HB 4403: Liquor: other; leasing, selling, and transferring portions of certain alternating proprietors under approval of commission; allow. Amends secs. 105 & 603 of 1998 PA 58 (MCL 436.1105 & 436.1603). - Michigan

As Passed by the Senate → House Concurred Bill · 5 edits

MODERATE

This bill updates the Michigan Liquor Control Code to add new definitions for emerging alcohol products like 'alcohol vapor devices' and 'mixed spirit drinks.' It also introduces a new 'alternating proprietorship' model allowing different manufacturers to share production space and equipment. Additionally, the bill clarifies rules regarding financial interests between suppliers, wholesalers, and retailers, and establishes specific exemptions for small distillers and brewpubs.

Scope change

The bill expands the scope of the Liquor Control Code to include new categories of alcohol products and business arrangements that were previously undefined or unregulated under the existing statute.

DEFINITION

Added definitions for 'alcohol vapor device,' 'alternating proprietorship,' 'approved tasting room,' 'authorized distribution agent,' 'bar,' 'brand extension,' 'brandy manufacturer,' 'brewpub,' and 'private label' to modernize the code for new products and business models.

ELIGIBILITY

Created a new 'alternating proprietorship' eligibility allowing two or more manufacturers (wine, beer, spirits, or mixed spirits) to take turns using the same space and equipment to manufacture products.

REQUIREMENT

Modified conflict-of-interest rules by adding new subsections that prohibit suppliers and wholesalers from having financial interests in other vendors, while creating specific exceptions for brandy manufacturers selling in restaurants and small distillers selling on their licensed premises.

Added a new requirement that all licensees must be separated into three distinct tiers (supplier, wholesaler, and retailer), with specific rules preventing cross-tier ownership and defining exceptions for private label manufacturing.

Added a restriction preventing a person licensed in the supplier tier from collectively delivering wine with other wine makers to retailers.

As Passed by the House → As Passed by the Senate · 5 edits · Aug 13, 2025

MODERATE

This bill updates the Michigan Liquor Control Code to introduce new definitions for emerging alcohol products like 'alcohol vapor devices' and 'mixed spirit drinks.' It also establishes a formal legal framework for 'alternating proprietorship,' allowing multiple small producers to share manufacturing space and equipment. Additionally, the bill clarifies rules regarding private label production, restricts cross-tier ownership between suppliers, wholesalers, and retailers, and creates specific exemptions for small distillers and brewpubs to sell their products on-site.

Scope change

The bill expands the regulatory scope to include new types of alcohol consumption devices and shared manufacturing arrangements, while tightening restrictions on vertical integration between different tiers of the alcohol supply chain.

DEFINITION

Added definitions for 'alcohol vapor device,' 'alternating proprietorship,' 'approved tasting room,' 'authorized distribution agent,' 'bar,' 'brand extension,' 'brandy manufacturer,' 'brewpub,' 'bottle,' and 'private label' to modernize the code.

ELIGIBILITY

Formalized 'alternating proprietorship' as a legal arrangement allowing multiple small wine makers, brewers, distillers, or mixed spirit manufacturers to share space and equipment.

REQUIREMENT

Added new restrictions preventing suppliers, wholesalers, and retailers from holding licenses in other tiers, with specific exceptions for brewpubs and on-site restaurants.

Introduced rules allowing suppliers to manufacture private label products for retailers, provided specific distribution and registration requirements are met.

Granted the commission authority to approve alternating proprietorship operations and specific sales arrangements for small distillers and brandy manufacturers.

House Introduced Bill → As Passed by the House · 6 edits · Jun 26, 2025

MODERATE

This bill updates the Michigan Liquor Control Code to modernize definitions for new products like alcohol vapor devices and clarify rules for small-scale producers. It introduces a new 'alternating proprietorship' category allowing multiple small businesses to share manufacturing space and equipment under federal guidelines. The legislation also expands the ability of brewpubs to own other brewpubs and adds specific exemptions for brandy manufacturers and small distillers to sell their products in restaurants.

Scope change

The bill expands the scope of regulated activities to include alcohol vapor devices and clarifies the regulatory treatment of small-scale producers sharing facilities.

DEFINITION

Added a new definition for 'alcohol vapor device' to regulate equipment that creates inhalable alcohol mist.

Added a new definition for 'alternating proprietorship' to legally recognize arrangements where multiple small producers share manufacturing space and equipment.

Added a new definition for 'private label' to clarify when a supplier manufactures products using a retailer's recipe or intellectual property.

REQUIREMENT

Modified the rules for brewpubs to allow them to own up to five other brewpubs, provided the combined production does not exceed 18,000 barrels per year.

Added new restrictions preventing manufacturers from having an interest in wholesalers and prohibiting wine makers from collectively delivering wine to retailers.

ELIGIBILITY

Added exemptions allowing brandy manufacturers and small distillers to sell their products in restaurants they own or operate under commission approval.

Liquor: other; leasing, selling, and transferring portions of certain alternating proprietors under approval of commission; allow. Amends secs. 105 & 603 of 1998 PA 58 (MCL 436.1105 & 436.1603).

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