SB194 Alabama 2023 Session

Summary

Primary Sponsor

Steve LivingstonSenator

Republican

Session

Regular Session 2023

Title

Relating to alcoholic beverages; to amend Sections 28-3-1, 28-3A-3, 28-3A-21, and 28-3A-23, Code of Alabama 1975 and add Sections 28-3-208, 28-3A-9.1, and 28-3A-17.2 to the Code of Alabama 1975; to define a new category of low-alcohol content liquor beverages called mixed spirit beverages; to require all mixed spirit beverages, other than those distributed by the Alcoholic Beverage Control Board, to be distributed through a licensed wholesaler; to levy taxes upon the distribution of these beverages; to provide for licensure of retailers of mixed spirit beverages and set a fee for licensure; to add Chapter 8B to Title 28 of the Code of Alabama 1975; to require licensed importers, manufacturers, and suppliers of mixed spirit beverages to enter into exclusive franchise agreements with wholesalers; to exempt from the wholesaler franchise laws mixed spirit beverages distributed by the Alcoholic Beverage Control Board and sold at retail at ABC stores; and to make nonsubstantive, technical revisions to update the existing code language to current style.

Summary

The bill creates a new low-alcohol mixed spirit beverage category and overhauls Alabama’s alcohol laws to require exclusive wholesaler-franchise systems, new taxes, and licensure for these beverages while regulating suppliers, wholesalers, and retailers.

What This Bill Does

It defines mixed spirit beverages as single-serve drinks up to 12.5% alcohol by volume (ABV) in containers no larger than 16 ounces and requires these beverages (except those distributed by the ABC Board) to go through licensed wholesalers to licensed retailers for on- and off-premises consumption. Importers and manufacturers of mixed spirit beverages must designate sales territories and enter exclusive franchise agreements with wholesalers for each territory, with rules for modifying, terminating, or nonrenewing those agreements. The bill imposes a tax on mixed spirit beverage distribution (0.98 per 12 ounces or fraction thereof) collected by wholesalers and remitted to the state and local governments, with specified allocations and discounts for timely payment. It also creates a new Chapter 8B to regulate the supplier-wholesaler relationship with exclusive territories, annual license fees for related licenses, dispute resolution through arbitration, and remedies, while allowing the ABC Board to act as a MSB wholesaler and exempting its MSB distribution from some franchise provisions; the ABC Board could distribute MSB to its own liquor stores, and MSB labeling/advertising rules would be set by the board. The act would also add licensure for MSB retailers and set various fees, with an effective date of April 1, 2024.

Who It Affects

• Importers and manufacturers of mixed spirit beverages: would have to designate sales territories, enter exclusive franchise agreements with wholesalers for each territory, pay new licensure and related fees, and be subject to the new MSB tax and distribution rules.
• Wholesalers and retailers of mixed spirit beverages (including the ABC Board’s MSB distribution role): would be subject to new MSB wholesaler licenses, exclusive territory restrictions, franchise rules, transfer/alteration provisions, dispute resolution through arbitration, and related licensing fees; retailers would need MSB retailer licenses and pay applicable fees, with local tax payments and regulatory requirements.

Key Provisions

• Defines mixed spirit beverage as a single-serve beverage up to 12.5% ABV in containers no larger than 16 ounces.
• All mixed spirit beverages, except those distributed by the ABC Board, must be distributed through licensed wholesalers to licensed retailers for on- and off-premises consumption.
• Importers and manufacturers must designate sales territories and enter exclusive franchise agreements with licensed wholesalers for each territory, with rules for modification, termination, cancellation, nonrenewal, or discontinuance.
• Imposes a 0.98 per 12-ounce (or fractional part) tax on mixed spirit beverages, collected by wholesalers and remitted monthly to the board and local governments, with specified allocation and discount provisions for timely payment.
• Adds Chapter 8B to Title 28 to govern exclusive MSB franchise relationships, including definitions (agreement, supplier, wholesaler, sales territory), prohibited practices, and dispute resolution through arbitration with detailed procedures and cost sharing.
• Allows the ABC Board to act as a MSB wholesaler and to distribute mixed spirit beverages to liquor stores, while providing for exemptions of ABC-distributed MSB from certain wholesaler-franchise requirements; defines that ABC MSB distribution is exempt from some provisions.
• Requires licensure for MSB retailers and sets various license fees for manufacturers, importers, wholesalers, warehouses, and limited/expanded retail licenses, with fees detailed in the bill and annual/term-based structures.
• Includes labeling, advertising, and packaging controls for mixed spirit beverages, with board approval rights over certain labels and marketing practices.
• Includes provisions for enforcement, penalties, refunds, and remedies, including possible damages and arbitration outcomes for disputes between suppliers and wholesalers.
• Effective date is April 1, 2024, after governor approval or as otherwise enacted into law.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.