Law Offices of John P. Connell, P.C. In Massachusetts, a wholesaler is a person or business that purchases alcoholic beverages from manufacturers, such as breweries, wineries, and distilleries, and then sells those alcoholic beverages at a markup price to retailers, such as restaurants and liquor stores. The wholesaler occupies the middle tier of the three-tier system used here in Massachusetts and in most states around the country.
In order to become an alcoholic beverage wholesaler, you will be required to comply with all federal and state regulations, which require that you obtain a Basic Permit from the TTB at the federal level and then a Massachusetts Wholesaler license from the Massachusetts Alcoholic Beverages Control Commission. In order to file an application for a Basic Permit with the TTB, the first step in the process, the prospective wholesaler will need to have accomplished a few conditional goals.
First, a wholesaler needs to acquire a warehouse where it will receive and store alcoholic beverages from its manufacturers. You may choose to lease a storage space, and pay rent, or purchase a warehouse building outright. You also may lease a pre-licensed Public Warehouse. A Public Warehouse is a location used for storing the wholesaler’s alcoholic beverages that has already been permitted by the ABCC to warehouse alcoholic beverages pursuant to Massachusetts General Laws Chapter 138, § 20. A Public Warehouse is a business that provides storage to multiple businesses on a short or long-term basis. The Public Warehouse typically owns its own equipment and staff to manage the operations of the facility. The ABCC currently maintains a list of approximately eighteen Public Warehouses located throughout Massachusetts.
In order to operate an alcoholic beverages wholesale business, a company must first complete an application for a Basic Permit with the TTB and submit such documents as the corporation’s by-laws, lease, diagrams of the warehouse, and a host of other necessary documents. There is no filing fee for a Basic Permit at the TTB. The average wait time to processing a Basic Permit is approximately 60 days according to the TTB website. The TTB must approve of a wholesaler’s application before the wholesaler can commence any business.
After receiving a TTB Basic Permit, the applicant must then file an application for a Wholesalers License with the ABCC pursuant to Massachusetts General Laws, Chapter 138, §18. This application will seek much or the TTB application sought but there are a few limitations to having an interest in Massachusetts Wholesalers license that are not present at the Federal level. For example, pursuant to Chapter 138, §18, the ABCC may only issue wholesaler licenses to corporations organized in Massachusetts where all the directors are citizens of the United States and a majority thereof are residents Massachusetts. Also, no person holding any interest in this license may also hold an interest in a “pouring” license under § 12 or § 15. Interestingly, however, a person can hold an interest in a farmer-winery or farmer-brewery license and in interest in no more than one licensed wholesaler business, so those who seek to apply for a wholesale license are not prohibited from doing so under Massachusetts’ law if they hold an interest in a farmer-winery or farmer-brewer license.