Bill S.141

SENATE DOCKET, NO. 150 FILED ON: 1/18/2017

SENATE . . . . . . . . . . . . . . No. 141

By Mr. Moore, a petition (accompanied by bill, Senate, No. 141) of Michael O. Moore for legislation relative to the sale of alcoholic beverages. Consumer Protection and Professional Licensure.

The Commonwealth of Massachusetts

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In the One Hundred and Ninetieth General Court
(2017-2018)

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An Act relative to the sale of alcoholic beverages.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

Section 1 of Chapter 138 of the General Laws is hereby amended by adding the following definitions: --

“Cost” is defined as net cost appearing on the invoice for said alcoholic beverage. The use of any device, promotion or scheme which results in the sale of alcoholic beverages at less than invoiced cost is prohibited.

“Discount” is an inducement or allowance to purchase a product which is reflected on the wholesaler's invoice at the time the sale of the subject alcoholic beverages to a retailer is completed. A discount is reflected in the cost of the product on which it is given, as it relates to the retailer's sale price for purposes of this section discounts may include quantity discounts;

“Rebate” is an inducement or allowance to purchase a product which is not reflected on the wholesaler's invoice at the time the sale of the subject alcoholic beverages to a retailer is completed, but which is payable no less than 30 days and no more than 90 days after the payment for the product on which it is given. A rebate is not reflected in the cost of the product on which it is given, as it relates to the retailer's sale price for purposes of this section.

“Retail Incentive Program (RIP)” is a form of rebate in which a wholesaler provides a financial incentive to a retailer to purchase a specific quantity of alcoholic beverages in one purchase transaction and places no other obligation on the retailer. A purchase transaction is a single order and a single delivery of a specific quantity of a specific alcoholic beverage or combination of beverages, as reflected on a single wholesaler's invoice.

SECTION 2. Section 25A of Chapter 138 of the General Laws is hereby amended by adding at the end thereof the following: --

No holder of a license issued under M.G.L. c. 138, s. 15 shall sell or offer to sell any alcoholic beverages at a price less than invoiced cost.

No manufacturer, supplier, importer, brand registrant, wholesaler, or distributor privileged to engage in the commerce of any alcoholic beverage into or within the Commonwealth shall, directly or indirectly, be a party to, or assist in, any transaction or sale, or contract to sell which discriminates against purchaser competitors, in that:

i. There is a different price or are different credit terms for different purchasers of alcoholic beverages of the same brand or trade name of like age, quality and quantity (including but not limited to proof and size); or

ii. Is a discount, rebate, allowance or advertising service granted to a purchaser over and above any discount, rebate, allowance, or advertising service available at the time of such transaction to competitors with respect to a sale of alcoholic beverages of the same brand or trade name of like age, quality and quantity. A wholesaler, however, may exclude retail cooperatives from a RIP program without the prior approval of the Commission so long as the RIP program complies with (d) below. A wholesaler wishing to exclude retail cooperatives from a RIP program that does not comply with Subsection (d) below shall first petition the Commission and seek approval of its program. This petition may include one or more such proposed programs and shall be submitted to the Commission at least 75 days in advance of the date on which the program(s) is proposed to appear on the Current Price List. Such program(s) shall not appear on the Current Price List without the Commission's prior approval. The petition shall include the following information upon which the Commission shall decide:

1. A detailed description of the proposed program(s);

2. A detailed description of how individual retail licensees will be able to participate in the program(s);

3. A detailed explanation of why the program(s) will not destabilize the marketplace, including, but not limited to, the creation of destructive price wars, or unduly increase the consumption of alcoholic beverages; and

4. Any other information the Commission deems necessary from a specific petitioner.

(b). Alcoholic beverages in any part of the Commonwealth at prices lower than those charged by that person or entity elsewhere in the Commonwealth for the purpose of destroying competition, or eliminating a competitor in the Commonwealth.

(c). Alcoholic beverages at unreasonably low prices for the purposes of destroying competition, or eliminating a competitor.

(d). The provisions of the foregoing shall not prevent differentials which make only due allowance for actual differences in the cost of manufacture, sale or delivery resulting from differing methods or quantities in which alcoholic beverage products are sold or delivered to, or paid for by, purchasers including discounts for prompt payment.

(e). Except as approved by the Commission under (b) 1 ii above, a retail incentive program (RIP) rebate shall conform to the following requirements:

1.All wholesalers participating in such programs shall provide the rebate in the form of a monetary payment, payable only by business checks issued by the participating wholesalers;

2. No RIP rebate shall be offered on a quantity in excess of 50 cases. For every RIP rebate, there shall be a corresponding small quantity RIP rebate on the same product(s), for a quantity that is 5 cases or less. The minimum quantity of any RIP rebate shall be 1 bottle;

3. RIP rebates may be based on a combination of various sizes and products. Provided, however, that no single RIP rebate shall exceed $1,000;

(f). Nothing in this regulation shall be deemed to limit the number of single RIP rebates which can be earned for qualifying purchases;if a wholesaler wishes to offer a RIP rebate using any formula or dollar amount other than that specified in this Subsection (d), it shall obtain the written approval of the Commission prior to offering such RIP rebate and prior to publication thereof in the wholesaler’s Marketing manual and Current Price List applicable to the period during which the RIP rebate will be offered;All wholesalers and all retailer participating in such programs shall keep a separate, complete and accurate accounting of all such rebates disbursed or received and all documents that reflect same;all wholesalers participating in such programs shall publish the details in its Marketing Manual and its Current Price List. If the Division investigates and or prosecutes any discount, rebate, allowance or advertising service offered by any manufacturer, supplier, importer, brand registrant, wholesaler, or distributor, the party offering it must make a prima facie showing that the program is consistent with the applicable statutes and regulations.

(2) Donations of alcoholic beverages by licensees for the purpose of having the same used as prizes in any game of chance are prohibited.

(3) No licensee shall buy or sell, or offer or contract to buy or sell, any alcoholic beverages on consignment or under conditional sale or with the privileges of return or on any basis otherwise than a sale or purchase in good faith. Nothing in this chapter shall prohibit the return, or acceptance of the return, of alcoholic beverages for ordinary and usual commercial reasons arising after the merchandise has been sold.

(4) No Hotel, Restaurant, Club, Tavern or "Package Goods" Store shall buy, or contract to buy, any alcoholic beverages from any Manufacturer or Wholesaler and Importer on consignment or under conditional sale or with the privilege of return or on any basis otherwise than a sale in good faith; provided however, that the provisions of this chapter shall not prohibit the return of alcoholic beverages for ordinary and usual commercial reasons arising after the alcoholic beverages have been purchased.

Name:	District/Address:
Michael O. Moore	Second Worcester