SB259 Alabama 2024 Session

Summary

Primary Sponsor

Bobby D. SingletonSenator

Democrat

Session

Regular Session 2024

Title

Mixed Spirit Beverages; providing for definition, licensure, and distribution

Summary

SB259 creates a new category of ready-to-drink mixed spirit beverages (up to 8% ABV), establishes a three-tier distribution and exclusive-territory franchise system, imposes taxes and licensing, and adds a comprehensive Chapter 8B to regulate these beverages in Alabama.

What This Bill Does

Defines mixed spirit beverages as RTD drinks with up to 8% alcohol by volume and packaging limits. Requires most mixed spirit beverages (except ABC Board products) to be distributed through licensed wholesalers and sold to licensed retailers for on- and off-premises consumption. Requires importers and manufacturers to designate sales territories and enter exclusive franchise agreements with licensed wholesalers, with specific rules for modifying, terminating, nonrenewing, or discontinuing agreements. Imposes a privilege/excise tax on these beverages and creates a licensing framework with various fees, plus a detailed tax distribution to state, local governments, and enforcement/regulatory bodies; also authorizes the Alabama Alcoholic Beverage Control Board to operate in limited wholesale capacity for board-controlled liquor stores. The act takes effect January 1, 2025.

Who It Affects

• Importers and manufacturers of mixed spirit beverages: must designate sales territories, enter exclusive franchise agreements with wholesalers, pay licensing fees, and comply with background checks and other regulatory requirements.
• Wholesalers of mixed spirit beverages: must operate within designated exclusive territories, carry all brands assigned by suppliers, follow franchise and transfer rules, and participate in enforcement and reporting requirements; may be subject to arbitration and potential compensation if agreements are disrupted.
• Licensed retailers (licensees): must obtain licenses to sell mixed spirit beverages and purchase from designated licensed wholesalers; expansion of limited licenses for retail sale (including on/off premises) with specified fees and terms.
• Local governments (counties and municipalities): receive a portion of the mixed spirit beverage taxes; may levy fees to cover administration, and must regulate and enforce license-related activities within their jurisdictions.
• The ABC Board and law enforcement (ALEA): may share regulatory/administrative duties and receive funds for enforcement; the Board also has specific exemptions and potential wholesale role in limited circumstances.
• General public/consumers: gains access to a new category of beverages with on- and off-premises options, subject to new taxes, labeling/advertising rules, and product standards.

Key Provisions

• Defines mixed spirit beverages as single-serve containers up to 16 ounces with up to 8% ABV and bans larger or higher-ABV variants in this category.
• Creates a three-tier system for mixed spirit beverages and requires wholesale distribution through licensed wholesalers, with ABC-distributed products excluded from wholesale requirements.
• Requires importers/manufacturers to designate exclusive sales territories for each brand and to enter exclusive franchise agreements with a licensed wholesaler for each territory.
• Establishes detailed franchise rules, including modification, termination, nonrenewal, cancellation, discontinuance, and transfer procedures; outlines remedies and arbitration processes for disputes.
• Imposes a privilege/excise tax on mixed spirit beverages at 68 cents per 12 ounces (with a separate 62-cent base for wholesale sales and portions distributed to state, regulatory, enforcement, and local entities); local governments may also levy license-related fees, and tax collection includes a pool of funds for various agencies.
• Provides a comprehensive license fee schedule for manufacturers, importers, wholesalers, and retailers related to mixed spirit beverages, plus specific fees for special licenses, warehouses, and expanded retail licenses.
• Adds Chapter 8B to regulate franchise relationships between suppliers and Alabama wholesalers, including agreements, transfers, designated members, penalties for bad faith actions, and dispute resolution (arbitration) with cost-sharing and venue rules.
• Allows the ABC Board to purchase mixed spirit beverages directly from manufacturers and sell to retail customers through board-operated liquor stores, while maintaining the three-tier system and restricting distribution to liquor stores.
• Requires background checks, fingerprints, and financial disclosures for license applicants; requires conspicuous display of licenses at licensed premises and local approval of certain retail licenses.
• Effective date: January 1, 2025.

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

Subjects

Alcoholic Beverages & Tobacco