ABOUT THE DIVISION OF LIQUOR CONTROL
Within the United States, each of the 50 states has an alcohol beverage control
agency that regulates the manufacturing, wholesale distribution and retail sale
of alcoholic beverages within that state. All states have some form of restrictive
system for selling alcohol. There are no unrestricted free markets for alcohol in
any state.
The Ohio Division of Liquor Control (“Division”) is responsible for controlling
the manufacture, distribution, licensing, regulation, and merchandising of beer,
wine, mixed beverages, and spirituous liquor within Ohio pursuant to Ohio Revised
Code Chapters 4301. and 4303. Regulatory functions include the issuance of permits
to manufacturers, distributors and retailers of alcoholic beverages. As a “control
state” all beer and intoxicating liquor must be bought and sold pursuant to Ohio
law.
The Division is the sole purchaser and distributor of spirituous liquor (intoxicating
liquor containing more than 21% alcohol by volume) in Ohio. The Division selects
and prices the products, and supplies them to private businesses at no charge. Authorized
agents are owners and operators of a mercantile business selling other goods and
services to the public, such as beer, wine and low proof spirituous liquor, bread,
milk, and other grocery items. The liquor inventory is the property of the state,
and the agents contracted to sell the products on the Division’s behalf receive
a commission based on sales. Agents receive a 4% commission on wholesale transactions
and a 6% commission on retail transactions. Please refer to
Liquor Agency Qualifications and Requirements on the Division’s website
for more information on becoming an authorized agent.
When the Division determines that community growth or economic activity necessitates
an additional liquor agency outlet, the Division advertises the availability in
the affected area’s local newspaper. Interested persons have one week to reply to
the advertisement by requesting an application. Applications are then sent to all
interested parties, which have three weeks to complete and return the applications
to the Division. Please refer to the Division’s website for a
current list of available liquor agencies.
An Agency Review Committee comprised of Division personnel reviews each responsive
application. Applications are scored on an objective point basis and a site visit
is conducted at each location. The Agency Review Committee then issues a recommendation
in writing to the Superintendent, who acts on the recommendation and makes the final
selection.
The Division currently has approximately 425 liquor agency outlets throughout the
state. Please refer to the Authorized
Agency list on the Division’s website. When determining whether a new liquor
agency outlet should be established, the Division is duty bound to make sound financial
and business decisions regarding the opening and maintaining of such establishments,
as we must provide and maintain the substantial financial investment of the inventory
for each location.
Regarding beer, wine and low proof spirituous liquor products, please be advised
that any person engaged in the business of manufacturing, distributing, or selling
of alcoholic beverages in Ohio is required to obtain appropriate liquor permits
from the Division.
Licensing liquor sales is not a new concept in Ohio. In fact, a liquor licensing
system existed in the Ohio Territory as early as 1792. While there have been numerous
changes to the licensing laws over the years, the concept of maintaining some form
of government control over liquor sales has remained consistent. Since December
1933, the Division has been responsible for issuing liquor permits to manufacturers,
distributors, and retailers of alcoholic beverages in Ohio.
Ohio has a three tier system regarding the manufacture, supply, distribution, and
sale at retail of beer, wine, and mixed beverage products. Any beer, wine, or mixed
beverage product must be registered for sale by the Division pursuant to
Ohio Revised
Code Section 4301.10. At the first tier, manufacturers or suppliers of registered
products are required, pursuant to Ohio’s franchise and liquor laws, to have written
agreements that make a licensed distributor (second tier) the sole provider of that
product in Ohio. Ohio retail permit holders (third tier) are then required to purchase
such products only from the distributor that has a contract to handle the approved
product in that exclusive territory. Ohio retail permit holders may then sell to
the Ohio adult consumer. Please refer to the Division’s website for a complete list
of permit types, definitions,
privileges, annual permit fees and
applications and forms.
With regard to retail liquor permits, pursuant to
Ohio Revised Code Section 4303.29(B)(3),
the population of a taxing district determines the number of permits allowed there.
This is known as the quota system. If an applicant for a liquor permit meets all
of the requirements under law and rule, and if the voters have approved liquor sales
in that precinct, and if there are permits available under the quota system, the
Division will likely issue an applicant a permit. In addition,
Ohio Revised Code
Section 4303.29(B)(3)(b) allows liquor permits in an overissued area of the state
to be transferred to an economic development project in another area of the state
where no permits are available under the quota system. For more insight into this
process, please refer to
How to Apply for a Liquor Permit on the Division’s website.
If there are no quota permits available, then an applicant would need to locate
a permit that has been issued to an existing business. Many times, businesses that
are for sale will hold a liquor permit which can then be transferred to another
business. Please refer to Permit
Quotas by County and
How to Transfer a Liquor Permit on the Division’s website. The Division
has no information on how to locate permits that may be available for transfer of
ownership in an area.
Applicants may also have another opportunity to receive a liquor permit.
Ohio Revised
Code Section 4303.181 provides for quota-exempt permits to be issued to qualified
businesses. Each permit class has different statutory requirements for issuance.
An application for a liquor permit could be approved within six to eight weeks,
assuming no adverse information is discovered during the process and if no objection
hearing is requested by either the local legislative authority or an institution
within 500 feet of the proposed location. Please refer to
How to Object to the Issuance of a Permit on the Division’s website.
It is also important to know that pursuant to
Ohio Revised Code Section 4301.32,
the people of a precinct determine, through the election process, which liquor privileges,
if any, they wish to be available within their precinct. The Division obtains from
the local Board of Elections the entire local option election results for each and
every proposed permit location to determine the liquor privileges as part of the
application process. For more information regarding local option elections, please
contact your local Board of Elections or the Secretary of the State of Ohio. The
Secretary of State’s website is www.sos.state.oh.us.
It is also important to note that the Division is not the sole governmental entity
that regulates liquor in Ohio.
The Ohio Department of Public Safety, Investigative
Unit (“Public Safety”) is responsible for the enforcement of the majority
of Ohio’s liquor laws and rules and for conducting investigations at licensed and
non-licensed locations throughout the state. If you are concerned about an establishment
violating Ohio liquor law including underage sales, you may report the violations
by calling Public Safety’s toll free hotline at 1-877-464-6677.
In addition, the Ohio Liquor Control Commission
promulgates the relevant rules and issues decisions regarding violations of the
law by permit holders, the Ohio Department of Taxation
is responsible for the collection of all applicable taxes, and the
U.S. Department of the Treasury Tax and Trade Bureau is responsible for
administering the federal liquor laws. Your local health department is responsible
for enforcing the health laws. The Division is not empowered to speak for these
other autonomous legal entities.
The Division has available on its website a plethora of information, including a
Permit Information
and Resources Directory as a helpful guide for understanding many of the
liquor laws and rules. This publication is not, however, a complete guide. You can
access the Ohio liquor laws within the Ohio Revised Code and the Ohio Administrative
Code from the Division’s website. You can also order a copy of the Ohio liquor
laws from LexisNexis at www.lexisnexis.com/bookstore.
We hope that the information provided on the Division’s website will help you to
better understand Ohio’s alcohol beverage system.
Thank You.