Carefree’s festival liquor licenses under investigation
By Linda Bentley | January 13, 2010
CAREFREE – Last week, an Arizona Department of Liquor Licenses and Control (ADLLC) investigator, acting on a citizen’s complaint, paid a visit to the town of Carefree to determine exactly how the town’s special event permits for its wine and art festivals were set up.
Arizona’s liquor laws and licensing requirements are rather specific and it appears these festivals that have been regular events in Carefree’s business district have been in violation for quite some time.
State statute allows for nonprofit organizations to obtain a Series 15 special event liquor license to sell “spirituous liquor” at festivals and fairs, provided at least 25 percent of the profits go to the nonprofit organization.
During a town council meeting late last year, action items regarding a number of wine and art festival special event liquor licenses had Councilman Doug Stavoe questioning if those selling wine at the event were paying sales tax.
Town Clerk Betsy Wise advised council that domestic farm wineries were exempt and the only wine growers represented at the festivals are from Arizona.
As more questions were asked, Wise then explained wine was not actually being sold at these events. It is given away, except for the bottles of wine sold by the domestic farm wineries.
Wise said they only sell the wine glasses. The person then takes his wine glass to the various booths to sample the wares of the various wineries.
According to state statute, “With the permission of fair organizers, any domestic farm winery is authorized to allow sampling of domestic farm winery products on the fair premises, the sale of such products for consumption on the fair premises and the sale of such products in original containers for consumption off of the fair premises at any sanctioned county or state fair. The fee for a domestic farm winery fair license is fifteen dollars for each event.”
Statute also says it is unlawful for “a distiller, vintner, brewer or wholesaler knowingly to sell, dispose of or give spirituous liquor to any person other than a licensee except in sampling wares as may be necessary in the ordinary course of business, except in donating spirituous liquor to a nonprofit organization which has obtained a special event license for the purpose of charitable fund raising activities …”
Now the way Carefree has been sanctioning and recommending approval of these licenses is by having the Carefree/Cave Creek Chamber of Commerce, as the nonprofit organization, obtain a Series 15 special event license to designate the entire festival grounds as the licensed premises for consumption of alcoholic beverages.
The problem is the chamber is not engaged in the sale of alcohol at the event.
Meanwhile, domestic farm wineries obtain their own wine festival licenses, allowing for the tasting and sales of their spirituous wares.
According to ADLLC Sgt. Wes Kuhl, the premises for the Series 15 and Series 16 licenses may not overlap.
In other words, the domestic farm wineries would be required to keep the sampling of their product within the boundaries of their booth.
If the chamber were selling alcohol rather than wine glasses, then it could allow for consumption throughout the fair grounds, except in the domestic farm wineries’ booths.
However, in order for the chamber to sell the wine, the wine would have to be donated.
The chamber has been obtaining Series 15 liquor licenses, not for the purpose of selling alcohol but rather for the purpose of permitting alcohol to be consumed throughout the festival grounds, in violation of state statute.
Although Carefree has allowed these art and wine festivals to operate in violation of statute for some time, Kuhl said the ADLLC has no way of knowing these things until it is brought to the agency’s attention.
The town’s special event liquor license application does not provide enough detail to reveal the noncompliant setup.
Considering the short notice, Kuhl said the investigator provided Wise with a couple of options, on which he did not elaborate to Sonoran News, to bring this weekend’s festival into compliance and would be checking in over the weekend.