Recent Illinois legislation makes significant but not seismic changes to the Illinois liquor code. Under Illinois Senate Bill 618, which will pass in veto session, distillers, brewers and retailers will see enhanced privileges, but Illinois wineries don’t seem to obtain the privileges they were seeking.

Craft distillers

The craft distillers will see enhanced privileges but will fall short of their main goal of obtaining DTC shipping of spirits. The wholesaler lobby fought hard to prevent the advancement of DTC shipping and to maintain the status quo.

This legislation creates a new license called a Class 3 craft distiller license, which will allow the manufacturing of up to 100,000 gallons, the ability to sell spirits manufactured on the distiller’s premises or manufactured at another location owned by the Class 3 license holder, the right to full retail privileges (sell other manufactures spirits, beer, and wine brands) and the right to self-distribute. The distribution limit is set at 5,000 gallons. Under current law, a craft distiller can self-distribute 5,000 gallons but its production is limited to 50,000 gallons. The Class 3 craft distiller license would double the production limits. Additionally, a Class 3 licensee can transfer up to 2,500 gallons to another location it owns.

Also, for all craft distillers, a spirits showcase permit is created which allows a distiller to transfer products from its premises to a special event.

Brewers

The legislation also creates new benefits for Illinois brewers, although I agree with the benefits these proposed privileges may run afoul of happy hour and discount rules.

Here are some of the proposed benefits:

A loyalty program which allows a brew pub, class 1, 2, & 3 brewers, and a manufacturer with retail privileges (brewer or brewers) to offer participants in the loyalty program access to special pricing by virtue of being a member of a bona fide loyalty program.

Mug club is a group organized by a brewer whose members are entitled to access rewards for purchases made on the brewer’s premises. “Mug club” includes, but is not limited to, point accumulation programs, the purchase and use of specialty glassware, and the purchase and use of non-alcoholic beverage products.

Rewards program is offered by brewers and allows consumers to accrue program benefits, in the form of points or other accrual-based methods of rewards, through the purchase of products that can be redeemed in the form of discounts on subsequent transactions of alcoholic or non-alcoholic products.

The legislation also provides what is permissible under the brewer’s loyalty program, which includes offering benefits to program members that are not offered to other consumers, and require members to pay a fee as a condition for membership.

As indicated, this proposed legislation may conflict or create an exception to Illinois happy hour discount laws.

Retailers

The Illinois Retailers Merchants Association (IRMA) pressed for legislation that would prevent its members from incurring liability based on the actions of third-party delivery services.

The legislation permits retailers to use any third party or mobile app to facilitate the sale and delivery of alcohol. It also does not allow any local government to require a retailer to obtain a separate or additional license for delivery of alcoholic liquor.

A manufacturer with a retail license is permitted to deliver alcohol.

Under the legislation, a retailer shall not be civilly liable for sales or deliveries made to intoxicated persons or persons under 21, if the delivery was conducted by a third-party contractor or agent that the retailer contracted with to make deliveries.

New requirements for under 21-year-old stings

Whether it is stings through retail delivery or stings in the bricks-and-mortar store, something has the retail community demanding change and a stricter standard for sales to minor investigations.

The legislation requires that:

The minor be 18 or 19 years old, the minor should be someone generally expected to be under 21 and shall not purposely disguise their appearance, the minor should be photographed before and after an investigation to record the minor’s appearance during the investigation, the minor shall respond truthfully to questions about their age, and the minor shall not use a fake id.

Clearly the retail community is not happy with the stings and is demanding more stringent standards from the state.

Limiting cocktails

The definition of cocktails under the cocktails-to-go statute is limited by this legislation to exclude cocktails in the original or sealed container that is filled, sealed, or labeled by the manufacturer.

The purpose of the legislation is to prevent a business like a craft distiller with retail privileges from providing its own manufactured product as a cocktail creation.

Wine

What is not in the legislation are privileges for Illinois wineries. Illinois wineries sought enhanced self-distribution privileges. Unfortunately, a fierce fight by the Wine and Spirts Wholesalers of Illinois kept this from happening.

Ironically, the Illinois Wholesalers are not distributing and carrying Illinois wines, their portfolios are dominated by California and foreign wines, yet they want to block Illinois wineries from greater market access. Why the legislature allows this is beyond me!