Ask the Experts: What are the Regulations Around Non Alcoholic Beverages?

By: Kelly Allen | Adkison Need, Allen & Rentrop PLLC

Q:  Nonalcoholic beverages are trending among customers. What do I need to know about regulations and licenses to sell nonalcoholic beverages at my establishment?
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A: Data shows that younger generations are drinking less beer and other alcoholic beverages and are instead opting for more nonalcoholic (“NA”) options. Because of this trend, many manufacturers have produced products which are nonalcoholic in nature. These products are fun, flavorful, and popular.
However, nonalcoholic beer and other nonalcoholic beverage products are nonetheless regulated by the Michigan Liquor Control Commission (“MLCC”) depending on the alcohol content and the process in manufacturing. Plus, age restrictions do apply.
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​Non-Alcoholic Wine & Spirits 
NA wine and spirit products that contain less than 0.5% alcohol by volume (“ABV”) are not regulated by the MLCC under the Michigan Liquor Control Code (“Code”). Therefore, the sale of these products does not require a license to manufacture, distribute, sell or serve. Since these products are not regulated by the MLCC, there are no age restrictions to purchase these products.
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On the other hand, wine and spirit products containing 0.5% or more ABV are regulated products that must be manufactured, distributed, sold, and served by businesses that are licensed by the MLCC. One must be 21 years of age to purchase and consume wine and spirits that meet this ABV threshold. 
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Non Alcoholic Beer & Seltzers
Beer is a different animal. The definition of beer in the Michigan Liquor Code includes NA beer containing less than 0.5% ABV. Beer is defined as a beverage obtained by alcoholic fermentation of an infusion of barley, malt, hops, sugar, or other cereal in potable water that contains less than 0.5% ABV, including a beverage that contains zero alcohol.  Beer is also referred to as a “cereal beverage.”  A retailer must have a liquor license to sell NA beer. Further, if the NA beer is a cereal beverage, it may only be sold to people 18 years of age or older regardless of alcohol content. The age restriction is found in the Michigan Penal Code.
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Seltzer, if manufactured through the brewing of sugar, even though it contains less than 0.5% ABV, is similarly regulated by the MLCC such that retailers must have a liquor license.  Again, the age requirement is 18. 
There is a distinction regarding the sale of NA beer or seltzer which is made without alcoholic fermentation. These products can be sold by retailers without liquor licenses.  Therefore, there are no age restrictions; any person can legally purchase NA beer or seltzer made in this way.
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Other Non-Alcoholic Notes
If you are a licensed retailer, you should take care when selling NA products, as not all NA products can be sold to people under 18. And even while the law does allow 18-year-olds to buy NA beer, many retailers cut down on confusion by adopting internal policies that require customers to be at least 21 to purchase anything with “beer” or “wine” in the name. 

Confused?  Here is a cheat sheet:

• Age restricted products: 
  • NA beer and wine labeled “non-alcoholic” that contain less than 0.5% ABV can only be sold to persons 18 years of age or older.  Retailers must have a liquor license to sell.
  • Alcoholic liquor: any beverage containing 0.5% ABV or more is strictly prohibited for anyone under 21.  Retailers must have a liquor license to sell.
• Minors can freely purchase any beverages that are not fermented or derived from alcoholic products, including soft drinks, mocktails (made from juices and sodas); and NA spirits, like botanical tonics that contain 0.0% ABV and are not classified as NA beer or NA wine.  Retailers do not need a liquor license to sell these products. 

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