Third Party Providers Revisited

In July of last year this site included a post discussing the issue of third party providers, such as e-commerce and internet platforms that facilitate the purchase of alcoholic beverages at restaurants or package stores. The issue presented was whether such third party providers, or TTP’s, were considered trafficking in the sale of alcoholic beverages under New York law such that they would be required to obtain a license. Our July 2018 post noted a number of rulings made by the New York State Liquor Authority on the issue, which some commentators argued were inconsistent. On August 12, 2019, the SLA issued a draft Advisory #2019-x addressing this issue. The proposed Advisory would allow TTP’s to be paid a flat fee for its services, or to be paid 10% or less of the licensee’s profits, without requiring the TTP to be licensed. If a TTP is receiving more than 10% of the licensee’s profits, or exercised some level of control over the licensee’s business, then it would have to be licensed, or it would be considered illegally availing itself of someone else’s license. This proposed Advisory would apply to management companies, landlords, delivery services, website hosts, and some other third parties.  The SLA is inviting comments from the public and the industry before it finalizes this Advisory.