You’ve been in the biz for a long time. Started as a bar back, then bartender, manager and now you’re running your own show. You know the rules of the game…at least you think you do.
This is the first time you ordered too low. You’re embarrassed but you need to get it done so you head to the nearby liquor store to buy one case of vodka as cover until the order comes in. You know it’s illegal but you need to fill the rail. You scan the shelves looking for value. There it is the vodka with the stores name on the label. Her own brand…how does she do it you wonder…this can’t be right.
Welcome to the world of the private label. Buried in the Florida statutes, lies an exception that blurs the lines of the Beverage Law. The language of the statutory provisions states “nothing in this section shall prohibit the ownership by vendors of any brand, brand name or label of alcoholic beverage.”
Exceptions to laws are not uncommon. Almost always though, these statutory exceptions are further defined by other statutory exceptions. The Florida private label exception is no exception. Confusing? You bet.
Private label laws have multiple complex requirements requiring an analysis of the structure of the business(s) entities involved in the transaction, the sales terms between producer and private label owner (including contract drafting and analysis to ensure compliance). Often times, matters of trademark come into play and the potential to take a private label brand into the broad market, beyond the exclusive shelf of the retail licensee. Analysis of both federal and state(s) laws are sometimes required if the private label owner’s business model requires.
Private label product presents a unique profit center for retail licensees in terms of increased margins, promotion of the retail venue, and in some instances represents a true brand building exercise that translates to volume sales.
The structure of the private label deal must fit within the legal exceptions, with all its complexities, to withstand regulatory scrutiny. So, the caveat is, proceed with caution, create a legally complaint business structure, rely on the experts and then rest easy while reaping the rewards of brand ownership.