PROPOSED RULES
Original Notice.
Preproposal statement of inquiry was filed as WSR 99-12-128 and 99-04-002.
Title of Rule: Chapter 314-13 WAC, Retail licensees purchasing beer, wine, and spirits.
Purpose: The purpose of proposed chapter 314-13 WAC is to explain how retail licensees can purchase beer, wine, and/or spirits for resale to the public.
Statutory Authority for Adoption: RCW 66.08.030, 66.08.010, 66.16.040.
Statute Being Implemented: RCW 66.08.010, 66.16.040.
Summary: The Liquor Control Board is currently undergoing a review of all of its rules to make them clear and usable, per Governor Locke's Executive Order 97-02. Chapter 314-13 WAC would explains how retail licensees can purchase beer, wine, and/or spirits for resale to the public.
Name of Agency Personnel Responsible for Drafting: Teresa Berntsen, P.O. Box 43080, Olympia, WA 98504-3080, (360) 664-1648; Implementation: David Goyette, P.O. Box 43075, Olympia, WA 98504-3075, (360) 664-1600; and Enforcement: Randy Reynolds, P.O. Box 43075, Olympia, WA 98504-3075, (360) 664-1600.
Name of Proponent: Washington State Liquor Control Board, governmental.
Rule is not necessitated by federal law, federal or state court decision.
Explanation of Rule, its Purpose, and Anticipated Effects: Chapter 314-13 WAC would explain how retail licensees can purchase beer, wine, and/or spirits for resale to the public:
| • | RCW 66.28.010(1) states that a retail licensee must pay cash for beer and wine prior to or at the time of delivery by a distributor, brewery, or winery. The proposed rules explain what forms of payment will be recognized as cash payment. |
| • | RCW 66.16.040(5) states that retails must pay cash for spirits purchased from the Liquor Control Board. The proposed rules explain what forms of payment will be recognized as cash payment. |
Proposal Changes the Following Existing Rules: The following rules would be partially or completely replaced by the proposed rules:
| • | Subsections (3)(a) and (3)(b) of WAC 314-12-140 Prohibited practices -- Contracts -- Gifts -- Rebates, etc. |
| • | WAC 314-24-170 Cash sales. |
No small business economic impact statement has been prepared under chapter 19.85 RCW. No disproportionate impact to small businesses.
Section 201, chapter 403, Laws of 1995, does not apply to this rule adoption. The Washington State Liquor Control Board is not a listed agency in section 201.
Hearing Location: Washington State Liquor Control Board, Board Room, 3000 Pacific Avenue S.E., Olympia, WA 98501, on January 10, 2001, at 9:30 a.m.; at the Washington State Liquor Control Board, Distribution Center, 4401 East Marginal Way South, Seattle, WA, on January 11, 2001, at 3:00 p.m.; and at the WestCoast Inn at the Park, 303 West North River Drive, Audubon Room, Spokane, WA, on January 12, 2001, at 9:30 a.m.
Assistance for Persons with Disabilities: Contact Teresa Berntsen by January 10, 2001, TDD (360) 586-4727, or (360) 664-1648.
Submit Written Comments to: Teresa Berntsen, Rules Coordinator, P.O. Box 43080, Olympia, WA 98504-3080, fax (360) 704-4920, by January 17, 2001.
Date of Intended Adoption: January 24, 2001.
November 21, 2000
Eugene Prince
Chair
The following section of the Washington Administrative Code is repealed:
| WAC 314-24-170 | Cash sales |
(1) No contract shall be made or entered into whereby any retail licensee agrees to handle any particular brand or brands of liquor to the exclusion of any other brand or brands of liquor.
(2) No contract shall be made or entered into for the future delivery of liquor to any retail licensee: Provided, That this regulation shall not be construed as prohibiting the placing and accepting of orders for the purchase and delivery of liquor which are made in accordance with the usual and common business practice and which are otherwise in compliance with the regulations.
(3) No manufacturer, distributor, or importer, or his
employee, shall directly or indirectly solicit, give or offer to,
or receive from any retail licensee, any employee thereof, or an
applicant for a license, any gifts, discounts, loans of money,
premiums, rebates, free liquor of any kind, treats or services of
any nature whatsoever; nor shall any retail licensee, employee
thereof, or an applicant for a license, directly or indirectly,
solicit, receive from, or give or offer to any manufacturer,
distributor or importer, or his employee, any gifts, discounts,
loans of money, premiums, rebates, free liquor of any kind,
treats or services of any nature whatsoever, except such services
as are authorized in this regulation. ((It shall be a violation
of this section for:
(a) Any retail licensee who has paid for beer or wine with a check which was dishonored upon presentation to thereafter refuse to make good on the check by immediate payment in cash.
(b) Any retail licensee to purchase beer and/or wine from any source after having received notice that a previous check given in payment for beer and/or wine has been dishonored until that dishonored check has been made good in cash.))
(4) Pursuant to RCW 66.28.010 a manufacturer, distributor, importer, or his licensed agent may perform the following services for a retailer:
(a) Build, rotate, and restock displays, utilizing filled cases, filled bottles or filled cans of his own brands only, from stock or inventory owned by the retailer. Rotate, rearrange or replenish bottles or cans of his own brands on shelves or in the refrigerators but is prohibited from rearranging or moving displays of his products in such a manner as to cover up, hide or reduce the space of display of the products of any other manufacturer, distributor or importer; Provided, however, manufacturers, distributors, importers or any employees thereof may move or handle in any manner any products of any other manufacturer, importer or distributor on the premises of any retail licensee when reasonable notice is given to other interested manufacturers, distributors or their agents and such activity occurs during normal business hours or upon hours that are mutually agreed.
(b) Provide price cards and may also price goods of his own brands in accordance with the usual and common business practice and which are otherwise in compliance with the regulations.
(c) Provide point of sale advertising material and brand signs.
(d) Provide sales analysis of beer and wine products based on statistical sales data voluntarily provided by the retailer involved for the purpose of proposing a schematic display for beer and wine products. Any statistical sales data provided by retailers for this purpose shall be at no charge.
(e) Such services may be rendered only upon the specific approval of the retail licensee. Displays and advertising material installed or supplied for use on a retailer's premises must be in conformity with the board's advertising rules as set forth in chapter 314-52 WAC.
(5) No manufacturer, distributor, importer, or employee thereof shall, directly or indirectly, give, furnish, rent or lend to, or receive from, any retail licensee any equipment, fixtures, supplies or property of any kind, nor shall any retail licensee, directly or indirectly, receive, lease or borrow from, or give or offer to, any manufacturer, distributor or importer any equipment, fixtures, supplies or property of any kind. Sales authorized in this regulation shall be made on a cash on delivery basis only.
(6) No manufacturer or distributor or employee thereof shall sell to any retail licensee or solicit from any such licensee any order for any liquor tied in with, or contingent upon, the retailer's purchase of some other beverage, alcoholic or otherwise, or any other merchandise, property or service.
(7) In selling equipment, fixtures, supplies or commodities other than liquor, no manufacturer, distributor or importer shall grant to retail licensees, nor shall such licensees accept, more favorable prices than those extended to nonlicensed retailers. The price thereof shall be not less than the manufacturer's, importer's, or distributor's cost of acquisition. In no event shall credit be extended to any retail licensee.
(8) Any manufacturer, distributor or importer who sells what is commonly referred to as heavy equipment and fixtures, such as counters, back bars, stools, chairs, tables, sinks, refrigerators or cooling boxes and similar articles, shall immediately after making any such sales have on file and available for inspection in accordance with WAC 314-20-050 a copy of the invoice covering each such sale, which invoice shall contain a complete description of the articles sold, the purchase price of each unit sold together with the total amount of the sale, transportation costs and services rendered in connection with the installation of such articles. Such invoice shall list the date of such sale and affirm that full cash payment for such articles was received from the retailer as provided in subsection (5) of this section.
(9) If the board finds in any instance that any licensee has violated this regulation, then all licenses involved shall be held equally responsible for such violation.
| Note: | WAC 314-12-140 is not intended to be a relaxation in any respect of section 90 of the Liquor Act (RCW 66.28.010). As a word of caution to persons desiring to avail themselves of the opportunity to sell to retail licensees fixtures, equipment and supplies subject to the conditions and restrictions provided in section 90 of the act and the foregoing regulation, notice is hereby given that, if at any time such privilege is abused or experience proves that as a matter of policy it should be further curtailed or eliminated completely, the board will be free to impose added restrictions or to limit all manufacturers and distributors solely to the sale of liquor when dealing with retail licensees. WAC 314-12-140 shall not be considered as granting any vested right to any person, and persons who engage in the business of selling to retail licensees property or merchandise of any nature voluntarily assume the risk of being divested of that privilege and they will undertake such business subject to this understanding. The board also cautions that certain trade practices are prohibited by rulings issued under the Federal Alcohol Administration Act by the United States Bureau of Alcohol, Tobacco and Firearms, and WAC 314-12-140 is not intended to conflict with such rulings or other requirements of federal law or regulations. |
[Statutory Authority: RCW 66.08.030, 15.88.030, 19.126.020, 66.04.010, 66.08.180, 66.16.100, 66.20.010, 66.20.300, 66.20.310, 66.24.150, 66.24.170, 66.24.185, 66.24.200, 66.24.206, 66.24.210, 66.24.230, 66.24.240, 66.24.244, 66.24.250, 66.24.375, 66.24.380, 66.24.395, 66.24.400, 66.24.420, 66.24.425, 66.24.440, 66.24.450, 66.24.455, 66.24.495, 66.24.540, 66.28.010, 66.28.040, 66.28.050, 66.28.170, 66.28.180, 66.28.190, 66.28.200, 66.28.310, 66.44.190, 66.44.310, 66.98.060 and 82.08.150. 98-18-097, § 314-12-140, filed 9/2/98, effective 10/3/98. Statutory Authority: RCW 66.08.030. 95-17-005, § 314-12-140, filed 8/3/95, effective 9/3/95; 93-10-070, § 314-12-140, filed 5/3/93, effective 6/3/93. Statutory Authority: RCW 66.08.030(2). 92-02-014, § 314-12-140, filed 12/23/91, effective 1/23/92. Statutory Authority: RCW 66.28.010. 87-04-018 (Order 211, Resolution No. 220), § 314-12-140, filed 1/27/87. Statutory Authority: RCW 66.28.010 and 66.08.030 (2)(l). 86-09-019 (Order 181, Resolution No. 190), § 314-12-140, filed 4/9/86. Statutory Authority: RCW 66.08.030. 86-04-003 (Order 167, Resolution No. 176), § 314-12-140, filed 1/23/86. Statutory Authority: RCW 66.08.030 and 66.98.070. 84-22-060 (Order 150, Resolution No. 159), § 314-12-140, filed 11/7/84; Order 46, § 314-12-140, Rule 13, filed 6/9/76; Rule 13, filed 6/13/63.]
Chapter 314-13RETAIL LICENSEES PURCHASING BEER, WINE, AND SPIRITS
NEW SECTION
WAC 314-13-005
What is the purpose of chapter 314-13 WAC?
The purpose of chapter 314-13 WAC is to outline the procedures for retail licensees to purchase beer, wine, and/or spirituous liquor for re-sale.
[]
| Definition | Who licensees can purchase from | |
| Beer | RCW 66.04.010 (2)(21) | • A licensed Washington
distributor (including a
licensed Washington
brewery who distributes its
own product) • Washington State Liquor Control Board store or agency |
| Wine | RCW 66.04.010(37) | • A licensed Washington
distributor (including a
licensed Washington
winery who distributes its
own product) • Washington State Liquor Control Board store or agency |
| Spirits | RCW 66.04.010(32) | Washington State Liquor Control Board store or agency |
[]
Per RCW 66.28.010(1), a retail licensee must pay cash for beer and wine prior to or at the time of delivery by a distributor, brewery, or winery. The board will recognize the following forms of payment as cash payment for purposes of this title, under the conditions outlined in this rule and in WAC 314-13-020.
(1) Checks, under the provisions of WAC 314-13-020.
(2) Credit cards, under the following provisions:
(a) The credit card transaction agreement must be voluntary on the part of both the retailer and the manufacturer, importer, or distributor, and there must be no discrimination for non-participation in credit card transactions.
(b) A sale must be initiated by an irrevocable invoice or sale order before or at the time of delivery.
(c) Both parties must bear their respective banking costs or other costs associated with the credit card service.
(d) Both parties must maintain records of transactions and have the records readily available for board review.
(e) The credit card charge must be initiated by the manufacturer, importer, or distributor no later than the first business day following delivery.
(3) Electronic funds transfer (EFT), under the following provisions:
(a) The EFT agreement must be voluntary on the part of both the retailer and the manufacturer, importer, or distributor, and there must be no discrimination for non-participation in EFT.
(b) Prior to any EFT transaction, the retail licensee must enter into a written agreement with the manufacturer, importer, or distributor specifying the terms and conditions for EFT as payment for alcohol or non-alcohol beverages.
(c) A sale must be initiated by an irrevocable invoice or sale order before or at the time of delivery.
(d) Both parties must bear their respective banking costs or other costs associated with EFT service.
(e) Both parties must maintain records of transactions and have the records readily available for board review.
(f) The electronic funds transfer must be initiated by the manufacturer, importer, or distributor no later than the first business day following delivery.
(4) Prepaid accounts. Both parties must keep accurate accounting records of prepaid accounts to ensure a cash deposit is not overextended, which is considered an extension of credit.
[]
Any transaction reported as having non-sufficient funds (NSF) will be considered an extension of credit, in violation of RCW 66.28.010(1). If a transaction is reported as NSF:
(1) The retailer must pay the full amount of the transaction to the manufacturer, importer, or distributor by 3 p.m. on the first business day following receipt of the NSF report.
(2) If the retailer does not make payment by this time, the manufacturer, importer, or distributor must report the NSF transaction to the their local board enforcement office by 5 p.m. the next business day following receipt of the NSF report.
(3) The local board enforcement office will contact the retailer, who will have until 3 p.m. the next business day to pay the NSF transaction. If the retailer does not pay the manufacturer, importer, or distributor by this time, the board will issue an administrative violation notice to the retailer.
(4) Until the NSF transaction is paid:
(a) the manufacturer, importer, or distributor who received the NSF transaction will not deliver any beer or wine to the retailer; and
(b) it is the responsibility of the retailer to not receive any beer or wine from any manufacturer, importer, or distributor.
[]
Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
NEW SECTION
WAC 314-13-025
How do retail licensees purchase spirituous
liquor at a discount from the board?
(1) In order to acquire spirituous liquor for re-sale, the following licensees must purchase spirituous liquor from the board at a fifteen percent discount:
(a) spirits, beer, and wine restaurants;
(b) spirits, beer, and wine private clubs; and
(c) sports/entertainment facilities.
(2) When purchasing spirituous liquor, the licensee must present the tear-off portion of their master license that shows their liquor endorsement.
(3) This discounted spirituous liquor may only be used for re-sale on the licensed premises (see WAC 314-70-010 for instructions on when a business discontinues).
(a) Possession of discounted liquor off of the licensed premises will be prima facie evidence of a violation of this rule, unless:
(i) the liquor is en route from the point of purchase to the licensed premises, or
(ii) the liquor is en route from the licensed premises of a beer and/or wine restaurant or a spirits, beer, and wine restaurant with a caterer's endorsement to an approved event being catered by the licensee.
(b) Any spirituous liquor on the licensed premises must be liquor purchased at a discount from the board, except:
(i) under the authority of a banquet permit, see Chapter 314-18 WAC; or
(ii) liquor bottles if they are used as part of the decor, and any bottles containing liquor are locked in display case and are not for sale.
[]
(1) Per RCW 66.16.040(5), retailers must pay cash for spirituous liquor purchased from the board.
(2) For the purposes of this section, a check will be considered cash as long as the check is immediately made good when presented and is not used as a device for obtaining or extending credit. Therefore, state liquor stores will take certified checks from retailers for the purchase of spirituous liquor, and will take personal or company checks under the following conditions:
(a) Persons or entities that have held a liquor license for less than two years must supply the board a letter of credit from the bank in which the account is held.
(b) Persons or entities that have held a liquor license for two years are longer must either:
(i) apply and be approved for a check acceptance agreement with the board, on a form provided by the board; or
(ii) supply the board a letter of credit from the bank in which the account is held.
(3) Agency vendors may adopt the check acceptance policy outlined in this rule.
[]
Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
NEW SECTION
WAC 314-13-040
Do I have to sell liquor at a certain price?
Retail liquor licensees must sell beer, wine, and spirituous liquor above the licensee's acquisition cost.
[]