What Does a Liquor Board Do?

Liquor Board InspectorA liquor board is not, unfortunately, an attractive wall hanging down at the local pub listing drink specials for the day. It is a government agency whose purpose is to control the production, transportation, sale, and consumption of alcoholic beverages within its jurisdiction. In other words, a liquor board is the equivalent of the booze police.

Most states refer to their entities as liquor control boards, with emphasis on the word “control.” In states where regulations are the tightest, these control boards can go so far as to regulate every drop of alcohol produced; be it wine, beer, or spirits.

Where did the idea of liquor boards come from?

Prior to Prohibition in the 1920s, liquor control boards were largely unheard of. Alcohol flowed freely from both professional and amateur manufacturers to supply the unwavering thirst of America’s drinkers. But once Prohibition kicked in, the entire industry was subject to change.

As the History Channel points out, there was an awful lot of money to be made on liquor during the 13-year period of Prohibition. When it came time to repeal the law, both federal and state governments knew they wanted a piece of the financial pie. Thus, liquor control boards were born.

Within a few years of the repeal of Prohibition, just about every state had its own board. Because the federal government had no authority to set up a federal board, they simply instituted their own control mechanism through the Alcohol and Tobacco Tax and Trade Bureau. Today, federal and state agencies seem to be nothing more than taxing authorities determined to maintain the flow of cash to government coffers.

Do liquor boards issue licenses to businesses?

One of the primary functions of the modern liquor board is to review license applications for businesses that want to serve or sell alcohol. In some states, like Colorado, the bureaucracy runs deep enough that individual cities have their own liquor boards in addition to the state board.

For example, the city of Boulder operates its own Beverage Licensing Authority for this very purpose. The five-member board meets once a month to discuss new applications and current license holders who might be subject to disciplinary action.

It’s kind of ironic to note that, whenever licensing of any type is required, lawbreakers are automatically created. Undoubtedly, there are large numbers of people making and/or selling alcoholic beverages without a license. It’s just part of what makes the human spirit what it is.

What does a liquor board look at when considering license applications?

Like everything at the state level, what liquor boards are looking at when reviewing license applications depends on individual state regulations. It’s generally accepted that they will be considering things like the age and criminal history of the applicant, the location of the business, and how alcohol will be dispensed.

Using New York as an example, applicants for liquor licenses must be 21 years of age, have no felony convictions, and not be a police officer with arresting authority. We’re kind of curious about that last requirement, but it is what it is.

It is true that some state liquor boards actually claim to own all alcohol produced?

It’s hard to believe in the Land of the Free and Home of the Brave, but there are currently 18 states that have enacted laws giving them a monopoly over all alcohol sales within their jurisdiction.

Known as “control states,” their various liquor boards maintain legal ownership over all alcoholic beverages and the distribution of those products. They license liquor stores, bars, restaurants, and more, to act on their behalf as distributors and retailers. The license holders earn money through sales commissions.

An example of a control state is the state of Maine. The Liquor Licensing & Compliance division of the Maine State Police is responsible for liquor licensing and enforcement. Things are so tightly controlled in the Pine Tree State that businesses need a license just to ship a couple of cases of wine. Prohibition may be long gone at the consumer level, but it’s still alive and well for businesses involved in the manufacture or sale of alcohol.

Are state liquor board positions elected or appointed?

Because state liquor control boards are regulatory agencies, board members are generally appointed by the governor. For those involved in the liquor business, the appointment process seems a lot like political cronyism designed to allow the governor to make and keep friends. Of course, the various states deny this.

The appointment of liquor board members in Arizona is typical of what you’d find in most states. Arizona has seven board members, all appointed by the governor and confirmed by the state Senate for terms of three years. Six of those seven members can have no direct or indirect involvement in the alcohol business.

So now you know all about state liquor boards. Hopefully, the knowledge helps you to understand how difficult it is for your local watering hole to conduct business unfettered. Liquor control boards see to that. But hey, at least Prohibition was done away with in 1933, right?