Preparing to Sell Your Alcohol Business — Part I: Licensing
There are many reasons why you may be considering selling your alcohol business or brand. Sale could have been your desired outcome from day one, or it could be due to unforeseen circumstances or market conditions. Whatever your reason for selling, ensure your alcohol business is ready for sale before soliciting potential buyers. As alcohol is a highly regulated industry, sales of alcohol businesses require more due diligence for the buyer to evaluate your business as an acquisition target. Acknowledge this complexity and make your business more attractive to interested purchasers by cleaning up compliance shortcomings in advance of the sale and collecting organized regulatory information for the potential buyer’s due diligence team. This series of articles will address what your alcohol business should do to best position itself for acquisition.
Part I: Licensing
To evaluate your business’s alcohol regulatory compliance, as well as to evaluate compatibility with the buyer’s business model, the first thing a potential buyer’s due diligence team will request is a list of all your business’s alcohol licenses, permits, and registrations. First, this list should include your Alcohol and Tobacco Tax and Trade Bureau (TTB) permits. For example, if you are a producer, your business should be registered with the TTB as a Bonded Winery or a Distilled Spirits Plant, or hold a TTB-approved Brewer’s Notice. Importers and wholesalers must hold a TTB Basic Permit. There are also TTB registrations or permits for other activities, such as bottling, storage, or industrial alcohol. Your list of licenses should also include all licenses held in your home state to engage in alcohol production, importation, wholesale, or retail activity. If your business has multiple locations, you may have multiple home states where permits or licenses are required. Finally, the list should include any licenses held in secondary states for any sales of your products into those states, or other out-of-state operations, such as storage or salespeople.
This list should be evaluated and audited to ensure that your business holds all the necessary licenses and that there are no compliance gaps. Questions to consider include:
All Operations – You’ll want to consider whether the licenses held by the business cover all its production, storage, distribution, and sales operations. Engaging in multiple types of operations may require multiple sets of permits.
Owners & Officers – Is the ownership information on file with regulatory agencies correct? Are the listed officers up-to-date?
Multiple Locations – Does the business have permits or authorizations for every location where operations are conducted? Permits are typically location-specific, and it is rare for one permit to cover operations at multiple locations, though there are some limited exceptions from the TTB for noncontiguous locations operating under one permit. Thus, locations away from your main premises where alcohol is stored, where orders are fulfilled, or where sales are made, will likely require additional permits.
Expired Permits – Are all your permits active?
Diagrams – Are the diagrams on file with the TTB and the state alcohol regulatory agencies accurate?
Further, you should compile and evaluate your list of licenses and permits required from agencies other than alcohol beverage regulatory agencies. In addition to the typical state and local permitting required to operate a business of your type at your location, alcohol operations may require additional licenses from the Food & Drug Administration (FDA) or state agricultural agencies. There may be permits required from other agencies for your business’s transportation of alcoholic beverages. Some states may require special tax registration requirements for alcoholic beverage operations. Evaluate these licenses using the same considerations listed above: are the licenses current, accurate, and adequate?
The evaluation of your business’s alcohol licenses should also take into consideration what type of sale you are pursuing, and who your potential buyers may be. For example, you may only desire to sell only some of your assets, such as a single location or only certain brands, rather than your entire business. If you intend to pursue an asset sale rather than a stock sale, you will need to evaluate which licenses are necessary for the specific assets that you wish to sell, and should evaluate if your target buyers already have any of the necessary licenses. Also consider whether your business will have sufficient licensure for its ongoing operations post-sale, and whether the sale of some of your licenses may cause operational interruptions.
You should work with regulatory counsel during this process to assist in evaluating your licenses, as well as providing guidance on any necessary cleanup for any compliance issues that are discovered. It is best practice to get your licensing and compliance into the best shape possible. But, deciding whether compliance issues should be corrected depends upon the severity of the issue, the reason for the issue, the burden of making the correction, potential timing, your goals for the sale, and the type of buyers or deal structure you may be seeking. An alcohol regulatory attorney can help you sort through the compliance issues and work to put your business in the best possible position for soliciting buyers.
August 3, 2026
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