility no more than the equivalent of 3,000 9-liter cases for off-premises consumption any of its liquor.  Each retail sale shall be limited to one 9-liter case or less per sale.  No local liquor manufacturer shall sell more than 12 9-liter cases of liquor to any one retail customer in any calendar year.

VI.  A local liquor manufacturer may provide to visitors of legal drinking age at its facility samples of liquor manufactured on the premises for tasting.  Samples may be provided either free or for a fee and shall be limited to one 1/2-ounce sample per label per person.  Samples sold under this section shall be subject to fees as established in paragraph VII.

VII.  Each local liquor manufacturer shall maintain records and prepare reports for the commission which shall indicate the sales made under paragraphs III, IV, and XII and samples distributed under paragraph X and shall pay to the commission monthly a fee equal to 4 percent of such sales or 4 percent of the retail value of such samples on or before the tenth day of the month following the sale or the sample distribution.

VIII.  The commission shall adopt rules, pursuant to RSA 541-A, relative to reports of local liquor manufacturers under paragraph VII.

IX.  Each local liquor manufacturer shall have the right to transport the local product it manufactures, blends, or bottles in bottles or other closed containers to the state border for transportation and sale outside the state to holders of a United States basic permit issued under the Federal Alcohol Administration Act.

X.  Each local liquor manufacturer selling no more than the equivalent of 3,000 9-liter cases of liquor per year at its licensed manufacturing facility shall have the right to distribute samples directly to on-premises and agency store licensees for tasting on the licensed premises in accordance with RSA 179:44.

XI.  The holder of a local liquor manufacturer license may be issued one on-premises license for the manufacturer's premises, providing all requirements of the license are fulfilled.

XII.  A local liquor manufacturer may transport its local product to a farmers' market, and may sell such products at retail in the original container.  A local liquor manufacturer may provide to visitors of these markets of legal drinking age samples of liquor manufactured by the licensee for tasting.  Samples may be provided either free or for a fee and shall be limited to one 1/2-ounce sample per label per person per day.  Samples sold under this section shall be subject to fees as established in paragraph VII.

2  Free Drinks; Local Liquor Manufacturers.  Amend RSA 179:44, III to read as follows:

III.  Liquor, beverage, or wine samples shall be consumed on the premises, and, except for wine samples provided by wine manufacturers and liquor samples provided by liquor manufacturers in accordance with RSA 178:6, IX, local liquor manufacturers in accordance with RSA 178:6-a, X, and rectifiers in accordance with RSA 178:7, V, liquor or wine for this purpose shall be purchased from the commission under conditions prescribed by this title.  Beverage samples for a tasting shall only be obtained as prescribed by this title.

3  Advertising Restrictions.  Amend RSA 179:31, II(a)(1) to read as follows:

(1)  All liquor or wine for this purpose shall be purchased from the commission, except as provided in RSA 178:6, VI, RSA 178:6, IX, RSA 178:6-a, VII, RSA 178:6-a, X, RSA 178:7, V, and RSA 178:7, VI.  The cost shall be no more than the commission's original cost paid by the commission plus 8 percent.

4  Rulemaking; Fees.  Amend RSA 176:14, VIII(g) to read as follows:

(g)  Collection of additional fees required under RSA 178:6, VI, RSA 178:6-a, VII, RSA 178:8, IV, and RSA 178:26.

5  New Subparagraph; Local Liquor Manufacturer License; Fee.  Amend RSA 178:29, V by inserting after subparagraph (e) the following new subparagraph:

(f)  Local liquor manufacturers, $500.

6  Effective Date.  This act shall take effect 60 days after its passage.

 

LBAO

18-2358

11/15/17

 

HB 1712-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to New Hampshire local liquor manufacturers.

 

FISCAL IMPACT:      [ X ] State              [    ] County               [    ] Local              [    ] None

 

 

 

Estimated Increase / (Decrease)

STATE:

FY 2019

FY 2020

FY 2021

FY 2022

   Appropriation

$0

$0

$0

$0

   Revenue

Indeterminable Decrease

Indeterminable Decrease

Indeterminable Decrease

Indeterminable Decrease

   Expenditures

$0

$0

$0

$0

Funding Source:

  [ X ] General            [    ] Education            [    ] Highway           [ X ] Other - Liquor

 

 

 

 

 

METHODOLOGY:

The New Hampshire Liquor Commission assumes this bill would create private liquor stores and allow spirit manufacturers to move into the state and sell to the public from their premises in competition with the Liquor Commission.  Eleven New Hampshire liquor manufactures are currently licensed by the Commission, and under the proposed legislation, all would qualify for the new Local Manufacturer License since they produce fewer than 20,000 9-liter cases.  These manufacturers would be able to sell up to 3,000 9-liter cases of spirits per year for off-premise consumption.  

 

The Commission offers the following information:

  • Each manufacturer currently pays $1,692 for their annual license and under this bill they would pay $500 which would decrease license fee revenue by $13,112 ($1,692 - $500 x 11 manufacturers)
  • In FY 2017 manufacturers reported $796,458 in on premise retail sales and paid $63,717 (8%) to the State.  Under this bill manufacturers would pay 4% resulting in a decrease of $31,858.
  • Because the manufacturers would be permitted to sell directly to on-premise licensees, the Commission would earn only 4% on those sales where it currently receives 23% gross profit.
  • The bill would allow spirit products to be sold directly to consumers and the State would lose the 47.5% to 50% markup per bottle on these sales.  The average gross profit currently realized by the Commission is $6.53 per bottle.
  • In a recent 12-month period New Hampshire liquor manufacturers sold 61,896 bottles through state liquor stores and 12,304 through on-premise licensees and agency stores.  The Commission assumes, since manufacturers would make a higher profit selling at their facilities, manufacturers would make every effort to sell more themselves and less through the Commission and its licensees.

 

Based on the information above, the Commission assumes license fee revenue would decrease by $44,970 per year.  The Commission has no way to estimate how many bottles of NH spirits would be sold directly.  If one third of the products sold through the Commission or its licensees in the past 12 months were sold directly the decrease in gross profit would be $206,000 per year.  

 

AGENCIES CONTACTED:

New Hampshire Liqour Commission

 

Links

HB1712 at GenCourtMobile

Action Dates

Date Body Type
Jan. 10, 2018 House Hearing
Feb. 20, 2018 House Exec Session
House Floor Vote
March 6, 2018 House Floor Vote

Bill Text Revisions

HB1712 Revision: 2337 Date: Nov. 16, 2017, 12:15 p.m.

Docket


March 6, 2018: Inexpedient to Legislate: MA VV 03/06/2018 HJ 6 P. 17


: Committee Report: Inexpedient to Legislate (Vote 17-3; CC)


March 6, 2018: Committee Report: Inexpedient to Legislate for 03/06/2018 (Vote 17-3; CC) HC 9 P. 10


Feb. 20, 2018: Executive Session: 02/20/2018 LOB 302


Feb. 20, 2018: Subcommittee Work Session: 02/20/2018 09:00 AM LOB 302


Jan. 30, 2018: Subcommittee Work Session: 01/30/2018 10:15 AM LOB 302


Jan. 23, 2018: Subcommittee Work Session: 01/23/2018 11:35 AM LOB 302


Jan. 10, 2018: Public Hearing: 01/10/2018 10:30 AM LOB 302


Jan. 3, 2018: Introduced 01/03/2018 and referred to Commerce and Consumer Affairs HJ 1 P. 20