Distribution Liquor Licence for a Microbrewery
Before you scroll down, consider this - Can you think of any liquor store which has closed permanently? No? This gives you some idea of the value, potential and permanency of a liquor store liquor licence. It’s worthwhile persevering to get a Distribution licence and to hold onto your Distribution licence once you have it.
A. BASIC INFORMATION ON A DISTRIBUTION LICENCE
- HOW TO APPLY (GET) A DISTRIBUTION LIQUOR LICENCE = LIQUOR LICENCE APPLICATION
- HOW TO RENEW (KEEP) A DISTRIBUTION LIQUOR LICENCE = YEARLY RENEWAL
- HOW TO BUY OR SELL A DISTRIBUTION LIQUOR LICENCE = LIQUOR LICENCE TRANSFER
- COST OF A DISTRIBUTION LIQUOR LICENCE
- DISTRIBUTION LIQUOR LICENCE TRADING HOURS
HOW TO APPLY (“GET”) A DISTRIBUTION LICENCE = LIQUOR LICENCE APPLICATION
You must submit a comprehensive, written application to the Liquor Board in the province in which the brewery premises is located. You will have to include information, zoning documents, photos and detailed plans of your proposed Distribution premises. You need to show the licensing authorities what you have in mind. This means proving that there is a demand from the public for a liquor distribution business in South Africa. They can only visualize your liquor store if your application is professional, detailed and accurate. If not, your application will be postponed or refused. The NLA liquor inspector will submit a report after an inspection
Read more on the Distribution licence application process below.
HOW TO RENEW (“KEEP”) A DISTRIBUTION LICENCE = PROTECT YOUR LICENCE
Once you have your Distribution licence, you need to do everything you can to keep it valid. You do this by renewing it every 12 months, which is done by way of a formal application. You have to submit a renewal application with supporting documents each year.
Important to remember :
- Strict timelines apply.
- Failure to submit in time can be disastrous and may cost you your business.
Protect your business and Play it safe – appoint us to handle your licence renewal. Subscribe to our most popular service! Ensure your licence remains valid and keeps on generating a profit.
HOW TO BUY OR SELL A DISTRIBUTION LICENCE = LIQUOR LICENCE TRANSFER
Want to start distributing liquor immediately? Then you should consider buying a distribution licence. You can distribute liquor legally while waiting for the distribution liquor licence to be transferred to you.
However, be warned! You must always check the licensing documents. Why? You won’t be able to sell any liquor if the licence documents aren’t ok. Don't run the risk of being stopped by liquor authorities for trading with an invalid liquor licence. Do a licence compliance check - it's like having your dentist fix the small holes to avoid the root canal treatment! The most important items to check are :
- Agreement of Sale – The correct wording of the liquor licence clause is very important
- Licence documents – Is the original liquor licence, conditions and floor plan available?
- Licence renewal – Is the proof of payment of the yearly liquor licence renewal fee on file?
- Premises - Does the premises comply to liquor laws and regulation?
FREE Liquor licence compliance check :
- Has this been done? Are you sure all licensing documents are complete, available on file and up to date? Don’t take any chances or you may lose your investment.
- Upload any of these documents and we will do a compliance check - free of charge (Normal value = R3000).
ORDER licence documents :
- You can order any licensing documents you want from us, such as a original licence replacement or floor plan.
- Place your order and we'll be in touch.
COST OF A DISTRIBUTION LICENCE
The cost structure of a Distribution licence is quite simple. It costs can be described as follows :
- Cost to Apply ("Get") a Distribution licence
- Liquor Board Fees - You'll have to them the following fees :
- Application Fee - to accept your application
- Licence issuing fee - to issue your licence
- Liquor licence consultant's fee
- Liquor Board Fees - You'll have to them the following fees :
- Cost to Renew (“Keep”) a Distribution licence valid
- Licence renewal fee - payable every 12 months,
- Penalties / Fines - payable if you paid late or failed to enforce the licence conditions
DISTRIBUTION LICENCE TRADING HOURS
Distribution licence trading hours are determined nationally and are the same in all 9 provinces.
NB - A Distribution licence owner needs to know the liquor trading hours for a Distribution licence at all times. If not, chances are good to get fined or having to pay penalties or - even lose the business.
Contact Us if you want to know the liquor trading hours for your area. Even better – subscribe to our free newsletter and you’ll be updated on import liquor licensing matters.
B. WANT TO KNOW MORE ABOUT A DISTRIBUTION LIQUOR LICENCE?
- WHY DOES A BUSINESS LIKE A BREWERY NEED A DISTRIBUTION LIQUOR LICENCE?
- WHAT CAN YOU DO WITH A DISTRIBUTION LIQUOR LICENCE?
- DIFFERENT KINDS OF DISTRIBUTION LIQUOR LICENCE
- TARGET MARKET
- INCOME GENERATOR
- RUNNING COST OF A DISTRIBUTION LIQUOR LICENCE
- COST OF BUYING OR SELLING A DISTRIBUTION LIQUOR LICENCE
- LICENCE COMPLIANCE AUDIT – A MUST
WHY DOES A BUSINESS LIKE A BREWERY – NEED A DISTRIBUTION LIQUOR LICENCE?
It’s quite simple –
- A retail liquor seller may only sell directly to the public, only to other licence holders.
- A wholesale liquor seller may only sell to other liquor licence holders, such as restaurants, pubs, distributions, liquor stores etc.
- If you want to sell liquor to restaurant and other retail liquor sellers, you need to apply for a Distribution Liquor Licence. Therefore, if you already hold an off consumption liquor licence (i.e. liquor store) or manufacture liquor (brewery), there are excellent commercial opportunities to explore - IF you have a Distribution Liquor Licence.
WHAT CAN A BREWERY DO WITH A DISTRIBUTION LICENCE?
You can market your liquor products to other holders of retail liquor licences –
- Locally (in South Africa) or
- Overseas (Export to Africa, Europe, USA, China, etc)
- directly on a 1 – to – 1 basis (“look them in the eye!”), or
- online via a website, email, etc.
GOOD INDICATORS OF WHEN TO START A LIQUOR DISTRIBUTION BUSINESSES
There may be a good business opportunity to distribute liquor in your area – if the following factors are present :
- Lack of Distributors in an area (often rural areas), or
- Large Distributors aren’t interested in delivering small orders to residential customers,
- Liquor exports can be arranged directly from liquor producers, like wine farms, breweries or distilleries
DIFFERENT KINDS OF A LIQUOR DISTRIBUTION BUSINESSES
Brewery Liquor Distributors can be found in all sizes and locations. The basic options are the following :
- GroupDistribution licence. You can become a brewer for one of the larger, national or international breweries, such as AB Inbev, Distelle, etc. The main advantages are that you get -
- a proven, successful business model with capital, and
- competitive edge due to the buying power of the group.
- Independently owned Distribution licence. You are your own boss and have the power to decide how you would like to manage every aspect of your business.
- Stand alone – your Distribution licence is contained in its own property, not connected to other shops. There are affordable options – Contact Us to discuss.
- Drive-through – your client stops his/her verhicle, pays and receives the liquor ordered without having to get out of the vehicle (very popular due to Covid19)
- Shopping centre – the Brewery Distribution business is very visible in a shopping centre, where it shares parking, toilets, security and other services with a large mix of other businesses
TARGET MARKET OF A BREWERY DISTRIBUTION BUSINESS
The target market of a Brewery looking to distribute liquor is any holder of a retail liquor licence, such as the holder of a liquor licence for a liquor store, supermarket, deli, restaurant, hotel, coffee shop, lodge, guesthouse, B&B, etc. Remember - a Distribution Licence holder cannot sell liquor directly to the public.
A DISTRIBUTION LICENCE AS AN INCOME GENERATOR FOR A BREWERY
A Distribution licence can be an excellent income generator for a brewery as it is versatile and allows you to sell liquor in a number of ways -
- deliver on order, as well as/or
- export to overseas liquor licence holders, and/or
- through an online e-commerce liquor store.
To discuss additional options, don’t hesitate to Contact Us
RUNNING COST OF A DISTRIBUTION LICENCE
A Distribution licence’s running cost is some of the cheapest of all licences. Some Distribution Licence Holders have large storage premises, which can be costly. However, a liquor distributor, such as most microbreweries can also operate from a very small premises. The great thing therefore is that overheads costs are very predictable with little or no unpleasant surprises, making planning extremely easy, as well as keeping to a budget.
Contact Us to discuss affordable ways to operate a distribution liquor licence over the long term.
COST OF BUYING A DISTRIBUTION LICENCE
This is always an option, especially for a microbrewery who is growing fast and doesn’t have the time to wait for the 3 – 6 month period required for the approval of a Distribution Licence. Good news - there’s a Distribution licence to be found for everyone’s budget. The asking price is usually directly related to its –
- turnover (total value of all sales), and/or
- nett profit (what you take home)
Depending on your personal circumstances and budget, it may be the right option for your and your microbrewing business to buy a Distribution licence. Contact Us – we should be able to refer you to a seller or we’ll refer you to reputable business broker in your area.
LICENCE COMPLIANCE AUDIT – AN ABSOLUTE MUST!
All licence holders – those with a licence or those thinking about applying for a liquor licence – must have a Licence Compliance Audit done. Why? Apart from being very convenient, it gives -
- a clear picture of the requirements to get a liquor licence and
- clear guidelines on how to keep a liquor licence valid.
More importantly – getting up to date licensing information is the best way of ensuring you won’t be fined or face legal action. Talk to us about checking if a licence is valid and compliant. You cannot afford not to! – customized for your business and premises.