Legality to get contract brewing beer business

982 votes

Two questions-

Can you provide that the activity will be Delhi based or outside Delhi? Secondly, are you in any case, talking about micro brewery here?

I understand that you intend to outsource a part of your beer business to a third party. That third party will brew the beer for you but you will retain the IPR on it. Also you will have the sole rights of marketing and/or distributing the same. If my understanding is correct, then in this case, from a legal stand point, you should have the following-

(1) a services agreement with the brewer- The agreement will have terms stating that the brewer must hold a valid excise license. The agreement will have restrictions stating that the brewer shall not brew bear for sale to public.

(2) Apart from this, there are other requirements relating to the equipments being used, fitness certificate for the quality of the beer produced etc. The obligations to procure these will be on the brewer and the contract will cover that.

(3) For sale of beer in Delhi, apart from adhering with other conditions, you will have to procure L-12 and L-12 F license . However, I can confirm this once I know the State in which you intend to do the business.

Advocate Mansi Airi Gambhir LawRato

745 votes

There are many organisations who are not into the manufacturing of the actual products which they sell out in the market.
They get it done by the manufacturing organisations which are known in the business market as OEM (Original Equipment Manufacturer). For e.g. all the electronic companies which are into the business of producing and selling out the laptops are getting their laptops manufactured in China while they have their corporate seat at back in America. Be it HP, Apple, Lenovo or anyone else.
So if you are planning to do get your breweries manufactured at some different plants (OEM) while you taking care of labeling, marketing, branding etc. then it is possible and allowed at both fronts business as well as legal.
As far as duty, permit and licences are concerned then any comment can be made on the same only in case I have the complete papers of your business structure at my table.

Advocate Pulkit Prakash LawRato

766 votes

We understand your concern given the market for breweries is highly regulated, keeping the legal compliances in check is the only way to have a successfull business going.

We understand that u want to start a microbrewery with the element of contract brewing, for which at the outset there are number of licenses that you will have to take from the State Government. This will be of the nature of brewpub license/microbrewery [nomenclature may differ from state to state].

Alcohol being a State subject requires that every State has its own approvals and you will need to follow them as and when you expand your business to other states separately.

Please note that every state had its own set of policy and licenses and to analyse the same for your business and suggest possible legal structures, we will need to know the commercial structure that you want to establish (for example, resto bar etc.) and also which state/states you are targeting.

We will be glad to get on a quick call to understand your requirements and help you set this up soon.

Advocate Bhoomika Choudhury LawRato