Prohibition of the sale or transfer of alcoholic liquor in this state; exceptions; applicability of section to nonalcoholic ingredients.

(1) A manufacturer shall not sell or transfer alcoholic liquor to a licensed manufacturer in this state except as provided in subsections (2) and (3). (2) Notwithstanding any provision in this act to the contrary, a manufacturer may sell or transfer wine or spirits to a licensed manufacturer, and a licensed manufacturer may purchase or receive wine or spirits, under any of the following conditions: (a) For a sale or transfer of wine: (i) The selling or transferring manufacturer is a wine maker, small wine maker, or out-of-state entity that is the substantial equivalent of a wine maker or small wine maker and is selling or transferring the wine to a wine maker, small wine maker, or out-of-state entity that is the substantial equivalent of a wine maker or small wine maker. (ii) The purchasing or receiving wine maker or small wine maker manufactures wine at its licensed premises or the purchasing or receiving small wine maker bottles wine at its licensed premises. (b) For a sale or transfer of spirits: (i) The selling or transferring manufacturer is a distiller, small distiller, or out-of-state entity that is the substantial equivalent of a distiller or small distiller and is selling or transferring the spirits to a distiller, small distiller, or out-of-state entity that is the substantial equivalent of a distiller or small distiller. (ii) The purchasing or receiving distiller or small distiller manufactures spirits at their licensed premises. (3) A wine maker, small wine maker, distiller, or small distiller may not sell alcoholic liquor purchased or received under this section unless 1 of the following conditions is met: (a) The purchasing or receiving manufacturer modifies the purchased or received alcoholic liquor by performing a portion of the manufacturing process as described in section 109(1). (b) The purchasing or receiving small wine maker bottles the purchased or received wine. (c) The purchasing or receiving wine maker or small wine maker is selling a shiner on which the wine maker or small wine maker has placed a label under section 111(10). (4) This section does not prevent a manufacturer from selling, purchasing, or receiving nonalcoholic ingredients to or from another manufacturer.