Alternating Proprietorships

An "alternating proprietorship" is a term used to describe an arrangement in which two or more people take turns using the physical premises of a brewery or winery. It is an effective method for an existing brewer or winemaker to use excess capacity of the brewery or winery and for an up-and-coming brewer or winemaker to get started without having to sink costs into space, equipment, and even personnel.

Generally, the existing brewer or winery, the "host," agrees to rent space, equipment, and even personnel to a new "tenant." The tenant qualifies as a brewer or winemaker by obtaining licensure with the California Department of Alcoholic Bevarage Control and filing the appropriate documents with the U.S. Department of Treasury, Alcohol and Tobacco, Tax, and Trade Bureau (TTB). 

The tenant has title to the beer and wine at all stages of the brewing process. This means it is responsible for maintaining appropriate records, labelling and certificate of label approval, and paying appropriate taxes. This is different than a "contract brewing" or "custom crush" arrangement, in which one person, such as a wholesale or retail dealer pays a brewing company or winery, the “contract" brewer or winery, to produce beer or wine for him or her. In that situation, the "host" still is considered the brewer of the beer or winemaker, and maintains all rights and responsibilities of the beer or wine throughout the beermaking or winemaking process. For more information on distinguishing the two arrangements, please review TTB Industry Circular 2005-2