As a distributor am I permitted to give glassware to a retailer if my supplier gives me the glassware free of charge?

No. According to Section 6-6 of the Liquor Control Act, no manufacturer or distributor may “directly or indirectly, sell, supply, furnish, give or pay for, or loan or lease, any furnishing, fixture or equipment on the premises of a place of business of another licensee authorized under this Act to sell alcoholic liquor at retail….”  

Section 6-6 (iv) also states: “…however, such items, for example, as coasters, trays, napkins, glassware and cups shall not be deemed to be inside signs or advertising materials and may only be sold to retailers.”

Can Manufacturer or Distributor Offer a Discount that Offers Beer at 1₵?

If a consumer buys 3 cases of brand X beer, for example, the consumer receives the fourth case at 1₵. The Commission interprets this type of discount to be in violation of Rule 100.280 Giving Away of Alcoholic Liquors.  

 The Rule states: “a) No licensee, individual, partnership or corporation shall give away any alcoholic liquor for commercial purposes or in connection with the sale of non-alcoholic products or to promote the sale of non-alcoholic products….”

 Depending on the licensee which is advertising such a promotion, manufacturer or distributor, such licensee may be cited and receive disciplinary action by the Commission. In addition, any retailer that advertises this type of promotion is also subject to the same disciplinary action.

What constitutes a permanent sign versus a temporary sign?

There are four sign categories outdoor permanent, outdoor temporary, indoor permanent and indoor temporary signs.

Outdoor permanent signs are made of any permanent material such as glass, wood, wrapping material (such as on ice machines and fuel pumps) and metal. If you display an outdoor permanent sign you may only have one sign per brand. Outdoor signs do not include signs that are painted or placed on windows inside the establishment or in areas referred to as beer gardens.  In these examples they would be considered inside signs. At no time may these signs be retailer-specific which includes the retailer name, logo, or trademark. Permanent outdoor signs may not exceed $2,369 per manufacturer (2016). The cost limitation is exclusive of erection installation, repair, maintenance and permit fees. Additionally, permanent signs include painted signs on exterior walls, windows, etc.

Outdoor temporary signs are made of any temporary material such as paper, cardboard, and vinyl. These include banners, posters, pole signs, flags and pennants. Again, you may only display one outdoor sign per brand. However, two signs displayed back to back that are attached to a pole or fence is considered one sign provided that the signs after being attached are in some way touching. At no time may these signs be retailer-specific, which includes the retailer name, logo, or trademark.

Indoor permanent signs are generally neons, mirrors, lighting fixtures, etc. These signs also include decals which are placed on mirrors, doors, and windows. Regardless of the ease of removing the decal from the mirror, door, and window (scraping or peeling the item off the door on signs made of cling plastic) the Commission considers these signs to be permanent in nature. At no time may these signs be retailer-specific which includes the retailer name, logo, or trademark. Permanent Indoor Signs may not exceed $5,308 per manufacturer (2016).

Indoor temporary signs, like the outdoor temporary signs, are made of paper, cardboard and vinyl. These include banners, posters, table tents, streamers but also include lighted chalk boards (due to the changing of daily messages), acrylic table tent beverage or appetizer list holders, bowling sheets (if they still make those), sports schedules, etc. These are the only signs that may be retailer-specific. This is due to the fact that the Commission recognizes that there is no value added since the patron is already in the establishment. Temporary Indoor Signs may not exceed $867 per manufacturer (2016).

Signs do not include: coasters, trays, napkins, cups and glassware. These items may only be sold to a retailer. Should the retailer purchase any of these items, it is highly recommended that the retailer secure the receipt for these items for inspection purposes. All signs except temporary indoor signs require the manufacture’s identity either by name, brand, logo, etc. In addition, units of government are excluded from certain of value limitations.

I realize that we are limited to a certain dollar limit for signs to be displayed at a retailer’s premises. What are the dollar limits again?

Each year a “cost adjustment factor” is used to update the signage dollar limits prescribed in Section 6-6 of the Liquor Control Act. The “cost adjustment factor” means a percentage equal to the change in the Bureau of Labor Statistics Consumer Price index or 5%, whichever is greater. Since 1997 the dollar limits have been significantly increased.

Dollar limits for signage (2016):

  • Permanent Outside Signs = $2,369.27 per brand (1997 amount $893)
  • Permanent Inside Signs = $5,308.19 per manufacturer (1997 amount $2,000)
  • Temporary Inside Signs = $867.21 per manufacturer (1997 amount $325)
  • Temporary Outside Signs = No dollar limit as you may only display one sign per brand

The General Assembly broke signage into 4 categories the mid-90’s (permanent outdoor, temporary outdoor, permanent inside, and temporary inside signs).

 OUTDOOR PERMANENT SIGN:

·         1 per brand

·         Shall only bear manufacturer’s name, logo, brand, symbol, etc.

·         Can include: cold beer, on tap, packaged liquor, etc.

·         Made of permanent materials (wood, glass, metal, mirrors, neon, or other materials reasonably considered to be of a substantially permanent nature).

·         Also includes signs painted on outside walls.

·         Signs attached to the outside of a window are considered outside signs.

·         Signs attached to the inside of a window are considered inside signs.

·         Brands that appear on an outdoor permanent sign may only have 1 temporary sign. In the example above, only 1 Old Style banner may be displayed.

·         MAY NOT BE RETAIL SPECIFIC

·         Must not exceed $2,369 per brand

OUTDOOR TEMPORARY SIGN:

·         1 per brand

·         Includes banners, flags, pennants, streamers and other items of a temporary and non-permanent nature.

·         Must include the manufacturer’s name, brand, trade name, slogan, markings, trademark, or other symbol commonly associated with identifying the product.

·         Signs MAY include the product, price, packaging, date or dates of a promotion and an announcement of a retail licensee’s event if the sign is intended to advertise the product and the event and promotion are simultaneous. STATE LAW DOES NOT REQUIRE OUTDOOR TEMPORARY SIGNS INCLUDE A PRICE!

·         May include, community goodwill expressions, regional sporting event announcements, or seasonal messages. All examples above would be acceptable.

·         There is no limit on the number of times a logo may appear on 1 sign.

·         If two brands are represented on 1 temporary outdoor sign – both brands are not eligible for another temporary outdoor sign.

·         A two-sided banner, flag, pennant, poster, or streamer displaying the brand name on both sides is considered 1 outdoor temporary sign.

·         A multiple sided or wrap around sign or signs affixed to a pole, fence, or other stationary object displaying the same brand on both sides is considered 1 sign.

·         MAY NOT BE RETAIL SPECIFIC

PERMANENT INSIDE SIGN:

·         Unlimited (must not exceed the dollar limit)

·         Made of permanent materials (wood, glass, metal, mirrors, neon, or other materials reasonably considered to be of a substantially permanent nature)

·         Includes neons, lamps, clocks, lamps, mirrors, tap handles, decals, etc.

·         Must include the manufacturer’s name, brand, trade name, slogan, etc.

·         Permanent signs in a beer garden are inside signs

·         MAY NOT BE RETAIL SPECIFIC

·         Must not exceed $5,308 per manufacturer

·         Menus and alcohol lists are permanent inside signs – these MAY be retailer specific

TEMPORARY INSIDE SIGN:

·         Unlimited (must not exceed the dollar limit)

·         Includes lighted chalk boards, acrylic table tent beverage or hors d’oeuvres list holders, banners, banners, flags, pennants, streamers, posters, placards, bowling sheets, table tents, inserts for acrylic table tent holders, sport schedules, etc.

·         DOES NOT INCLUDE: coasters, trays, napkins, glassware and cups. These items MAY ONLY BE SOLD to a retailer.

·         Must include the manufacturer’s name, brand, trade name, slogan, markings, trademark, or other symbol commonly associated with identifying the product.

·         Temporary Inside Signs MAY be retail specific

Must not exceed $867 per manufacturer

A retailer would like some glassware. They would like our logo and their logo placed on the glasses. Is it legal for us to split the cost with the retailer for the glassware?

According to Section 6-6 of the Liquor Control Act, distributors must charge retailers for glassware; therefore, the retailer will have to assume the full cost of the glassware. If the retailer purchases the glassware they can have any logo they wish placed on the glassware. The retailer would be responsible for any additional costs for placing a logo on the glassware.  In order to prevent any potential disciplinary action by the Liquor Control Commission, it is highly recommended that retailers retain copies of their receipts for all items purchased from a distributor.

Can beer distributors take credit cards as payment for beer?

No – Accepting a credit card for beer payment by a retailer violates the Cash Beer Law.  Section 100.90 of the Liquor Control Commission’s Rules and Regulations only permits the following transactions for “cash” payment. Note: Debit cards may be accepted.

 

“Payment in cash by the retail licensee shall mean payment in legal tender as provided by the United States Code, checks (including certified checks, cashier's checks, teller's checks or traveler's checks), debit cards, drafts and electronic transfer of funds, provided the transfer of funds is initiated by an irrevocable payment order on or before the date payment is due.”

 

Can a Special Use Retailer return unused, untapped beer after an event?

There are two classifications of events:  1) those sponsored by a not-for-profit organization (special event licensee) and, 2) those sponsored by a licensed retailer (special use).  The Commission has no objection if a distributor accepts a return of product for credit if the product is sold to a Special Event license holder OR a Special Use license holder.   In order to accept a return, the product must have been originally invoiced to the Special Event or Special Use license numbers.  These license numbers begin with the designation of “4A”, “4B” or “4C”.  The product cannot be returned if invoiced to a Retailer license number designated “1A”.  Special Event and Special Use retail licenses are issued to temporary and limited events and thus are considered “Seasonal Dealers” for the purposes of permitting returns.    

For clarification purposes this would include but is not limited to the following types of events:

  • Community festivals put on by groups such as the Jaycees
  • Music festivals
  • Church socials
  • Motorcycle Club Festivals, etc.

The Commission has determined that the return of product for special events/special use events (retailer sponsored events) does not constitute a consignment sale and is not in violation of the Cash Beer Law found in Section 6-5 of the Liquor Control Act. 

For events such as a wedding, graduation party, neighborhood block party, etc. where purchases of alcoholic liquor are made from a licensed retailer (“1A” licensee) credit may not be given to a retailer for the unused, untapped products.  The only time a distributor may give credit for these types of events is if the retailer holds a Caterer’s license and the purchase was originally invoiced to the Caterer.  A caterer’s license number begins with the designation of “1B.”  Again, at no time may a distributor credit a retailer “1A” for unused, untapped products.

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