Alcohol laws in the US are stringent and can vary from state to state and sometimes even within the same state. This paper explains the characteristics of self-distribution of alcohol, its delivery, and sale on the Internet, as well as a sale on and off the premises in Tennessee. Moreover, even though Tennessee is not a franchise registration state, it has enacted franchise laws that affect the sale of alcohol in the state. An equally significant aspect of the paper is the structure of alcohol sales in the state and strange or specific laws specific to Tennessee.
Self-Distribution, Retailing and On-Site Sales
Features of self-distribution in Tennessee depend on the type of alcoholic beverage. Hodge notes that craft breweries have been approved to sell up to 1,800 barrels of beer annually across the state without using a wholesaler (31). In turn, wineries producing less than 50,000 gallons and not holding a wholesaler contract to distribute the winery’s wines in a county within 100 miles of the winery must obtain a self-distribution license. Retailing alcohol requires a license valid for one year (Retail Package Store License). On-Premise Consumption licenses are issued to restaurants, hotels, private clubs and other establishments. Possession of this document allows the sale and distribution of spirits, wine and high-gravity beer (Liquor-by-the-Drink Licenses).
Internet Sales and Shipping
Retail package stores, food stores, and wineries can deliver alcohol to consumers. Local retail package stores may offer wine, spirits, and beer delivery through their employees or a licensed Tennessee delivery service. Retail package stores can only deliver to consumers within a 100-mile radius of the store’s location (Rules of Tennessee Alcoholic Beverage Commission, 14). Grocery stores with a retail food store license may offer alcohol delivery through a licensed delivery service or pickup. Wineries licensed by Tennessee Winery Direct Shippers may sell online and deliver up to nine liters of wine to any person per month but no more than twenty-seven liters of wine to any person per year. Restaurants, bars, and other establishments that sell liquor cannot deliver alcohol to Tennessee. In Tennessee, it is legal to order alcohol online. Delivery of beer, wine and other spirits is available on the Drizly online platform.
Franchisors are not required to register or file an FDD in Tennessee. Still, they must comply with Tennessee franchise relationship laws and the Federal Franchise Rule requiring FDD issuance and disclosure 14 days before signing a franchise agreement or accepting fees. According to Tennessee Franchise Law and FDD Registration, Tennessee Code 47-25-15 prohibits franchisors from specific actions related to the state’s termination, non-renewal, or modification of franchising rights.
Grocery stores, convenience stores, and gas stations are allowed to the sale of beer daily from 8 am to 11 pm, as well as wine, except Sundays (Hodge, 8). The grocery store bans the sale of hard beers and spirits. Liquor or package stores may sell beer, wine, and distilled spirits, including vodka, gin, tequila, rum, bourbon, and scotch, from 8 am to 11 pm all days except Sunday (Hodge, 8).
On-Premise and Off-Premise Retailers
Off-premise retailers can sell alcohol on any day of the week, while on-premise retailers are limited to selling alcohol on Sundays. A winery may retail in sealed containers for outdoor consumption and sell a beverage for on-site consumption. Regarding the sale of beer, an establishment may do so on-site and off-site at the same location under one permit (Hodge, 4). Moreover, there are drive-through liquor stores in Tennessee, for example, Smartmart.
Strange or Specific Laws
Tennessee has strange and specific laws regarding the sale of alcohol. Firstly, after 10 pm, bars cannot sell or serve more than one drink at a time (Hodge, 17). Second, state law prohibits serving alcohol to persons under the influence of alcohol (Rules of Tennessee Alcoholic Beverage Commission, 9). Third, according to the Rules of the Tennessee Alcoholic Beverage Commission, Tennessee requires a store to hold a grocery store or retail liquor store license to sell non-alcoholic wine (12). Therefore, the sale of alcoholic beverages in Tennessee has unique features.
Hodge, Elisha. Guide to Alcohol and Beer Laws in Tennessee, 2022. Web.
“Liquor-by-the-Drink Licenses.” Tennessee Alcoholic Beverage Commission, Web.
“Retail Package Store License.” Tennessee Alcoholic Beverage Commission, Web.
“Tennessee Franchise Law and FDD Registration.” Internicola, Web.