Last session the Legislators passed a new law expanding the allowable sale in the State of New York of ice cream and other frozen desserts. Frozen desserts can now be made with wine, beer or cider.
Because these desserts were removed from the definition of alcoholic beverages, it appears that on a state level they may distributed and sold without a license. To qualify the dessert must contain more than one-half of one percent and less than five percent alcohol by volume. A frozen dessert that has more than 5 percent alcohol by volume is still considered an adulterated food, the sale of which violates section 199-a of Agriculture and Markets Law.
Even qualified frozen deserts may not be sold unless, in the case of sales for off-premise consumption, each sealed package is received from the manufacturer or distributor and contains a label, approved by the commissioner of Agriculture and Markets, that prominently notifies the purchaser that (i) the sale to persons under twenty-one is prohibited, (ii) the product is made from wine (or beer or cider as the case may be) (iii) the package contains alcohol of up to 5% by volume, (iv) alcohol is used as a flavoring, (v) consumption while pregnant creates a risk of birth defects and (vi) consumption of alcohol impairs one’s ability to operate a car, machinery and may cause health problems. An approved warning sign must also be placed at each location where the frozen dessert is to be sold. In establishments offering these frozen desserts for consumption on the premise similar information must be placed on the printed menus or menu boards immediately adjacent to the listing of the items for sale.
Any person who manufactures or distributes these frozen desserts must include written notice that these requirements exist along with a copy of the requirements.
One final warning. Beverage alcohol is regulated on both a state and federal level. The TTB requires a manufacturer to submit a nonbeverage product formula and a sample of the ice cream to our Nonbeverage Products Lab for analysis to determine whether the product will be considered an alcoholic beverage. In general, the TTB has determined that ice cream products containing alcohol at or below 2% by weight are not beverages and do not come under its jurisdiction. However, depending on the characteristics of the frozen dessert product, it may be considered an alcohol beverage even if it has less than 2% alcohol. After such an analysis, the TTB may determine that ice cream and other frozen desserts with alcohol levels of 3 to 5 per cent are an alcoholic beverage. In that case, the TTB would require that the plant that manufacturers the product have the appropriate permits and that the products’ distributors have a basic wholesale permit. This would raise another interesting problem. A New York wholesalers are not permitted to engage in other businesses on its license premise. New York could find itself in a position in which licensed wholesalers are forbidden by state law from selling these desserts while federal law mandates that only wholesalers with federal basic permits may do so.
In order to make the sale of these desserts legal, the definition of “Alcoholic Beverage” in section 3 of the Alcoholic Beverage Law was amended to exclude certain ice cream and other frozen desserts. Interestingly, the manner in which the definition was amended only excludes these desserts if they are sold, delivered or given to a person aged twenty-one or older. This means that if the frozen dessert is given to an underage person, a charge of sale to a minor will still lie.
At the full board meeting of the New York State Liquor Authority held on July 11, 2018, the members voted to amend Advisory 2016-9 relating to sealed, prewrapped combination packages. Section 101-B 3(b) of the Alcoholic Beverage Control Law requires that prices posted, “in each instance, shall be individual for each item and not in “combination” with any other item.” The Members of the Authority have the power to grant variations from the statutory requirement, “for good cause shown and for reasons not inconsistent with the purpose of this chapter.” In Advisory 2016-9 the Members used that power to permit distributors to make combination packages consisting of wine and spirits from a single supplier provided that not more than one such package was sold in any month to any retailer and further provided that one such package was made available to any retailer that requested one. At the July 11th meeting, the Members voted to increase the number of such combination packages that a distributor could sell to a retailer in any month to two. Replacement Advisory 2018-3 is not intended to require a distributor to sell two such combination packages to each retailer. However, if the distributor elects to do so, it must be prepared to sell two to any retailer that orders two. Other types of combination packages are discussed in the advisory. The full advisory is available at https://www.sla.ny.gov/system/files/Advisory_2018-3_-_Sealed_pre-wrapped_packages.pdf.