A bottle store owner is approached by a local restaurant that’s run short of wine ahead of a busy weekend. Can the store simply sell them a few cases? In most cases, no. Not under an ordinary off-consumption licence. Selling to other licensed businesses is a different activity in law, and it requires its own licence.
Retail licences are for selling to the public, not the trade
An off-consumption licence (the standard bottle store licence) authorises you to sell liquor to members of the public, for consumption away from your premises. It doesn’t automatically authorise trade-to-trade sales: selling stock on to a restaurant, hotel, tavern, or another bottle store that will resell or serve it.
The reason for the distinction is regulatory, not commercial: retail licensing controls sales to consumers, while distribution and wholesale licensing controls the supply chain that feeds licensed businesses. The two are treated as separate tiers of the liquor industry, each with its own compliance and reporting obligations.
The licence you actually need: distribution
If you want to regularly supply other liquor licence holders, restaurants, bars, hotels, other bottle stores, or venues, you need a Distribution Liquor Licence (sometimes called a wholesale licence). This licence specifically permits selling liquor to holders of retail liquor licences, whether you approach them directly or they buy from you through a website, price list, or account system.
A distribution licence:
- Allows sales to other licence holders only, not to the general public. A pure distribution licence holder can’t sell over the counter to a walk-in customer the way a bottle store can.
- Can be held alongside an existing off-consumption licence, letting a bottle store add a legitimate trade-supply arm to its business, provided the distribution activity is properly licensed in its own right.
- Can also support export sales, where liquor is sold on to buyers outside South Africa.
There’s a nuance worth flagging: if you take ownership of liquor before reselling it to another licence holder, you need a distribution licence. If you’re purely acting as an agent, introducing buyer and seller and earning a commission without ever owning the stock, the distribution licence requirement generally doesn’t apply in the same way. That distinction is worth confirming for your specific business model.
Why this matters more than it might seem
Selling to the trade without the correct licence is treated the same way as trading without any liquor licence at all. Both the National Liquor Act 59 of 2003 (which governs distribution and manufacturing) and the applicable provincial Act treat unlicensed sales as a criminal matter. Penalties include fines and, in serious cases, imprisonment, along with the risk to your existing retail licence if the liquor board takes issue with how your business is operating.
For growing bottle stores, breweries, and wine producers, this is also a business opportunity worth doing properly. Supplying restaurants, guesthouses, and other venues can be a strong, steady revenue channel, but only once the right licence is in place to support it.
Getting the right combination of licences
Many businesses in the liquor trade end up needing more than one licence category. An off-consumption licence for walk-in customers plus a distribution licence for trade supply, for example. It’s worth mapping out your full trading model before you apply. Applying for the wrong category, or missing a second licence you’ll need down the line, is one of the most common and costly mistakes in this space.
If you’re a bottle store, brewery, or wine estate in the Western Cape looking to legally supply restaurants, hotels, or other licence holders, Vincent Bergh Liquor Law & Business Consulting can advise on the correct licence combination for your business and manage the application process from start to finish.
This article is for general information and does not constitute legal advice. Speak to a liquor law specialist about your specific trading model before supplying other licence holders.
