The alcohol beverage business is one of the most heavily regulated industries in America. A wide variety of enterprises engage in the retail sale of alcohol beverages, including hotels, restaurants, bars, nightclubs, golf courses, fraternal organizations, private clubs, gas stations, convenience stores, amusement parks, public sports arenas, theaters, dance halls, museums, and universities. Yet, they all have one thing in common: from the smallest mom & pop grocery store to the largest publicly-held hotel chain, each business must be licensed properly by the appropriate governmental agency before it can sell alcohol.
Alcohol licensing is especially complex. For one thing, every state in America has its own laws and regulations governing the production, marketing, sale, and consumption of alcohol within its borders. Consequently, the licensing process in Alabama is different from the licensing process in Wyoming.
To complicate matters further, alcohol regulators will not issue a license until the applicant has been investigated thoroughly. The investigatory process usually requires that each individual applicant seeking an alcohol license must be fingerprinted, and must execute a notarized affidavit that provides extensive information about the applicant's personal history, finances, and moral character. For applicants other than individuals (e.g. a corporation), most states require fingerprints and personal questionnaires from each of the applicant's officers, directors, and shareholders.
Why Do State Governments Impose These Burdensome Requirements, Even On Senior Executives For Established, Legitimate Corporations?
THE ANSWER comes from the history of alcohol in America. In the early years of the American Republic, the retail alcohol trade was conducted in taverns and inns. Vendors were independent of one another, and were never organized to promote alcohol sales on a collective basis. After the Civil War, however, industrialization and large investors appeared on the scene to foster expansion within the alcohol industry. During the last half of the Nineteenth Century, many inns and taverns were replaced by saloons, reflecting a shift in emphasis; the business of selling alcohol superseded the business of selling food and hospitality. Competition became fierce among the large producers, and the independent retailer virtually disappeared from the American marketplace by the late 1800s; in his place was the notorious "tied-house."
Under the tied-house system, the saloonkeeper became an agent of the manufacturer and/or the wholesaler, who selected the site, provided the license, advanced the capital, and held the mortgage. Approximately 75 percent of America's saloons were owned or controlled at one time by beverage alcohol manufacturers or wholesalers. Under pressure from alcohol producers to push products, retailers soon introduced billiards, pool tables, cards, and free lunches s a means of attracting patrons. Some unscrupulous retailers pursued other measures as a means of attracting business. Across the country, saloons were accused of harboring and encouraging prostitution, as well as promoting corrupt politics, poverty, wrecked homes and even insanity.
Not surprisingly, the rise of saloons and tied-houses produced cries from social reformers for public temperance. Nationally recognized figures, such as Carrie A. Nation, targeted the alcohol industry as the bane of America, and demanded that the country go dry. By 1917, Congress passed legislation authorizing an amendment to the U.S. Constitution prohibiting the sale of alcohol. Thirteen months later, the Eighteenth Amendment - creating Prohibition - was approved by a greater number, and a larger percentage, of the states than any of the previous 17 amendments to the Constitution.
History ultimately demonstrated that the principles of outspoken temperance advocates were no match for the reality of the public's thirst. America's taste for alcohol actually grew during Prohibition. More disturbing, the "Noble Experiment" gave rise to a network of criminals, engaged in smuggling, rum running, hijacking, illegal distilling and brewing, and a host of other maladies. This network was not only criminal in nature, but was accruing substantial wealth in the process.
With the advent of the Great Depression, America and its government fell on very hard times. People began to look back with nostalgia to the days when the government collected great sums in taxes on beverage alcohol; Prohibition had ended that. People were drinking as much as ever, perhaps more, but all the money was going into the pockets of the gangsters. The federal government was widely perceived as squandering scarce resources trying to enforce unenforceable laws.
This is how Prohibition came to be repealed. In return for the states' agreement to ratify the Twenty-first Amendment to the U.S. Constitution, President Roosevelt promised that the federal government would return much of the responsibility for regulating alcohol back to the states. Consequently, Prohibition ended in 1933, and state governments across America immediately created regulatory bureaucracies to control how alcohol beverages were produced, transported, marketed, sold, and consumed within their borders. To this day, every state has its own government agency responsible for regulating the alcohol industry. This is why license applications and the manner in which they are processed differ from state-to-state.
What About The Fingerprints And Personal Questionnaires?
State governments were determined to make sure that the criminal elements who controlled the alcohol industry during Prohibition were completely purged from the industry, and not allowed to return. Every state instituted rigorous controls over who could qualify for an alcohol license. Additionally, each state legislated tied-house evil" laws to prevent alcohol producers and wholesalers from gaining undue influence or control over the retail tier of the industry.
Fingerprint cards, notarized personal questionnaires, and similar application requirements are the tools that alcohol regulators use to make sure that convicted felons, recognized members of organized crime, and those of "inappropriate moral character" are excluded from the alcohol industry. Regulators are adamant and vigorous in carrying out their responsibilities. From their perspective, it makes no difference whether the applicant is the sole owner of a corner grocery, or the CEO of a multi-national corporation that is acquiring the finest hotel in town. In each and every instance, regulators are compelled to obtain the necessary filings, disclosures, and information before they will process an alcohol license application.
If you have been asked to submit fingerprints, or to provide detailed information about your personal background for a notarized questionnaire, don't blame the company employee or service provider who is asking for your assistance. These are unavoidable requirements imposed by government as prerequisites to obtaining alcohol licenses. For better or worse, these burdens are part of the price that must be paid in order to participate in one of the most heavily regulated businesses in America - the alcohol industry.
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.