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“Specialty Beverages” Pair Well With New Legislation

New Hampshire beverage manufacturers and distributors who are not yet tapped into recent legislative changes to licensing, operational definitions, and transportation restrictions should familiarize themselves with HB 1039.

To update our report on HB 1039 from this past April , this law, which was designed to ease restrictions on manufacturing and production requirements for beverage industry operations and make some minor adjustments to licensing requirement, became more impactful on the industry by the time it reached Governor Sununu. Signed into law on June 29, 2022, Phase 1 of HB 1039 took effect on July 1, 2022, with Phase 2 becoming effective next week, on August 23, 2022.

The Original Law

House Bill 1039, an act amending the definition of “beverage manufacturer retail outlet” and certain liquor licenses and fees, was first introduced last fall in the House of Representatives. Initially, the proposed law aimed to remove restrictions on what beverage industry operations could qualify as a “beverage manufacturer retail outlet.” Previously, in order to qualify as such an outlet, the manufacturer had to actually produce or manufacture the beverages on-site. The first draft of HB 1039 sought to remove this production or manufacturing requirement, to allow beverage manufacturers to open outlets that would operate solely for the sale, sampling, and promotion of their beverages—e.g., a tasting room.

In addition, there were two other changes to the industry proposed in the original text that made it into the final version: (1) The bill eliminated the Liquor Commission’s ability to issue multi-year liquor licenses (previously allowed by RSA 178:23, IV); and (2) The bill prohibits licensed carriers from transporting any liquor, wine, or beverage that the Liquor Commission has identified as originating from a non-permitted New Hampshire direct shipper (previously only a 90-day prohibition on transporting identified goods). Ultimately, the final version of HB 1039 presented to Governor Sununu included all of these elements, which are a part of Phase 2.

Phase 1: Shipments and Transportation of Alcohol

Beginning July 1st, the restrictions for the shipment and transportation of alcohol to New Hampshire residents were loosened. Specifically, HB 1039 amended two laws relating to such operations:

• Direct to Consumer Shipments (RSA 178-27-b): Changed direct to consumer shipping permit laws to also authorize any licensed beverage manufacturer, nano brewery, brew pub, wine manufacturer, liquor manufacturer or beverage distributor to deliver their alcohol to consumers of 21 years or older residing in New Hampshire via an employee, who holds a carrier license, a New Hampshire license, and is at least 21 years of age.
• Delivery of Beverages and Wine (RSA 179:15): Removed the volume restriction on beverage and wine transportations under subsection III(a)(4) for deliveries of “beverages and wine” within the State of New Hampshire. Previously, such deliveries were restricted to 192 ounces of malt beverage (equivalent of 12 16-ounce bottles or cans) or 1.5 liters of sparkling or still wine.

Notably, for direct-to-consumer shipments, all deliveries must be signed for by the consumer following proof of identification and age. No such deliveries can be made to any college, university, school, public library, public playground, or public park in the State. Moreover, such deliveries cannot be made into areas of the State where alcoholic beverages may not be lawfully sold (i.e., dry towns).

Phase 2: Licensing and Definition Amendments – Expanding the Beverage Industry

Beginning on August 23, 2022, the second phase of HB 1039 will go into effect. As noted above, this phase includes all three of the original aspects of the bill. The new law will have two additional impacts, both regarding festivals:

• Removal of the Production or Manufacturing requirement from the Qualification as a Beverage Manufacturing Retail Outlet (RSA 175:1, IX-a).
• Elimination of Multi-Year License Issuance (RSA 178:23, IV-V).
• Tightening Restriction on Transporting Beverages from Unauthorized Shippers (RSA 178:14, III).
• Beer Festival Licensing (RSA 178:30): To include “beer and specialty beverage” festivals. A similar amendment was made to RSA 178:29, I for Beer Festivals. This, in effect, expands to other specialty beverages, such as hard seltzers and hard ciders.
• Beer Festival Registration Fees (RSA 178:30): To include a registration fee for such “specialty beverages” for festival licenses: “a fee of 5 percent of the wholesale price per case of any specialty beverage.”

Have questions regarding HB 1039 or its impacts on your business and expansions?  Contact Allyson Moore today.