"FOR SALE - Liquor License (Santa Cruz), $20,000".
This is easily the kind of classified ad one may find in any local
newspaper in Costa Rica. Disconcerting to many though it may be,
the fact is that under Costa Rican law this is not out-of-bounds.
The reason is fairly simple: the Statute regulating liquor sales
has been in force and virtually has remained unchanged for the last
75 years! In other words, the law is past its due date.
The small colonial townships, bucolic farmlands and extensive
coffee plantations, the oxcarts once driven by our
great-grandfathers in the 1930's are nowadays folkloric images
only visible in postcards and five colones bank notes sold to
tourists as souvenirs. Our country now has an open-to-the-world
economy, where tourism, ecology, services, technology and education
are what the rest of the world praises us for. Yet, our outdated
"Ley de Licores" still dictates –for instance-
what few liquor licenses may be granted in a given county.
And that's the issue right there: there is more demand for
liquor licenses, than there are to give, which causes anyone lucky
enough to hold one to actually enjoy a legally created type of
administrative privileged right, which some have compared to a
valuable commodity. So if John Doe "owns" a liquor
license, even if he does not run himself a business (restaurant,
bar, liquor or convenience store), he may lease out "his"
license and receive a monthly income therefrom, while a new
business will more than probably be forced to seek to buy or lease
one such licenses to sell alcoholic beverages in its establishment,
since the Municipality may not issue new ones. Absurd? Well, all
that is about to change...
Just a few weeks ago, the Costa Rican congress approved
–in first debate- a new piece of legislation to
substantially replace and bring up-to-date the old Liquor Law.
Among the most important features of this new law is that liquor
licenses are not a negotiable asset any more, and thus shall no
longer be sold, leased or transferred in any other way from its
original grantee to any third party. In fact, the prohibition also
applies to stockholders of corporations, as it prevents a licensed
entity to change its stock ownership in a way that would cause
control over the entity to change hands. The Bill, as it was
approved, erased from the law the limit of licenses that could be
issued (currently tied to the number of inhabitants in a given town
or district) and fully delegated upon the Municipalities the
determination of the number of licenses to be issued, however in
doing so they would need to be guided by principles of rationality
and proportionality, while also weighing economic development and
"social risk". Of course, the aim is primarily that only
operating businesses be licensed to sell alcoholic beverages and
that these will pay a fair portion of their revenue back to the
Municipality.
The Bill is still pending some revisions (requested by the
Constitutional Chamber) before it is finally approved in second
debate, which could take another few months. This process should
still somewhat alter the scope of power invested in local
governments regarding the unlimited issuance of licenses,
presumably by setting some sort of objective limit or defined
criteria.
Once it is approved though, what will happen to John Doe and his
"patente de licores"? He will still be entitled to it, if
he exploits a bar or other business, but may no longer transfer or
lease it and, eventually, will need to have it adjusted to the new
classification of business-related licenses.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.
Twitter
Facebook
Digg 
