Day and Pacheco Outline Legal Considerations for ‘Joint Tasting Rooms’ and Shared Spaces

Litigator and alcoholic beverage attorney Corey Day and corporate attorney Craig Pacheco contributed an article to Artisan Spirit Magazine titled “Café Culture: Considerations for Joint Tasting Rooms and Shared Spaces,” published Summer 2021. The article discusses some legal considerations for businesses operating “joint tasting rooms,” in which a distillery teams up with another licensed producer to share a consumption space, either at the distillery itself or at an off-site location, and shared spaces, in which producers share outdoor spaces such as sidewalks and streets where consumers can taste and buy their wares.

Communal spaces near clusters of craft producers emerged as an economical way for the businesses to share resources and continue to serve their customers during the pandemic. Many of the spaces were not officially permitted for such use, nor were clear rules established to provide for accountability where multiple licensees were involved, but a few states have enacted laws to provide clarity in these matters.

In Washington, bills have been passed extending relaxed regulations for on-premises establishments until July 2023 and creating a blueprint for joint tasting rooms. Under the regulations implementing the new law for joint tasting rooms, licensees will be jointly responsible for any violation or enforcement issues, unless the issue can be shown solely or in part to be due to one or more licensees’ specific conduct or action.

Day and Pacheco provide suggestions for licensees for provisions to include in a contract for sharing a space:

• Include indemnification language, in which each party agrees that if a claim arises that may have been caused by a given party, that party will be responsible for the defense of the other party and for any potential liability incurred.
• Specify that each party carry a certain minimum amount of insurance to cover the shared space, with the other party listed as an additional insured.
• Clearly identify which party is responsible for which aspects of upkeep of the space or whether one party pays the other a specific rate for the maintenance.

The authors conclude: “In summary, a communal space may be perfect for bringing in more customers, but with everything else you do in your business, think about potential liability and consult a lawyer.”