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What is an ABC License in California?

F. Michael Ayaz

Over the years, the alcohol industry has enjoyed amazing success. Even amid economic challenges such as a worldwide pandemic, alcohol sales continue to generate vast amounts of revenue, and California has one of the country’s largest markets. It makes sense for business owners to seek out a piece of that success by expanding their products and services to include alcohol sales. In fact, within the restaurant industry, over 20% of their profits come from alcohol sales.

It might seem like a natural progression to start offering alcoholic drinks to customers in such an establishment. That said, there are legal procedures that must be followed to do so. Business owners in possession of a license to sell food and beverages might be tempted to simply add the new items to the menu and start stocking up on wine and spirits. However, these licenses do not cover the ability to sell alcohol in California, and attempting to do so is considered a misdemeanor in violation of alcohol beverage complianceThat’s where ABC licenses come in. For California businesses to legally sell alcoholic beverages, they must be in possession of a liquor license. These licenses issued by the State Department of Alcoholic Beverage Control, are also referred to as ABC licenses.

Do You Need a Permit to Serve Alcohol in California?

To legally serve alcohol in the state of California, business owners are required to overcome several obstacles along the way to obtain the following: a local business license, an employer identification number, a county health permit, a California seller’s permit, and finally, your ABC license. If your business is a restaurant or already involves food service in some fashion, you’ll likely have already acquired most of the above.

If you are in the process of starting up a new business, however, you’ll need to ensure you have all the proper paperwork in place. Simply obtaining an ABC license is not enough to allow you to legally sell alcohol. You need to establish your business as a proper commercial entity and ensure you secure the permits necessary to guarantee your consumers’ safety while also seeing that the correct amounts of taxation are factored into the process.

It should be noted that certain restrictions apply in California, even after procuring the various permits and licenses necessary. For instance, under most circumstances, California does not permit the sale of alcohol from food trucks. Some additional limitations and requirements may apply depending on the exact location of your business within the state, and failing to follow the law could result in heavy fines or even prison time. That’s why it’s critical to ensure you are up to date on all local laws regarding the sale of alcohol prior to pursuing such a venture. Fortunately, local law firms can assist with any questions you might have regarding the process.

How Much Is an ABC License in California?

The first question to ask when attempting to determine the price of an ABC license is the method of purchase. While ABC licenses can be directly applied for from the State Department of Alcoholic Beverage Controlthey can also be purchased on the open market. However, the specifics will vary from case to case. However, keep in mind that licenses purchased on the open market will still require an application to process the transfer of license to the new owner. Consulting with an experienced attorney can help ensure that any licensing transfers are carried out lawfully.

ABC licenses offered via the open market are actually available in various types to California business owners. The cost of an ABC license will vary depending on which is most applicable in your situation. Multiple factors have an impact on how much you’re required to invest in this category. The amount mainly comes down a few factors, which include:

  • The county you’re in
  • The current market value
  • The type of business you’re running
  • The types of alcohol you wish to sell
  • Whether you’re looking for something on-sale so patrons can consume on the premises, or off-sale meaning patrons must consume their alcohol off the property.

For instance, a full liquor ABC license for restaurants will be priced differently than one that only covers the sale of beer and wine in convenience stores. Generally speaking, ABC licenses can cost anywhere from a relatively affordable $3,000 to a more extravagant $400,000.

When applied for from the State Department of Alcoholic Beverage Control, there are a number of fees involved instead of one specific price. These include a one-time application fee, annual fees, and any applicable surcharges. Annual fees may also vary depending on the amount of production, the local population, and the seasons of operation.

Is It Hard to Get a Liquor License in California?

Obtaining a California liquor license can be difficult, given the high amount of competition and the limited number of liquor licenses. Starting back in 1939, the number of licenses available in California has been limited in some fashion. Currently, the number of licenses available is limited to one on-sale license for every 2,000 people and one off-sale license for every 2,500 people per county. The other obstacle involved is ensuring that the correct type of liquor license is purchased. Consulting an attorney can assist you with verifying that you are looking at the types of licenses that are appropriate for your business. You’ll also want to consider the services you wish to provide for your customers and whether your budget will limit you to lighter drinks such as beer and wine or will allow you to cover the sale of spirits as well.

What Is the ABC Law in California?

Alcoholic Beverage Control laws indicate that the paperwork and procedures described above are required for the legal sale and service of alcohol, and the details pertaining to such laws are extensively covered within the Alcoholic Beverage Control Act, which is updated regularly. The most recent version, which consists of 658 pages, was published in 2020 and encompasses all existing ABC laws from 2019, in addition to the amendments made during the 2019 Regular Session of the 2019-2020 California Legislature, and any new laws that took effect in January 1st of 2020. These include provisions in regard to the process of licensing and fees but also have additional information regarding prohibited activities, beverage service training, and much more.

If you’re considering purchasing an ABC license, there is a lot you’ll have to research ahead of time to ensure you are proceeding in accordance with present ABC laws. The best way to do this is by consulting with a professional attorney that is familiar with alcohol beverage compliance. At Blake and Ayaz, our team of lawyers have years of experience working within the California judicial system and can guide you through every step of the process. For more information, contact our office via our website for a free consultation, or give us a call at (714) 455-1940.

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