Can a distributor offer “end of the month” discounts?

For example, is it legal to give a retailer $1.00 off per case if the retailer sells 300 cases by the month’s end?

The Liquor Control Commission permits end of the month (EOM) and end of the year (EOY) discounts.  However, The Commission will not allow these discounts on a volume discount.  If the distributor offers an EOM or EOY discount, the distributor may not offer an initial discount on the beer sold.  In the example given to us by the distributor, the Commission would not permit a volume discount for ordering 300 cases of beer and then offer another EOM or EOY discount because the retailer reached the goal of selling 300 cases.  The Commission has stated only one discount is permitted – No “double discounts.”

What if a large chain retailer refuses to pay the distributorship’s fuel surcharge?

The Illinois Liquor Control Commission has clarified a few of the guidelines regarding Invoice Service Charges (ISC) (which includes fuel surcharges).  Please familiarize yourself with these guidelines.

• It is required that all ISC’s, if any, applied by a distributor be applied to all retailers without discrimination.  The Commission has clarified that if an ISC is charged by the distributor, the ISC must be applied to all retailers regardless of where the retailer is located or whether the retailer is on-premises or off-premises. 
• Invoices must identify the ISC and the amount of the ISC applied in a line item.  All invoices must explicitly state, in legible print, that a failure to pay an end of the month ISC bill will result in an “of value” violation imposed by the Illinois Liquor Control Commission. 
• The distributor shall have the obligation to report to the ILCC any failure by a retailer to pay an ISC on or before the day of the next delivery after the delinquency has occurred.
• There is no reporting requirement if the distributor collects the full amount of a past due ISC invoice upon the next delivery date.
• If the distributor does not report the failure of a retailer to pay a past due ISC and continues to deliver beer to that retailer, the ILCC will assess “of value” violations against distributor and retailer.

 If you are unable to follow these guidelines, it is highly recommended that you do not charge any retailer an ISC. Otherwise you and the retailer will face disciplinary action.

Can Distributors Use Social Media to Advertise Retailer’s Promotions and Beer Specials?

ABDI initiated legislation last year, which became law, allowing distributors to advertise its products and repost or share a retailer’s social media post on the distributor’s social media page. The only stipulation is that distributors may not contain the price of the alcoholic liquor.  

“Section 6-5 “…A manufacturer, distributor, or importing distributor may furnish free social media advertising to a retail licensee if the social media advertisement does not contain the retail price of any alcoholic liquor and the social media advertisement complies with any applicable rules or regulations issued by the Alcohol and Tobacco Tax and Trade Bureau of the United States Department of the Treasury. A manufacturer, distributor, or importing distributor may list the names of one or more unaffiliated retailers in the advertisement of alcoholic liquor through social media. Nothing in this Section shall prohibit a retailer from communicating with a manufacturer, distributor, or importing distributor on social media or sharing media on the social media of a manufacturer, distributor, or importing distributor. A retailer may request free social media advertising from a manufacturer, distributor, or importing distributor. Nothing in this Section shall prohibit a manufacturer, distributor, or importing distributor from sharing, reposting, or otherwise forwarding a social media post by a retail licensee, so long as the sharing, reposting, or forwarding of the social media post does not contain the retail price of any alcoholic liquor. No manufacturer, distributor, or importing distributor shall pay or reimburse a retailer, directly or indirectly, for any social media advertising services, except as specifically permitted in this Act. No retailer shall accept any payment or reimbursement, directly or indirectly, for any social media advertising services offered by a manufacturer, distributor, or importing distributor, except as specifically permitted in this Act. For the purposes of this Section, "social media" means a service, platform, or site where users communicate with one another and share media, such as pictures, videos, music, and blogs, with other users free of charge.”

Can a Brewer Offer Consumer Specialty Items Free of Charge?

For example, a major brewer is providing convenience store consumers a free beer huggie (Koozie) when the consumer purchases a bottle of the brewer’s beer. The huggie is provided by the brewer not the distributor.

The “of value” section applies to giving of things of value to the retailer.  It does not apply to consumer advertising specialties that are clearly documented on an invoice as promotional items intended for consumer use. These items cannot be resold by the retailer nor can they be personally used by the retailer or retailer’s employees. 

As this policy is applied to a recent example, a manufacturer can provide a huggie (Koozie) to a convenience store retailer as part of a consumer promotion as long as the distributor’s invoice clearly documents that the huggies (Koozies) are for a consumer promotion and there is other evidence of the promotion at the store.  In this case, the distributor’s invoice should say “50 Bud Coolies for “Buy 2 25oz Cans, Get a Complimentary Coolie” Promotion- N/C.”  There should also be some other evidence of the promotion in the store like signage displayed that advertises the free consumer item at or near the beer display area.   (i.e. “See Cashier at checkout for free Huggie.”)

At no time may a brewer or distributor advertise free alcoholic liquor (i.e. “Buy 1 12 ounce bottle of Brand X Beer – get the second free.”