Part 1: Wineries
Drive through downtown Billings, and the profusion of microbreweries and distilleries is apparent. New York City we are not (some would say for the better), but Billings does have its own unique and evolving culture, which includes a thriving and innovative brewery/winery/distillery industry. Our firm represents these businesses, which are located throughout Montana, Wyoming and the Northwest. Some--like Merry Cellars and Red Lodge Ales--have already won awards. Others--like Bozeman Spirits Distillery and Triple Divide Spirits of Helena--are making their presence known through their unique brands. RoughStock Distillery of Bozeman, in business since 2008, was one of the pioneers in Montana's modern distillery industry. Prairie Fire Brewing Company of Gillette, Wyoming, is a creative and focused company with an intentional branding strategy. Uberbrew, with a retail establishment in Billings and a brewing facility in Fort Collins, Wyoming, is a resourceful company with huge brand interest. Glamma Wine, a nascent Billings-based wine business and forward-thinking company, has already taken steps to protect its brand internationally.
What all of these businesses have in common is a recognition that branding is an important facet of the success of their business. These companies also need to understand the permutations of the various licensing requirements that govern their respective businesses. This article is one of a three-part series that will address, with respect to Montana only, the statutory licensing requirements for wineries, distilleries and breweries located or doing business in Montana. This first article will address licensing requirements as they pertain to wineries and those who do business with wineries.
Only licensed wineries may manufacture wine in Montana or distribute wine to retailers located in Montana. Mont. Code Ann. § 16-4-107. In addition to obtaining a state license, wineries located in Montana must also hold a basic permit from the U.S. Department of the Treasury. Wineries located outside of Montana (and shipping wine to retailers located in Montana) must be licensed both in Montana and in the state in which the wine is made, and they too must have a basic permit from the federal government.
Mont. Code Ann. § 16-3-411 sets forth certain requirements for doing business as a Montana-license winery; for example, there are provisions governing contracts with common carriers and the labeling of boxes for delivery to retail licensees.
Those who distribute wine in Montana must be licensed under Mont. Code Ann. § 16-4-108. Mont. Code Ann. § 16-3-403 provides that a licensed distributor may sell wine to another licensed distributor, a retailer or common carrier, or an agency liquor store. A distributor may not allow wine to be consumed on its premises, nor may a distributor provide wine to the public. A licensed distributor must have a written distributorship agreement in place with the supplier of the wine, and Montana law requires that certain provisions be included in that agreement. Mont. Code Ann. § 16-3-416 and -417. In addition, licensed distributors must keep records of all wine on hand, sold and distributed. Mont. Code Ann. § 16-3-402. Any wine that has been shipped into Montana in violation of these requirements may be confiscated by the state.
Wine retailers must be licensed under Mont. Code Ann. § 16-4-115. If the premises where the wine is being sold are shared with another business, that business must be a pharmacy or grocery store. All applicants for a license to sell wine at a retail establishment are subject to investigation by the Montana Department of Justice. The physical space where the wine is sold must be a stand-alone building or part of a building that is separated from the rest of the building by permanent walls. Mont. Code Ann. § 16-3-311.
The "direct shipment endorsement," which was enacted by the Montana legislature in 2013, allows licensed wineries to ship up to 18 cases of wine annually to a consumer in Montana who is at least 21 years old. Mont. Code Ann. § 16-3-411(1)(a)(i). The wine must be for personal use and not for resale, and the recipient must sign an acknowledging receipt. The wine must be shipped by common carrier and conspicuously labeled with the words: "Contains Alcohol: Signature of Person Age 21 or Older Required for Delivery." Records of all shipments under the direct shipment endorsement must be kept for three years and are subject to audit by the Montana Department of Revenue.
