Happy Hour comes to Indiana

The Governor signed into law legislation that brings back Happy Hour to Indiana after nearly a 40-year hiatus. The new law takes effect on July 1, 2024. Happy hour is limited to four hours in one day, and fifteen hours in one week. The four hours in a day can be divided into nonconsecutive periods. Price reductions are prohibited between the hours of 10:00 p.m. to 3:00 a.m.

The new law also bans certain practices. It would prohibit a retailer from running or sponsoring a contest where the contest is determined on the amount of alcohol consumed, or maintain a contest awarding alcohol or reduced alcohol prices as prizes for the game.

The law would also ban the selling or serving of an unlimited or indefinite amount of alcohol for a fixed price. No more endless Mimosas!

There are other notable provisions, all which become effective July 1, 2024. These include the following:

Hotels are allowed to serve alcohol to registered guest and their guest in an area of the hotel where alcoholic beverages are not sold at no additional charge.

Craft manufacturers are defined for the first time to include the holders of a small brewery, farm winery and artisan distiller’s permits.

Beer, wine, and liquor retailers would be permitted to sell to-go drinks subject to container and package notification requirements.

Craft manufacturer and retailer’s permit holders are required to obtain a liquor liability insurance policy of $500,000 and to provide proof of insurance to the Commission before applying for or renewing a permit. After June 30, 2024, one cannot be issued, renew, or transfer a permit without proof of insurance.

If a retailer or craft manufacturer renewed their permit before July 1, 2024, they must comply with the insurance requirement before January 1, 2025.

Beer wholesalers expand privileges over the objection of spirts wholesalers

HB 1025 was signed into law by the Governor which allows beer wholesaler to distribute RTDs. This movement became successful the second time around and passed over the stringent objections from spirits wholesalers.[1]

The new law creates a definition of mixed beverages to include a prepared cordial, cocktail, or highball in a can or container no more than 24 ounces. A mixed beverage is considered a mixture of whiskey, neutral spirits, brandy, gin, or another distilled spirit; and carbonated or plain water, pure juice from a flower or plant or other flavoring materials. The ABV on a mixed beverage is limited to 15% alcohol.

The legislation permits wine wholesalers to sell mixed beverages. This is significant because Indiana provides for combined wholesale license of beer and wine or liquor and wine, so putting distribution under a wine wholesaler license allows a beer distributor, who generally can’t distribute liquor, to be able to distribute mixed beverages through its wine wholesaling privileges.

With the proposed lines blurring on what constitutes a beer and liquor distributor, will the liquor distributors clamor for more rights? For example, beer distributors maintain franchise protections, liquor wholesalers do not maintain these same protections, will there be fight to obtain these privileges for liquor wholesalers?

These types of changes didn’t make it into this law, but that does not mean they are dead. Spirits wholesalers could come back with more demands next time.

[1] https://www.ibj.com/articles/indiana-wholesalers-fight-over-surging-ready-to-drink-cocktail-market