Michigan, Liquor, and the Law
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The Basic Premise
      In a three-tier system, there are three tiers involved in the movement of alcoholic beverages from the manufacturer to the consumer.  First, the suppliers manufacture or import the alcoholic beverage.  Then, the supplier sells the alcohol to a wholesaler.  The wholesaler then sells alcohol to retailers (bars, stores, etc) who will resell to the consumers.  In most situations, the law requires adherence to the three-tier model.
     
    In certain situations, brewers, distillers, and winemakers can sell directly to consumers from a specific location.  This is discussed in greater detail below.
  
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Michigan's Three Tier System
Michigan's Control Model
     As a control state, Michigan has, by law, granted the Michigan Liquor Control Commission all power over the wholesaling of hard liquor ("spirits").  Although Michigan privatized warehousing and distribution of spirits, the MLCC retains complete control over the sale of these items.  

For suppliers, this means that all spirits must initially be sold to the state, and then distributed through an "authorized distribution agent."
 
For retail licensees, this means that the:
      - Wholesale price of spirits is fixed by MLCC
      - Minimum "off-premise" shelf price is fixed by MLCC
      - Ordering of spirits must be made through MLCC

Relationships Between the Three Tiers
In general, the three tiers "cannot mix."  
The general rules and exceptions are outlined below.
General Rules
1. A retailer may not hold, directly or indirectly, a license in the wholesaler or    
     supplier tier
2. A wholesaler may not hold, directly or indirectly, a license in the retailer or 
     supplier tier 
3. A supplier may not hold, directly or indirectly, a license in the wholesaler or 
     retailer tier

Furthermore:
1. A manufacturer cannot have any interest, directly or indirectly, in a 
     wholesaler.
2. A wine maker cannot collectively deliver wine, with another wine maker, to a 
     retailer
3. A manufacturer, warehouser, wholesaler, outstate seller of beer, outstate 
     seller of wine, outstate seller of mixed spirit drink, or vendor of spirits 
     cannot:
         - Have any financial interest, directly or indirectly, in the establishment, 
            maintenance,  operation, or promotion of the business of any other 
            vendor.
        - Have an interest by ownership (include as landlord or mortgagee),          
           directly or indirectly, in the establishment, maintenance, operation, or 
           promotion of the business of any other vendor
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Exceptions*
1. A brewpub may sell its own beer for consumption on or off the licensed premises.
2. A microbrewer may sell the beer it produces to consumers at the licensed brewery premises for consumption on or off the premises
3. A brewer may sell the beer it produces to consumers for consumption on the licensed premises at no more than one of its licensed premises
4. A wine maker may sell wine it produces to consumers on the licensed premises
5. A wine maker may sell wine made by that wine maker in a restaurant for on or off-premises consumption if the restaurant is owned by the winemaker or operated by another person under an agreement approved by the Commission and located on the premises where the wine maker is licensed.
6.  A small distiller may sell to consumers at the licensed premises for consumption on or off the premises.
7. A brandy manufacturer or small distiller may sell brandy or spirits made by that manufacturer or distiller in a restaurant for consumption on or off the premises if the restaurant is owned by the manufacturer or distiller or operated by another person under an agreement and is located on the the premises where the brandy manufacturer or small distiller is located.

*Note that the exceptions are not always "clear cut."  If you believe an exception applies, consult an attorney, or review the statutes and rules.
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The materials on this site are provided purely for informational purposes and are not legal advice. These materials are intended, but not promised or guaranteed, to be correct, complete, and current. This site is not intended to be a source of legal advice. Therefore, the reader should not consider this information an invitation for an attorney-client relationship. Readers should always seek the advice of competent counsel.
(c) 2012, Stariha & Brower, PLC
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Michigan Liquor Law dot com, a site devoted to understanding Michigan Liquor Laws.  We answer questions about  Michigan liquor licenses, the Michigan Liquor Control COmmission, liquor license applications, and more.