Introduction
When you’re buying or selling a winery, one of the most common questions I hear is: “What happens to the wine inventory and licenses in the sale? Do Bulk Sale laws apply?”
The short answer is: Bulk Sale compliance does not apply to wine inventory or alcohol licenses. Instead, these assets are governed by state and federal regulators. Understanding how these transfers work is critical for a smooth escrow and closing.
Bulk Sale Law vs. Alcohol Regulations
The Bulk Sale Law was originally created to protect creditors when a business sells off a significant portion of its assets. But alcohol inventory and licenses are not covered by Bulk Sale compliance.
Instead, they are regulated separately by:
- The Alcoholic Beverage Control (ABC) at the state level.
- The Alcohol and Tobacco Tax and Trade Bureau (TTB) at the federal level.
This means that even if the sale is exempt from Bulk Sale requirements, you must still follow ABC and TTB processes to transfer licenses and permits.
How Transfers Really Work
1. ABC License (State-Level)
- The buyer must apply to the state ABC for transfer of the seller’s license.
- A 30-day public notice is posted at the premises.
- ABC reviews background checks, zoning, and qualifications.
- Once approved, the license can be transferred through escrow.
Typical timeline: 60–90 days.
2. TTB Permits (Federal-Level)
- TTB permits (such as a Basic Permit or Wine Producer’s Notice) cannot be transferred.
- The buyer must apply for new permits.
- In some cases, TTB allows “successor” operations under the seller’s permit while the buyer’s is pending.
Typical timeline: 60–120 days (sometimes longer).
3. Wine Inventory
- Wine inventory is included in the PSA and assigned a valuation method (case goods, bulk wine, bottled wine).
- At closing, inventory transfers via Bill of Sale.
- The buyer may store the wine immediately, but cannot sell it until their ABC license and TTB permits are active.
Escrow and Closing Process
Escrow ensures compliance and protects both parties by:
- Holding funds until ABC approvals are finalized.
- Managing the wine inventory transfer paperwork.
- Releasing funds once regulatory conditions are met.
This coordination keeps the transaction moving while preventing unauthorized sales of wine during the transition.
Conclusion
While the Bulk Sale Law doesn’t apply to wine inventory or alcohol licenses, that doesn’t mean the process is simple. Buyers and sellers must plan ahead for:
- ABC license transfers (state approval).
- TTB permit applications (federal approval).
- Inventory transfer through escrow (with limits on when it can be sold).
Pro Tip: Start the ABC and TTB processes as early as possible in your escrow timeline. This avoids delays and ensures that by the time the deal closes, the wine can legally flow under the new owner
