HB 2517: Concerning Penalities for Alcohol Manufacturers Who Have Committed Violations as Part of Their Ancillary Activities

Washington State wineries operate in all three tiers (manufacturing, distributing and retailing) and must comply with all applicable laws while acting as retailers, as distributors, or as manufacturers unless specifically exempted. All three of these activities are tied to the winery license itself and any violations are levied against the full license, which means the LCB has the power to shut down your wholesale and production activity for the entire duration of a violation from a winery’s retail portion of their business. WWI learned about this concern this past fall while speaking with the Liquor and Cannabis Board as well as our partners in the Washington beer and spirits industries. We then teamed up to write legislation for the 2018 session to fix this problem and create certainty moving forward that no winery, brewery, or distillery will experience a complete and total business shutdown for having a violation on the retail side of their business.

HB 2517:
• Defines retailing activities where manufacturers are interfacing with the public as “ancillary activities”
• Charges the Liquor & Cannabis Board with adopting a penalty schedule for violations incurred while performing ancillary activities
• Penalties may not include the suspension or revocation of the winery license
• The Liquor & Cannabis Board would still maintain the ability levy significant penalties, suspend interactions with the public when appropriate and protect the public interest