Expert View: Protecting Your Alcohol License

Five steps every c-store owner should take to protect their business

David Jaffer, Managing Director, The Hilliard Firm

H. Hakim Hilliard, Founding Partner, The Hilliard Firm

convenience store beer cave

ATLANTA -- Your alcohol license is an intangible business asset of your convenience store. Therefore, it stands to reason that as a business owner, you must exercise care in protecting that license. In many states, an alcohol license is considered a valued business asset and is bought and sold for thousands of dollars. In Georgia, my home turf, an alcohol license is nontransferable and is issued to a licensee for a specific location.

Consider what would happen if your business lost the ability to sell alcohol. For a package store, it would mean the beginning of the end. For a c-store to exist without an alcohol license, it must be at a great location to get by without alcohol sales. Otherwise it will likely not survive this competitive disadvantage in the c-store arena. So the ability to sell alcohol is essential to c-store operators and a key contributor to the company’s bottom line.

Like many states, Georgia considers an alcohol license to be a privilege for the licensee; thus, it is subject to being revoked or annulled by state and local authorities when the licensee fails to follow responsible alcohol sales practice. Alcohol sales are heavily regulated by federal, state and local authorities. The government attempts to strike a balance between allowing alcohol to be consumed responsibly by adults and avoiding the negative consequences that result from overconsumption of alcohol or consumption by the underage population.

According to the U.S. Department of Justice “Alcohol and Crime” report, a majority of criminal offenders were under the influence at the time they committed their crimes. Due to the increase in fatalities involving drunk drivers, underage drinking and criminal behavior involving overconsumption of alcohol, local officials have increased penalties for those overserving or furnishing alcohol to the underage individuals in their jurisdiction.

As a practical matter, consider the thousands of dollars in fines, along with the possibility of license suspension, legal fees, negative public attention to the business and a loss of revenue that will likely result from failing a single compliance check.

An alcohol violation citation affects the licensee and exposes the employee cited for compliance-check violation to criminal repercussions and monitory sanctions. This could also lead to operational disruptions. Although in the past the license was not generally suspended upon first due-cause violation, this may not hold true in the future. Local political leaders are under pressure from their constituents and communities to impose stronger penalties for alcohol code violations.

Licensees must understand and embrace the rules and regulations that govern alcohol sales in their jurisdiction. After all, it is the store owner's livelihood that is at stake. As the saying goes: If not you, then who? If not now, then when? The optimal time to create a plan and implement an effective compliance strategy for responsible alcohol sales and to protect your alcohol license is before you are cited or sued.

The best way to protect against this liability is to institute a sound alcohol compliance plan. Take these five basic yet fundamental steps to create a sound alcohol compliance plan.

1. Become familiar with the laws that govern your license.

2. Have a written store policy that deals specifically with responsible alcohol sales and communicate this policy to your employees.

3. Provide responsible alcohol sales training to your staff and have them certified as responsible vendors.

4. Monitor your employees by engaging mystery shoppers to assure compliance.

5. Plan for the unexpected. In the event that your store is cited for illegal sale of alcohol, obtain legal counsel to deal with this matter.

A licensee who can demonstrate the steps listed above stands to gain a much better outcome resulting from failing a compliance check or from a lawsuit under dram-shop liability than a licensee who is simply asking for mercy after the fact.

The rules and regulations that govern alcohol sales continue to change and evolve. If your livelihood depends on your c-store business, then you must protect yourself with proper planning for your business.

By David Jaffer, Managing Director, The Hilliard Firm
View More Articles By David Jaffer
By H. Hakim Hilliard, Founding Partner, The Hilliard Firm
View More Articles By H. Hakim Hilliard