Arizona Alcoholic Beverage Market: Regulations, Statistics, Trends, and Wholesalers

Arizona presents a dynamic and rapidly growing alcohol market that reflects the state’s booming population and diverse consumer base. The Grand Canyon State operates under an open market system with a unique dual regulatory structure where the Arizona Department of Liquor Licenses and Control (DLLC) handles day-to-day regulation, licensing, and enforcement, while the independent Arizona State Liquor Board—appointed by the Governor—grants or denies licenses, hears appeals, and adopts rules.

Arizona had an approximate population of 7.4 million people in 2023, with 5.5 million within the legal drinking age bracket. The state ranks 16th in distilled spirits consumption and features a robust production landscape with over 60 distilleries, 150 wineries, and 120 breweries contributing to the market’s vibrancy and variety.

Another particularly distinctive feature of Arizona’s regulatory framework is its lottery system for awarding certain types of liquor licenses, such as those for bars and liquor stores.

We’ve prepared a guide to the Arizona market, which covers the following topics:

• Consumption trends
• The most popular alcohol categories
• Local guidelines

If you need help establishing your presence in Arizona, provide your information below, and we’ll contact you to share more on how we can help.

Consumption Trends In Arizona

In the five-year period from 2019-2023, spirits saw booming growth reaching +5.63% CAGR in that timeframe. Wine volumes saw more modest growth over the same period growing at +1.00% CAGR. In this timeframe, beer sales experienced a slump, with its CAGR declining -1.05%. For a full picture of the trajectory of beverage alcohol sales by category in Arizona, check out the charts featured below.

Arizona Spirits Consumption from 2019-2023 by 9-Liter Cases

Arizona Wine Consumption from 2019-2023 by 9-Liter Cases

Arizona Beer Consumption from 2019-2023 by 9-Liter Cases

Arizona State Alcohol Licensing

Arizona operates as an open state with the Arizona Department of Liquor Licenses and Control (DLLC) overseeing day-to-day operations, while the independent Arizona State Liquor Board handles licensing decisions and appeals. Arizona is not a franchise state, providing more flexibility in supplier-distributor relationships.

Common Licenses for Manufacturers in Arizona (h3)

Spirits

• Craft Distillery License – For in-state producers making up to 20,000 gallons of distilled spirits annually. This license allows both on- and off-premises sales, sampling, and limited self-distribution if annual production is less than 1,189 gallons.
• Distillery (Producer) License – Required if production exceeds the craft distillery limit.

Wine

• Farm Winery License – Required for in-state wineries that produce more than 200 gallons but less than 40,000 gallons of wine each year. This license allows wine production, tastings, on-site and off-site sales, and direct sales to consumers, with some volume restrictions.
• In-State Producer License – Needed for wineries that produce more than 40,000 gallons of wine per year. This license permits large-scale wine production and sales to wholesalers and, in some cases, on-premises sales.
• Direct Shipment License – Allows wineries to ship wine directly to Arizona consumers. Both in-state and out-of-state wineries with the proper federal and state permits can obtain this license, but in-state farm wineries producing 20,000 gallons or less annually may ship directly without it.

Beer

• Microbrewery License – Required for breweries in Arizona that produce more than 5,000 gallons and less than 6,240,000 gallons of beer per year. This license allows the brewery to manufacture beer, sell it for on-site and off-site consumption, distribute to Arizona-licensed wholesalers, and serve samples on the premises. If production does not exceed 1,240,000 gallons annually, the brewery may also sell and deliver beer directly to retail licensees.
• In-State Producer License – Needed if a brewery exceeds the production limits of the microbrewery license. This license permits large-scale production and broader distribution of beer, as well as the manufacture of other alcoholic beverages like wine and spirits.

Out-of-State Brand Requirements

Spirits

• Out-of-State Producer License – Spirits brands located outside Arizona need this license to sell their products to Arizona-licensed wholesalers. It does not grant retail sales privileges within the state.

Wine

• Out-of-State Producer License – Wine brands located outside Arizona need this license to sell their products to Arizona-licensed wholesalers. This license does not allow for direct retail sales within the state.
• Out-of-State Farm Winery License – For out-of-state wineries producing at least 200 but not more than 40,000 gallons of wine per year. It allows the winery to sell and deliver wine to Arizona liquor-licensed wholesalers. Wineries producing up to 20,000 gallons per year may also qualify for expanded privileges.
• Limited Out-of-State Winery License – Allows out-of-state wineries to sell and deliver up to 240 gallons of wine produced on their premises to Arizona liquor-licensed wholesalers.

Beer

• Out-of-State Producer License – Out-of-state beer brands must obtain this non-transferable license to legally ship beer to Arizona liquor-licensed wholesalers. All beer must be delivered to an Arizona-licensed wholesaler before reaching retailers or consumers.
• Out-of-State Microbrewery License – If the out-of-state beer brand is a microbrewery producing more than 5,000 gallons and less than 6,240,000 gallons of beer annually, this specific license is required.

Arizona State Alcohol Regulations

Price Posting in Arizona

Distilled spirits are required by law to be priced at affirmation. Price posting is not required at this time; however, under the law, the Director of the Department of Liquor Licenses & Control may require a producer or supplier to file an affirmation statement verifying prices and any discounts in effect.

Brand/Label Registration Requirements

Labels must be in conformity with all federal requirements.

Direct-to-Consumer Sales and Delivery

Wine

• Out-of-State Farm Winery License holders may make consumer sales under specific conditions:
  • Wineries producing more than 20,000 gallons and up to 40,000 gallons annually may make consumer sales only at the winery (on-site sales).
  • Wineries producing 20,000 gallons or less annually may make sales and deliveries of wine that it produces to consumers off the licensed premises.
• Direct Shipment License may be issued to any winery that holds a federal basic permit and a current license to produce wine issued by Arizona or any other state.

Spirits

• Out-of-State Craft Distillery License (Series 2D) allows out-of-state craft distilleries producing not more than 20,000 gallons per year to sell distilled spirits to both Arizona wholesalers and consumers for consumption on or off the premises.

Beer

• Limited direct-to-consumer options exist primarily through on-premises sales at licensed breweries.

Retailer Delivery

Arizona offers comprehensive delivery options for retail licensees:

• Bar licensees may deliver beer, wine, distilled spirits, and mixed cocktails.
• Liquor store licensees may deliver beer, wine, distilled spirits, and mixed cocktails.
• Beer and wine bar licensees may deliver beer and wine.
• Beer and wine store licensees may deliver beer and wine.
• Restaurant licensees may deliver various alcoholic beverages under specific permit conditions, including mixed cocktails with food purchases and original manufacturer containers under certain lease arrangements.

Arizona Spirits Volume Sales By Category – 2023 Data

Spirit trends in Arizona by volume and dollar sales in 2023.

Source: Beverage Information Group

Arizona Beer Volume Sales By Category – 2023 Data

Beer trends in Arizona by volume and dollar sales in 2023.

Source: Beverage Information Group

Arizona Wine Volume Sales By Category – 2023 Data

Wine trends in Arizona by volume and dollar sales in 2023.

Source: Beverage Information Group

Alcoholic Beverage Distributors Located In Arizona

In the United States, we operate under the three-tier system. The middle tier refers to distributors within the industry. Middle-tier sells products to retailers after the manufacturers and producers have sold the product to the wholesalers and importers.

Wine & Spirits Distributors in Arizona

Selling Alcohol In Arizona

Below is a collection of frequently asked questions about off-premise and on-premise sales. If you have any more questions, please do not hesitate to contact our staff.

FAQs on Arizona Beer, Wine & Spirits Sales

Buying Alcohol In Arizona – Hours, Locations & Taxes

Here are some of the most commonly asked questions about purchasing beer, wine, and spirits in AZ.

FAQs on Buying Beer, Wine & Liquor in Arizona

(Data Sources – azdirect.az.gov, en.wikipedia.org)

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