The sale of beer, wine and distilled spirits in Michigan is controlled and regulated by the State of Michigan through the Michigan Liquor Control Commission (“MLCC”). The MLCC’s activities include issuing licenses, investigating and approving prospective licensees, and enforcing the Michigan Liquor Control Code and related regulations.
Licensing
To engage in the sale of alcohol in Michigan, a person must obtain the proper liquor license. Liquor licenses can be broadly categorized as “on-premise” licenses for the sale and consumption of alcohol on the licensed premises (such as a bar or restaurant), or “off-premise” licenses for the sale of alcohol for consumption off the licensed premises (such as a grocery or liquor store). Generally speaking, these licenses are further divided into licenses that allow the sale of beer and wine only, and those that allow for beer, wine and distilled spirits. There are also various types of licenses based on the type of business the licensee is engaged in, including golf courses, hotels, private clubs, brew pubs, among others.
There are two main ways to obtain a liquor license. The first is to apply directly with the MLCC for issuance of a new license. The number of new licenses that can be issued by the state is governed by a quota system based on the population of the municipality in which the license will be utilized.
Given that the quotas for most larger Michigan cities have been met, meaning new licenses cannot be issued, the most common way to obtain a liquor license is through the purchase or transfer of an existing license. This can be done through the purchase of a current licensee’s business, including the liquor license, or purchase of just the license itself.
Whether a prospective licensee is applying for the issuance of a new license or transfer of an existing license, he or she will need to go through a background check and investigation by the MLCC to assure that the applicant is fit to be a licensee, and is in compliance with all applicable laws and regulations. The prospective licensee will also need to carefully review and comply with all local ordinances in the municipality in which the applicant intends to operate. Where the prospective licensee is seeking issuance of a new on-premise license, he or she will need to obtain express approval from the municipality as a condition to the MLCC issuing a license. This process can be complex and fraught with legal, procedural, and political pitfalls.
Enforcement – Violations
The second primary function of the MLCC is to enforce Michigan’s laws and regulations applicable to the sale of alcohol. This includes but is not limited to sales of alcohol to minors, sales to intoxicated persons, and compliance with conditions and terms of licensure.
The MLCC’s enforcement activities can be strict and unforgiving. Depending on the nature of the violation, the MLCC is often afforded broad discretion to impose a wide range of penalties. For example, for a sale to minor violation, the MLCC may suspend or revoke a license, even if it is the licensee’s first infraction. Further, Michigan law mandates that a license be suspended if the licensee has three sale to minor violations in a two year period. While suspension or revocation is rare in the case of a first or second violation, the MLCC will almost always impose a fine in an amount the MLCC hearing officer deems appropriate based on the licensee’s history other factors, such as the measures it has taken to assure that the violation does not occur again.
Given the MLCC’s broad discretion and Michigan’s strict laws, violations can have potentially devastating consequences for a licensee and his or her business.
Whether you are seeking to obtain a liquor license, looking to transfer or sell your license, attempting to remain compliant, or facing a violation, the assistance of experienced and knowledgeable legal counsel will be invaluable in securing and protecting your important personal and business interests.
At the Law Office of Jeffery M. Bloom, we have years of experience representing licensees in transaction and violation matters, along with consulting with licensees on best practices to assure full and continued compliance. Jeff’s experience includes several years of representing the interests of one of the nation’s largest grocery chains in all of its liquor licensing matters, including license transactions, violations, municipal proceedings, and political and public relations. Call today to put his invaluable experience to work for you and your business.
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