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HOUSE OF REPRESENTATIVES - FLOOR VERSION
STATE OF OKLAHOMA
2nd Session of the 58th Legislature (2022)
ENGROSSED SENATE
BILL NO. 1723 By: Coleman of the Senate
and
Marti of the House
[ alcoholic beverages - wine and spirits whol esalers
to adjust prices monthly - impose minimum fees -
electronic copies of prices for inspection - repealer
-
emergency ]
BE IT ENACTED BY THE PEOPLE OF T HE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 37A O.S. 2021, Section 3 -116, is
amended to read as follows:
Section 3-116. A. Any manufacturer or subsidiary of a
manufacturer who markets its products solely through a subsidiary or
subsidiaries, a distiller, rectifier, bottler, winemaker or importer
of alcoholic beverages, bottled or made in a foreign country, either
within or without this state, may sell such brands or kinds of
alcoholic beverages to every licensed wine and spirits wholesaler
who desires to purchase the same, on the same price basis and
without discrimination or inducement s, and shall further be required
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to sell such beverages only to those persons licensed a s wine and
spirits wholesalers.
B. The provisions of subsection A of this section shall not
apply to a brewer except as otherwise stated herein. In the event a
brewer, who has entered into territoria l distribution agreements
with beer distributors in thi s state, markets wine and spirits
products in this state either itsel f or through a subsidiary or
affiliate, then such brewer, subsidiary or affiliate may elect to
designate beer distributors, with who m it has entered into
territorial distribution agreemen ts, as its designated wholesalers
for any wine and spirit products to be sold by the brewer,
subsidiary or affiliate within said beer distributors ' existing
territories, provided such beer distributors must also hold a wine
and spirits wholesaler license. In such event, the beer
distributors shall be deemed designated whol esalers for the
territory with respect to the designated products. Provided, in the
event a beer distributor has not obtained a win e and spirits
license, has elected not to sell wine and spirits in its respective
territory or, in the brewer 's commercially reasonable discretion, is
not suitable to sell wine and spirits in its respective territory,
then the brewer, subsidiary or affilia te may extend the territory of
an existing beer distrib utor, with whom it has entered into a
territorial distribution agreem ent and who holds a wine and spirits
wholesaler license, for said territory. For purposes of this
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subsection only, the phrase "subsidiary or affiliate" shall mean any
entity that the brewer controls, is controlled by, or is under
common control with, duri ng the time that the wine and spirits
brands are offered for sale in this state, and "control" shall mean
ownership of more than fif ty percent (50%) of the voting securities
or assets of, or the ability to dictate the material operations of,
another entity. If the brewer, subsidiary or affiliate sells the
wine and spirits brands to a manufacturer other than one that would
otherwise fall within the provisions of this subsection, then the
rights provided in this subsection which relate to the wine and
spirits brands shall terminate. The rights provided to beer
distributors pursuant to Section 3 -111 of this title shall not be
extended to apply to the wine or spirits brands distributed pursua nt
to this subsection.
C. No manufacturer shall require a wine and s pirits wholesaler
to purchase any alcoholic beverages or any goods, wares or
merchandise as a condi tion to the wine and spirits whol esaler
obtaining or being entitled to purchase any alco holic beverages.
Violation of this section shall be a misdemeanor. C onviction
hereunder shall automatically revoke the violator 's license.
D. In the event a manufactu rer or nonresident seller has not
designated a designated wholesaler to sell its product s in the
state, the nondesignated products shall be posted in accorda nce with
the following:
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1. On the first business day of each month, the manufacturer
shall post with the ABLE Commission the price of all wine and
spirits it proposes to offer for sale t o licensed wine and spirit
wholesalers in this state. All prices sha ll become effective on the
first business day of the following month and shall remain in effect
and unchanged for a period of not le ss than one (1) month. The
posting shall be submitted on a form approved by the ABLE Commission
and shall identify the bran d, size, alcohol content and price of
each item intended to be offered for sale. No change or
modification of the posted price shal l be permitted except upon
written permission from the ABLE Commission based on good cause
shown;
2. When a new item is reg istered, or an old item is
discontinued, or any change is made by a manufacturer or nonresident
seller as to price, age, proof, labe l or type of bottle of any item
offered for sale in thi s state, such new item, discontinued item or
change in price, age, pr oof, label or type of bottle of any item
shall be listed separately on the cover page of the price schedule
and, in the case of pric es changed, shall reflect both the old and
the new price of the item changed. All new items and changes as to
age, proof, label or type of bottle in which any item is offered for
sale shall first be submitted in writing to the ABLE Commission for
approval under such requirements as it may deem proper. Approv al or
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disapproval of price changes shall not be required if filed in
conformity with the provisions of this subsection.
a. In addition to the foregoing requirements, th e
manufacturer shall, at the same time, on regular forms
provided by the ABLE Commission , re-register all items
of alcoholic beverage which the manufacturer had
registered and offered for sale in this state during
the previous price period.
b. A short form of price posting may be permitte d by the
ABLE Commission for any price period in which no new
item is offered or old item discontinued, or change is
made in the price, age, proof, label or type of bottle
of any item offered by any manufacturer. Such shor t
form shall contain only such st atements as the
Director may require or permit;
3. The brand name, size, proof and type of alcoholic beverages
must be shown on each container sold in this state;
4. No brand of alcoholic beverage shall be listed on a pri ce
list or posting in more than o ne place, or offered for sale by more
than one method, or at more than one price, except as provided
hereafter:
a. a manufacturer who has posted F.O.B. prices from a
foreign shipping point shall also list the same
item(s) at an F.O.B. point within the cont inental
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United States. Only one United States F.O.B. p oint
shall be permitted, and
b. a manufacturer may list on their pric e list or posting
an item of specific size that may be packaged in more
than one type or design con tainer, provided that the
containers being offered have been approved by the
ABLE Commission;
5. The manufacturer shall sell to the wine and spirits
wholesalers all items of wine and spirits at the current posted
price in effect on the date of the shipmen t as shown on the
manifest, bill of lading or invoice;
6. A full and correct copy of ea ch said price registration
shall be transmitted to wine and spirits w holesalers on the same day
such prices are filed with or mailed to the ABLE Commission. Proof
of such mailing or delivery shall be furnished the ABLE Commission
by the manufacturer with the price registration or upon request;
7. The sale, or offer to sel l, of any item of alcoholic
beverage by a manufacturer to a wine and spirits wholesaler at a
price not in compliance with the price posted with the ABLE
Commission may be deemed a violati on; and
8. This subsection shall not apply to a manufacturer that ha s
designated a wine and spirits wholesaler to sell its product in the
state or a brewer who has app ointed a beer distributor as a
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designated wholesaler pursuant to subsection B of Section 3-116 of
this title, with respect to designated products.
E. Every wine and spirits wholesaler shall maintain its wine
and spirits prices through the end of the ca lendar month. The wine
and spirits wholesaler may change any wine and spirits price at the
beginning of each calendar month.
F. Every wine and spirits wholesa ler is authorized to fill
orders non-sequentially and impose minimum order, delivery,
handling, processing, repackaging, and invoicing fees onto its
orders. These activities shall not constitute a violation of this
title or any rule promulgated under this title.
G. Every wine and spirits wholesaler shall make available for
inspection by the ABLE Commission upon request an electronic copy of
the prices in which its wine and spirits were sold to the retail
tier in this state. The electronic copy shall li st the line-item
price, handling cost, transportation cos t, and any other costs that
may be associated with the sale or delivery of th at item. The
prices provided by the wine and spirits w holesaler shall not be
subject to the Oklahoma Open Records Act or publicly disseminated by
the ABLE Commission.
SECTION 2. AMENDATORY 37A O.S . 2021, Section 3-123, is
amended to read as follows:
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Section 3-123. A. It shall be unlawful for any person
privileged to sell alcoholic beverages to wholesalers, beer
distributors or retailers:
1. To discriminate, directly or indirectly, in price betwe en
one wine and spirits wholesaler and another wine and spirits
wholesaler, when that ma nufacturer has not designated a single wine
and spirits wholesaler, or between one retailer and ano ther retailer
purchasing alcoholic beverages bearing the same brand o r trade name
and of like age and quality, unless otherwise provided by law; or
2. To grant, directly or indirectly, any discount, rebate, free
goods, allowance or other inducement.
B. The ABLE Commission is hereby authorized to promulgate rules
which are necessary to carry out the purpose of this section and to
prevent its circumvention by offering or giving of any rebate,
allowance, free goods, discount or any other thing or service of
value; provided, the posting or invoicing of charges per order for
processing minimum ord ers or per case for the handling or repacking
of goods imposition of minimum order, delivery, handling,
processing, repackaging, and invoicing fees onto its order by wine
and spirits wholesalers and beer distributors for sales in less than
full case lots shall not constitute a violation of this section.
C. For the violation of any provision of this section or of any
rule duly promulgated under this section, the ABLE Commiss ion may
suspend or revoke a license as follows:
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1. For a first offense, not exceedi ng ten (10) days' suspension
of license;
2. For a second offense, n ot exceeding thirty (30) days'
suspension of license; and
3. For a third offense, the ABLE Commission s hall revoke the
license.
D. For purposes of this section, and except as otherwise
provided in subsection E of this section, "inducement" means
directly or indirectly offering, selling, trading, giving or
furnishing any discount, free goods, electronic or nonelectronic
refrigerated equipment, barrels, tubs, fixtures, d ispensing
equipment, outdoor electric or nonelectric advertising structure
displaying the retailer's name, permanent shelving, supplies, gifts,
prizes, instantly redeemable coupons, premiums, retailer rebates,
services of any employee including but not lim ited to affixing pri ce
labels or tags, routinely stocking product on shelves other than the
stocking of cold boxes, paying a third party for entering product
and price information into a retai ler's computer system, portal,
website, spreadsheet or third -party system, handling product that
was not sold to the retailer by the licensee, paying a slotting fee,
selling on consignment, operating a retailer 's cash register,
conducting janitorial servic es, decoration, samples of alcoholic
beverages, personal propert y or other inducemen t or thing of value
to any retail spirit, retail beer, retail wine, beer and wine, mixed
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beverage, caterer, bottle club or special event licensee, wine and
spirits wholesaler or beer distributor, their agents or employees.
E. It shall not be deemed an ind ucement for a brewer, beer
distributor, small brewer self -distributor or brewpub self-
distributor to voluntarily take the following merchandising actions
with the permission of the retail licensee:
1. Furnish point-of-sale advertising materials and consum er
advertising specialties, as those terms are defined in 27 C.F.R.,
Section 6.84 and in compliance with the other limits and
restrictions provided in 27 C.F.R., Section 6. 84;
2. Give or sell product displays, including but not limited to
barrels and tubs, provided that the value of such displays does not
exceed the limits and restrictions provided in 27 C.F.R., Section
6.83;
3. Build product displays, accessible to the cu stomer and
without disturbing competitors ' products, for the pro duct being
delivered by the beer distributor;
4. Affix pricing to the shelf strip or pr oduct display for the
product being delivered by the beer distributor, small brewer self -
distributor or brewpub self-distributor, or brewed by the brewer;
5. Routinely stock and restock shelves and cold boxes and
rotate product that has been sold to the r etail licensee by the beer
distributor, small brewer self -distributor or brewpub self -
distributor, or brewed by the brewer;
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6. Furnish things of value to a temporary r etailer, as defined
in 27 C.F.R., Section 6.85;
7. Sell equipment or supplies to a reta il licensee, provided
the equipment or supplies are sold at a price not less than the cost
to the industry member and payment is collected within thirty (30)
days of the sale;
8. Install dispensing accessories at the retail location, as
long as the retailer bears the cost of installation including
equipment; or furnish, give or sell coil cleaning services t o a
retailer;
9. Withdraw quantities of beer or cider in undama ged, original
packaging from the retail licensee's stock, provided the beer
distributor, small brewer self-distributor, brewpub self -distributor
or brewer sold such beer, directly or indirectl y, to the retail
licensee and such removal is otherwise permitte d under Section 3-115
of this title; provided, however, replacing with beer or cider of
equivalent value shall not be considered a consignment sale;
10. Provide mail-in rebates for beer, cide r and nonalcoholic
beverage merchandise items, funded by the bre wer and redeemed by the
brewer, either by itself or through a third -party fulfillment
company, for a discount or rebate on the beer, cider or nonalcoholic
item;
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11. Provide a recommended shel f plan or shelf schematic to a
retail licensee for all or any po rtion of the invento ry sold by the
retail licensee;
12. Furnish or give a sample of bee r or cider to a retailer who
has not purchased the brand from that brewer, beer distributor,
small brewer self-distributor or brewpub self -distributor within the
last twelve (12) months, p rovided that the brewer, beer distributor,
small brewer self-distributor or brewpub self-distributor may not
give more than thirty -six (36) ounces of any brand of beer or c ider
to a specific retailer;
13. Furnish or give newspaper cuts , mats or engraved b locks for
use in retailers' advertisements;
14. Package and distrib ute beer or cider in combination with
other nonalcoholic items for sale to consumers;
15. Give or sponsor educational seminars for employees of
retailers either at the brewer, beer distributor, small brewer self-
distributor or brewpub self -distributor's premises or at the
retailer's establishment, including seminars dealing with use of a
retailer's equipment, training seminars for employees of retailers
or tours of the brewer, beer distrib utor, small brewer self-
distributor, or brewpub self -distributor's plant premises, provided
that the brewer, beer distributor, small brewer self -distributor or
brewpub self-distributor shall not pay the retailer for the
employees' travel, lodging or other expenses in conjunction with an
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educational seminar but may provide nominal hospitality during the
event;
16. Conduct tasting or sampling activities at a retail
establishment and purchase the products to be used from the retailer
so long as the purchase p rice paid does not exceed the ordinary
retail price; provided, a bee r distributor shall not be required to
provide labor for such sampling activities;
17. Offer contest pr izes, premium offers, refunds and like
items directly to consume rs so long as office rs, employees and
representatives of brewers, beer distributors, sma ll brewer self-
distributors, brewpub self -distributors and licensed retailers are
excluded from particip ation;
18. List the names and addresses of two or more unaffili ated
retailers selling the products of a brewer, beer distributor, small
brewer, small brewer self-distributor or brewpub self -distributor in
an advertisement of such brewer, beer distributor, small brewer,
small brewer self-distributor or brewpub self -distributor so long as
the requirements of 27 C.F.R., Section 6.98 are satisfied,
considering applicable guidance issued by the United States
Department of the Treasury Alcohol and Tobacco Tax an d Trade Bureau;
provided, nothing in the Oklahoma Alcoholic Beve rage Control Act
shall prohibit a retail, mixed beverage, on -premises beer and wine,
public event, special event, charitable auction, charitable
alcoholic beverage event, or complimentary beve rage licensee from
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communicating with a brewer, beer distributor , small brewer, smal l
brewer self-distributor or brewpub self -distributor on social medi a
or sharing media on the social media page or site of a brewer, beer
distributor, small brewer, small b rewer self-distributor or brewpub
self-distributor. A retail, m ixed beverage, on-premises beer and
wine, public event, special event, charitable auctio n, charitable
alcoholic beverage event, or complimentary beverage licensee may
request free social media advertising from a brewer, beer
distributor, small brewer, smal l brewer self-distributor or brewpub
self-distributor; provided, nothing in this section shall prohibit a
brewer, beer distributor, small brewer, small brewer self -
distributor or brewpub self -distributor from sharing, reposting or
forwarding a social media post by a retail, mixed beverage, on-
premises beer and wine, public event, special even t, charitable
auction, charitable alcoholic beverage event, or complimentary
beverage licensee, as long as the sharing, reposting or forwarding
of the social media post does not contain the retail price of any
alcoholic beverage. No brewer, beer distribut or, small brewer,
small brewer self-distributor or brewpub self -distributor shall pay
or reimburse a retail, mixed beverage, on -premises beer and wine,
public event, special event, charita ble auction, charitable
alcoholic beverage event, or complimentary b everage licensee,
directly or indirectly, for any social media advertising services.
No retail, mixed beverage, on-premises beer and wine, public event,
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special event, charitable auction, charitable alcoholic beverage
event, or complimentary beverage lice nsee shall accept any payment
or reimbursement, directly or indirectly, for any social media
advertising service offered by a brewer, beer distributor, small
brewer, small brewer self-distributor or brewpub self-distributor.
For purposes of this paragraph , "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; or
19. Entering product and price information into a retailer 's
portal, website, spreadsheet or third-party system. A brewer may
pay for a third-party system that provides d ata and pricing services
to the brewer or a beer distributor.
F. It shall not be deemed an inducement for a brewer, beer
distributor, small brewer self -distributor or brewpub self-
distributor to engage in the following marketing activities,
provided that the brewer, beer distributor, small brewer self -
distributor or brewpub self-distributor shall not pay the retailer's
travel costs other than those for l ocal transportation or lodging:
1. Provide tickets to a retailer for a sporting or
entertainment event so long as a representative of the brewer, beer
distributor, small brewer self-distributor or brewpub self-
distributor attends the event with the retail er;
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2. Provide food and beverage to a retailer for immediate
consumption:
a. at a meeting at which the primary purpose is the
discussion of business,
b. at a convention when the food and beverages are
offered to all participants, or
c. at a sports or entertainment event that the
representatives of a brewer, beer distributor, small
brewer self-distributor or brewpub self-distributor
attend with the retailer;
3. Participate in retailer asso ciation activities by engaging
in the following actions:
a. displaying products at a convention or trade show,
b. renting display booth space if the rental fee is the
same as paid by all exhibitors at the event,
c. providing its own hos pitality which is in dependent
from association-sponsored activities,
d. purchasing tickets to functions and paying
registration fees if the payments or fees are the same
as paid by all attende es, participants or exhibitors
at the event, or
e. making payments for advertisement s in programs or
brochures issued by retailer associations at a
convention or trade show; or
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4. Giving or selling outdoor signs to a retailer so long as the
following requirements of 27 C.F.R., Section 6.102 are satisfied:
a. the sign bears conspicuous an d substantial advertising
matter about the product or the brewer, be er
distributor, small brewer self-distributor or brewpub
self-distributor which is permanently inscribed or
securely affixed,
b. the retailer is not compensated, direct ly or
indirectly, such as through a sign company, for
displaying the signs, and
c. a permanent outdoor sign does not contain the
retailer's name.
SECTION 3. REPEALER 37A O.S. 2021, Sections 3-116.1, 3-
116.2, and 3-116.3, are hereby repealed.
SECTION 4. It being immediately necessary for the pr eservation
of the public peace, health or safety, an emergency is hereby
declared to exist, by reason whereof this act shall take effect and
be in full force from and after its passage and approval .
COMMITTEE REPORT BY: COMMITTEE ON ALCOHOL, TOBACCO AND CONTROLLED
SUBSTANCES, dated 04/14/2022 - DO PASS, As Amended.