How Private Labels Blur the Lines of Beverage Law

Feb 19, 2019

By: Louis Terminello, Esq. and Brad Berkman*

You’ve been in the biz for a long time. Started as a bar back, then bartender, manager and now you’re running your own show. You know the rules of the game…at least you think you do.

This is the first time you ordered too low. You’re embarrassed but you need to get it done so you head to the nearby liquor store to buy one case of vodka as cover until the order comes in. You know it’s illegal but you need to fill the rail. You scan the shelves looking for value. There it is the vodka with the stores name on the label. Her own brand…how does she do it you wonder…this can’t be right.

Welcome to the world of the private label. Buried in the Florida statutes, lies an exception that blurs the lines of the Beverage Law. The language of the statutory provisions states “nothing in this section shall prohibit the ownership by vendors of any brand, brand name or label of alcoholic beverage.”

Exceptions to laws are not uncommon. Almost always though, these statutory exceptions are further defined by other statutory exceptions. The Florida private label exception is no exception. Confusing? You bet.

Private label laws have multiple complex requirements requiring an analysis of the structure of the business(s) entities involved in the transaction, the sales terms between producer and private label owner (including contract drafting and analysis to ensure compliance). Often times, matters of trademark come into play and the potential to take a private label brand into the broad market, beyond the exclusive shelf of the retail licensee. Analysis of both federal and state(s) laws are sometimes required if the private label owner’s business model requires.

Private label product presents a unique profit center for retail licensees in terms of increased margins, promotion of the retail venue, and in some instances represents a true brand building exercise that translates to volume sales.

The structure of the private label deal must fit within the legal exceptions, with all its complexities, to withstand regulatory scrutiny. So, the caveat is, proceed with caution, create a legally complaint business structure, rely on the experts and then rest easy while reaping the rewards of brand ownership.

The Greenspoon Marder Alcohol Beverage Law team has structured innumerable private label arrangements. Please contact us at [email protected] to see how we can advise you on yours.

*Not an Attorney

* *The information in this article is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Greenspoon Marder LLP or the individual author(s), nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

About Greenspoon Marder

Greenspoon Marder LLP is a full-service law firm with over 240 attorneys and more than 20 office locations across the United States. With operations from Miami to New York and from Denver to Los Angeles, our firm attracts some of the nation’s top talent in key markets and innovation hubs. Our core practice areas include Real Estate, Litigation, and Transactional Services, complemented by the capabilities of a full-service firm. Greenspoon Marder has upheld a spot on The American Lawyer’s Am Law 200 as one of the top law firms in the U.S. since 2015, and our goal is to provide exceptional client service by developing a thorough understanding of each client’s business needs and objectives in order to provide strategic, cost-effective solutions.

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How Private Labels Blur the Lines of Beverage Law

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