"FOR SALE - Liquor License (Santa Cruz), $20,000". This is easily the kind of classified ad one may find in any local newspaper in Costa Rica. Disconcerting to many though it may be, the fact is that under Costa Rican law this is not out-of-bounds. The reason is fairly simple: the Statute regulating liquor sales has been in force and virtually has remained unchanged for the last 75 years! In other words, the law is past its due date.
The small colonial townships, bucolic farmlands and extensive coffee plantations, the oxcarts once driven by our great-grandfathers in the 1930's are nowadays folkloric images only visible in postcards and five colones bank notes sold to tourists as souvenirs. Our country now has an open-to-the-world economy, where tourism, ecology, services, technology and education are what the rest of the world praises us for. Yet, our outdated "Ley de Licores" still dictates –for instance- what few liquor licenses may be granted in a given county.
And that's the issue right there: there is more demand for liquor licenses, than there are to give, which causes anyone lucky enough to hold one to actually enjoy a legally created type of administrative privileged right, which some have compared to a valuable commodity. So if John Doe "owns" a liquor license, even if he does not run himself a business (restaurant, bar, liquor or convenience store), he may lease out "his" license and receive a monthly income therefrom, while a new business will more than probably be forced to seek to buy or lease one such licenses to sell alcoholic beverages in its establishment, since the Municipality may not issue new ones. Absurd? Well, all that is about to change...
Just a few weeks ago, the Costa Rican congress approved –in first debate- a new piece of legislation to substantially replace and bring up-to-date the old Liquor Law. Among the most important features of this new law is that liquor licenses are not a negotiable asset any more, and thus shall no longer be sold, leased or transferred in any other way from its original grantee to any third party. In fact, the prohibition also applies to stockholders of corporations, as it prevents a licensed entity to change its stock ownership in a way that would cause control over the entity to change hands. The Bill, as it was approved, erased from the law the limit of licenses that could be issued (currently tied to the number of inhabitants in a given town or district) and fully delegated upon the Municipalities the determination of the number of licenses to be issued, however in doing so they would need to be guided by principles of rationality and proportionality, while also weighing economic development and "social risk". Of course, the aim is primarily that only operating businesses be licensed to sell alcoholic beverages and that these will pay a fair portion of their revenue back to the Municipality.
The Bill is still pending some revisions (requested by the Constitutional Chamber) before it is finally approved in second debate, which could take another few months. This process should still somewhat alter the scope of power invested in local governments regarding the unlimited issuance of licenses, presumably by setting some sort of objective limit or defined criteria.
Once it is approved though, what will happen to John Doe and his "patente de licores"? He will still be entitled to it, if he exploits a bar or other business, but may no longer transfer or lease it and, eventually, will need to have it adjusted to the new classification of business-related licenses.
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