Trafficking of Alcoholic Beverages

Buying Alcoholic Beverages for Resale

Iowa's alcoholic beverages industry operates under a three-tier system - importer (manufacturer) to wholesaler to retailer. All liquor, wine and beer must be purchased through the three-tier system.

On-premises licensees (bars, restaurants, hotels, motels, etc.) must purchase the liquor, wine and beer that is resold in licensed establishments from the following sources:

• Liquor - from off-premises Class E liquor licensees (liquor stores, grocery stores, etc.).

Iowa Code sections §123.22 and §123.30(3)

• Wine - from Iowa-licensed wine wholesalers. On-premises licensees also may purchase limited quantities of wine (up to one case per brand per day) from off-premises Class E liquor licensees (liquor stores, grocery stores, etc.) who also are licensed to sell bottles of wine.

Iowa Code sections §123.30(3), §123.173, §123.177 and §123.178(3)

• Beer and wine coolers - from Iowa licensed beer wholesalers. No exceptions!

Iowa Code sections §123.123, §123.130 and §123.131

Note: Iowa law requires gambling boats, excursion boats and trains operating only within the state to observe the above requirements.

Iowa Code section §123.30(3)(d)(2)

Off-premises licensees (liquor stores, grocery stores, convenience stores, etc.) must purchase the liquor, wine and beer that is sold in licensed establishments from the following sources:

• Liquor - from the Iowa Alcoholic Beverages Division only. The Iowa Alcoholic Beverages Division is the sole wholesaler of liquor in Iowa.

Iowa Code sections §123.22 and §123.30(3)

• Wine - from Iowa-licensed wine wholesalers only. No exceptions!

Iowa Code sections §123.173, §123.177 and §123.178(3)

• Beer and wine coolers - from Iowa-licensed beer wholesalers only. No exceptions!

Iowa Code sections §123.130 and §123.132

Transfer of Alcoholic Beverages between Licensed Premises

Liquor, wine and beer inventory may not be transferred from one retail premises to another, even though the same person, partnership, corporation or association owns all of the premises.

Exceptions: Inventory may be transferred when the retail establishment from which the inventory is transferred has gone out of business and when the retail license is transferred from one location to another.

Iowa Code sections §123.22, §123.30(3), §123.123, §123.130, §123.131, §123.132, §123.173, §123.177 and §123.178(3)

Identifying Markers

All bottles of liquor must have an approved "Iowa Refund 5¢" marker. Iowa markers are displayed in one of the following manners:

• The words "Iowa Refund 5¢" printed or overprinted by the manufacturer on the main front label of the bottle.
• A serially numbered Iowa Alcoholic Beverages Division stamp on the front of the bottle where it is easily visible when the bottles sit on a shelf or in a "well."

The identifying markers are proof that the liquor was lawfully purchased in Iowa. Licensees may not purchase liquor, wine and beer outside of the state for resale in their licensed establishments. (See consumer importation limits.)

Iowa Code sections §123.21(7), §123.22 and §123.26

Storage of Alcoholic Beverages

Licensees must store all liquor, wine and beer inventory on the licensed premises. Under special circumstances, however, the Iowa Alcoholic Beverages Division may authorize licensees to store alcoholic beverages on premises other than those covered by the license. To obtain authorization, licensees must submit a written request detailing the special circumstances to the Division.

The Division grants such requests in writing. Letters of permission include a beginning and ending date for the off-premises storage. Letters of permission expire with the license and must be renewed if the off-premises storage is to continue beyond license expiration.

Note: Only those alcoholic beverages allowed by the license may be stored on the licensed premises.

Iowa Code section §123.21(9), and 185-4.31 Iowa Administrative Code

Vending Machines

Liquor, wine and beer may not be sold from a vending machine. No exceptions!

Iowa Code sections §123.21(3), §123.47, §123.49(1), §123.49(2), and 185-4.41 Iowa Administrative Code

Disposing of Inventory When Going Out of Business

Licensees who go out of business may dispose of their liquor, wine and beer inventory in one of the following manners. On-premises licensees (bars, restaurants, hotels, etc.) may:

• Sell unopened bottles of liquor, wine and beer to the new licensee who will operate at the same location.
• Return unopened bottles of liquor to the liquor store and unopened bottles of wine and beer to the wine and beer to the wine and beer wholesalers (if the liquor store and wholesalers consent to the return).
• Sell all liquor, wine and beer to another off-premises Class E liquor licensee.

When liquor, wine and beer inventory is sold to another Class E liquor licensee, the purchaser must take the entire inventory.

Iowa Code section §123.21(10), and 185-4.36 Iowa Administrative Code

Bootlegging

Selling liquor, wine, beer and other alcoholic beverages without a license is bootlegging. Whenever liquor, wine and beer are sold or the cost is recovered in any manner, a license is required. Bootlegging is a criminal offense (serious misdemeanor).

Note: The Iowa Alcoholic Beverages Division has jurisdiction over license holders (individuals, partnerships, corporations, associations) only. For example, the Division has no jurisdiction over individuals who sell alcoholic beverages without a license (such as party hosts who charge admission and serve alcoholic beverages) – even though such activities are a serious violation of Iowa’s liquor laws.

Iowa Code sections §123.59, §123.60 through §123.88 and §123.119