In counties such as San Francisco, where a moratorium has been established discontinuing the issuance of certain new liquor licenses that may sell distilled spirits, such as a Type 47, new restaurant owners who wish to sell spirits must find and purchase a license on the open market. This can be extremely costly and become a crippling expense for a new business owner as such licenses in these counties can presently sell for $225,000 or more. This price tag has sent some business owners in a different direction.
In 1996, the Brewpub Statute was added to the Alcoholic Beverage Control Act under Bus. & Prof. Code § 23396.3. This created the Type 75 On-Sale General Brewpub license which, among other attributes and limitations, authorizes the sale of distilled spirits, has an original cost of $12,000, and it’s issuance is not blocked by the moratorium.
A closer look shows that a Type 75 On-Sale General Brewpub license authorizes the sale of beer, wine, and distilled spirits for onsite consumption at a bona fide eating place. Though it is defined as a retail license, the Type 75 authorizes the limited manufacturing of beer (as opposed to the other two beer manufacturing licenses which are not retail licenses). The holder of this license must brew a minimum of 100 barrels of beer per year, but not more than 5,000 barrels annually. In addition, any beer sold for resale must be sold to a wholesaler and cannot be directly sold to a retailer, which results in much of the beer manufactured by the license holder to be sold on the licensed premise. Minors are also permitted on the premises.
This license holds a unique value in counties that maintain a moratorium on the more common licenses that authorize the sale of distilled spirits. The cost of a Type 75 license at $12,000 plus the price to obtain and install a seven barrel brewing system (the minimum size required for the holder of a Type 75) will likely be much less expensive than purchasing and transferring a Type 47. Thus, where a business owner has the capacity to install a brewing system on their premises and brew at least 100 barrels of beer per year, the expenditure to open a restaurant that may sell spirits diminishes significantly. For a new business owner, the Type 75 can be a reasonable alternative to an exorbitantly priced Type 47 in counties that maintain a moratorium on licenses that permit the on-sale retail of distilled spirits.