Whether a business is a package store, a restaurant, a brewery, hotel, or other establishment, it must have a liquor license in order to legally serve or sell alcohol. Liquor licenses can be complicated because there are many state and federal laws that the business must comply with to obtain and keep a license. The major laws that affect stores and restaurants are that they cannot sell liquor at unreasonably low and competitive prices and they cannot sell liquor to minors. These violations unfortunately lead many businesses to lose their liquor licenses and it greatly affects their business and income.
Regulations for Liquor Licenses
In Connecticut, the Liquor Control Commissioner regulates liquor licensing permits and is responsible for receiving complaints from patrons and other people regarding an establishment that holds a liquor license. When there is an alleged violation at an establishment, the Commissioner has the authority to investigate, hold pre-hearings, compliance meetings, and formal administrative hearings.
The major violation for liquor establishments is violations of the Liquor Control Act. The Liquor Control Act is majorly concerned with prices and regulations that have a big impact on pricing. The Liquor Control Act (LCA) tries to prevent establishments from selling liquor in a market that is competitive and have an unfair advantage.
There is a three-tier system that the LCA creates which is manufacturers, wholesalers, and retailers. Each category has different regulations that it must follow in order to be in compliance. One of the major regulations in the LCA that applies to all liquor licenses is that establishments cannot sell alcohol in a way that is competitive or use unfair pricing.
License Suspensions and Revocation
The Department of Consumer Protection (DCP), which is the agency responsible for granting, denying, and taking away liquor licenses, can revoke or suspend a liquor license for using unfair pricing practices. A major unfair pricing practice that could result in a license loss is reducing prices of the liquor below the minimum base cost. This violation is more common for retailers. An unfair pricing practice that affects wholesalers is selling liquor to retailers at different prices. These violations could result in a notice from the DCP and after the opportunity for a hearing, the DCP can suspend or revoke the license for this.
Another common violation of the LCA is selling liquor to either minors, which is anyone younger than 21 years old, or to habitual drunkards. The law prohibits any liquor establishment to sell liquor to minors and there are severe penalties that encourage retailers and businesses to check identification before selling to people. Many establishments have created internal regulations that require their employees to check age identification for all people or face internal discipline within the business. Other businesses do not have this structure, and therefore, leave themselves more susceptible to violating the LCA. The disciplinary action for selling to minors, even if accidental, is a fine of up to $1,000, one year in prison, or both.
Facing an Allegation
If the Liquor Control Commissioner has received an allegation or a complaint about a retailer, manufacturer, or wholesaler that sells liquor, it can open an investigation into that business and after giving the opportunity for a hearing, suspend or revoke the business’ license. The Department of Consumer Protection is responsible for carrying out the disciplinary action of suspending or revoking a license.
The state of Connecticut takes violations of the LCA and other laws on liquor sales very seriously, so it can be difficult to fight against allegations that could result in a loss of license. If you are in the business of selling liquor and fear that your license is at risk, contact our office to speak with an experienced attorney who can counsel you through informal meetings, compliance meetings, preparing for hearings, and getting through a formal hearing.