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SENATE FLOOR VERSION
April 3, 2023
ENGROSSED HOUSE
BILL NO. 2843 By: Caldwell (Trey) of the
House
and
Seifried of the Senate
An Act relating to alcoholic beverages; amending 37A
O.S. 2021, Sections 2 -108, 3-109, 3-123 and 5-132,
which relate to alcoholic beverages; providing that a
beer distributor licensee may store alcoholic
beverages of any kind, nonalcoholic beverages, and
other goods, wares, and merchandise in a ny warehouses
owned or leased by the beer distributor; providing
that a beer distributor is not obligated to segregate
the products in the warehouse; providing that a
leased warehouse includes a leased space within a
multi-tenant building under certain cir cumstances;
providing that employees of a beer distributor may
transport beer to licensed retailers; modifying
penalties and providing a remedy to cure such
violations; providing it shall not be deemed an
inducement or a discriminatory action for certain
license holders to establish individu alized servicing
and delivery schedules for their retailers based on
the retailer's actual needs; expanding license
holders who must submit an application for
registration of a brand label; providing that certain
license holders shall not be required to ve rify
registration and shall not be penalized for any
applicant's failure to register its brand label; and
declaring an emergency .
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLA HOMA:
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SECTION 1. AMENDATORY 37A O.S. 202 1, Section 2-108, is
amended to read as follows:
Section 2-108. A. A beer distributor license shall authorize
the holder thereof:
1. To purchase and import into this state cider from pe rsons
authorized to sell the sam e who are the holders of manufacture r's
licenses, and their agents who are the holders of manufacturer's
agent licenses;
2. To purchase and import into this state beer or cider from
persons authorized to sell the same who a re the holders of brewer 's
or small brewer's licenses;
3. To purchase beer and cider from licensed beer distributors
in this state;
4. To sell in retail containers to retailers, on -premises beer
and wine, mixed beverage, caterer, special event, public ev ent,
hotel beverage and airline/ railroad beverage licensees or any o ther
licensee permitted to sell beer to consumers in this state, beer a nd
cider which has been received, unloaded and stored at the holder 's
self-owned or leased and self -operated warehouses before such sale,
unless otherwise permitted by this section;
5. To sell beer and cider in this state to beer distributors
and out of this state to qualified persons, including federal
instrumentalities and voluntary associations of military personnel
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on federal enclaves in this stat e over which this state has ceded
jurisdiction;
6. To donate beer and cider to organizations, associations or
nonprofit corporations organized for political, fraternal,
charitable, religious or social purposes or to charita ble events;
and
7. To transport wine, spirits, beer and cider in ve hicles
owned, leased or operated by the beer distributor, a subsidiary of
the beer distributor, or its agent, in addition to any nonalcoholic
items. Provided, if the beer distributor tran sports wine and
spirits, a valid wine and spirits wholesaler license must be
maintained by the beer distributor or affiliated entity having
common ownership with the licensed beer distributor ; and
8. To store alcoholic beverages of any kind, including wine and
spirits owned by a licensed affiliated entity having common
ownership, nonalcoholic beverages, and other goods, wares, and
merchandise related to the foregoing, in any number of warehouses
owned or leased by the beer distributor as determined by t he beer
distributor. Provided, however, the storage of wine and spirits
shall comply with the limitations to the number of warehouses
contained in Section 2-107 of this title. There shall be no
obligation to segregate the products in the warehouse by alcoho l
content or type of product. F or purposes of this section, a leas ed
warehouse includes a leased space within a multi-tenant building as
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long as such leased space is a discrete, enclosed area operated and
controlled exclusively by the beer distributor .
B. In the event that no in -state beer distributor for a
particular brewer or manufacturer is willing to deliver beer or
cider to a county or counties located within the state, the ABLE
Commission may grant an economic hardship exemption to an out -of-
state beer distributor for a particular brewer and waive the at-rest
requirement set forth in this section, upon a good-faith showing
that:
1. It is economically infeasible or impractical for an in -state
beer distributor for a particular brewer to deliver to the county or
counties due to remot eness, or population, or both;
2. No in-state beer distributor of a particular brewer or
manufacturer objects to the waiver within thirty (30) days of
receiving written notice of the economic hardship application sent
by the ABLE Commission; and
3. The out-of-state beer distributor agrees to pay all
necessary licensing fees and remit all applicable taxes to t he State
of Oklahoma.
C. The economic hardship exemption provided for in subsection B
of this section shall renew an nually, provided that no in -state beer
distributor for a particular brewer or manufacturer submits an
executed distribution agreement to as sume responsibility to
distribute the beer in the subject county or counties at least sixty
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(60) days prior to the re newal date of the exemption. Th e in-state
beer distributor who has executed a distribution agreement to assume
responsibility to distribut e beer in the subject territory shall
compensate the out-of-state distributor the fair market value of the
distribution rights of the territory as de termined pursuant to
Section 3-108 of this title.
D. Provided, nothing in this section shall require an Ok lahoma
licensed beer distributor with an Oklahoma designated territory on
the effective date of this act to meet the hardship provisions in
subsections B and C of this section to conti nue to operate as a
licensed Oklahoma beer distributor.
SECTION 2. AMENDATORY 37A O.S. 2021, Section 3 -109, is
amended to read as follows:
Section 3-109. In order to regulate distribution of beer in
this state and assure collection of all applicable taxes and fees,
all beer sold in this state by a licensed distributor shall only be
transported within this state to the licensed address and lo cation
of a licensed retailer or between the licensed addresses and
locations of licensed retailers by a marked conveyance conveyances
owned or leased by a licensed distributor or its employees.
SECTION 3. AMENDATORY 37A O.S. 202 1, Section 3-123, is
amended to read as follo ws:
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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 between
one wine and spirits wholesaler and another win e and spirits
wholesaler, when that manufacturer has not designated a single wine
and spirits wholesaler, or between one retailer and another retailer
purchasing alcoholic beverages bearing the same brand or trad e name
and of like age and quality, unless o therwise 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 sectio n 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 orders or per case for the handling or repacking
of goods 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 thi s section or of any
rule duly promulgated under this section, the ABLE Commission may
issue a written warning, fine, suspend or revoke a license as
follows:
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1. For a first offense, not exceeding ten (10) days ' suspension
of license a written warning which may be accompanied by a fine not
to exceed Five Thousand Dollars ($5,000.00);
2. For a second offense, not exceeding thirty (30) ten (10)
days' suspension of license; and
3. For a third offense, the ABLE Commission shall revoke the
license.
Provided, however, prior to suspending or revoking a license,
the ABLE Commission shall first provide written notice to a licensee
of the violation and a period of ninety (90) days following such
notice to cure or remedy such violation. For purposes of this
section, a "second offense" and "third offense" shall mean
violations that are related to or arising out of and occurring
within twelve (12) months of the "first offense".
D. For purposes of this section, and except as otherwise
provided in subsecti on E of this section, "inducement" means
directly or indirectly offerin g, selling, trading, giving or
furnishing any discount, free goods, electronic or nonelectronic
refrigerated equipment, barrels, tubs, fixtures, dispensing
equipment, outdoor electric o r nonelectric advertising st ructure
displaying the retailer 's name, permanent shelving, supplies, gifts,
prizes, instantly redeemable coupons, premiums, retailer rebates,
services of any employee including but not limited to affixing price
labels or tags, routinely stocking product o n shelves other than the
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stocking of cold boxes, paying a third party for entering product
and price information into a retailer's computer system, portal,
website, spreadsheet or third-party system, handling product that
was not sold to the retailer by th e licensee, paying a slotting fee,
selling on consignment, operating a retailer's cash register,
conducting janitorial services, decoration providing decorations,
samples of alcoholic beverages, personal property or other
inducement or thing of value to any retail spirit, retail beer,
retail wine, beer and wine, mixed 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 inducement for a brewe r, beer
distributor, small brewer sel f-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 consumer
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;
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3. Build product displays, accessible to the customer and
without disturbing competitors ' products, for the product being
delivered by the beer distri butor;
4. Affix pricing to the shelf strip or product 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 box es and
rotate product that has been s old to the retail licensee by the beer
distributor, small brewer self-distributor or brewpub self-
distributor, or brewed by the brewer;
6. Periodically perform product resets, with permission of the
retail licensee, pursuant to a provi ded shelf plan or shelf
schematic;
7. Furnish things of value to a temporary retailer, as defined
in 27 C.F.R., Section 6.85;
7. 8. Sell equipment or supplies to a retail licensee, provid ed
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. 9. Install dispensing accessories at the retail location, as
long as the retailer bears the cost o f installation including
equipment; or furnish, give or sell co il cleaning services to a
retailer;
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9. 10. Withdraw quantities of b eer or cider in undamaged,
original packaging from the retail licensee's stock, provided the
beer distributor, small brewer self -distributor, brewpub self-
distributor or brewer sold such b eer, directly or indirec tly, to the
retail licensee and such removal is otherwise permitted under
Section 3-115 of this title; provided, however, replacing with beer
or cider of equivalent value sh all not be considered a consignment
sale;
10. 11. Provide mail-in rebates for beer, ci der and
nonalcoholic beverage merchandis e items, funded by the brewer and
redeemed by the brewer, either by itself or through a third-party
fulfillment company, for a discou nt or rebate on the beer, cider or
nonalcoholic item;
11. 12. Provide a recommended sh elf plan or shelf schematic to
a retail licensee for all or any portion of the inventory sold by
the retail licensee;
12. 13. Furnish or give a sample of beer or cider to a ret ailer
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, provided that the b rewer, beer distributor,
small brewer self-distributor or brewpub sel f-distributor may not
give more than thirty -six (36) ounces of any brand of beer or cider
to a specific retailer;
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13. 14. Furnish or give newspaper cuts, mats or engraved blocks
for use in retailers' advertisements;
14. 15. Package and distribute beer or cider i n combination
with other nonalcoholic i tems for sale to consumers;
15. 16. 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 distributor, small brewer self-
distributor, or brewpub self -distributor's plant premises, prov ided
that the brewer, beer distribu tor, small brewer self -distributor or
brewpub self-distributor shall not pay the retailer for the
employees' travel, lodging or other expens es in conjunction with an
educational seminar but may provide nominal hospitality during the
event;
16. 17. Conduct tasting or sampling activities a t a retail
establishment and purchase the products to be used from the retailer
so long as the purchase pri ce paid does not exceed the ordinary
retail price; provided, a beer distributor shall not be required to
provide labor for such sampling activities;
17. 18. Offer contest prizes, premium offers, refunds and like
items directly to consumers so long as offi cers, employees and
representatives of brewers, beer distr ibutors, small brewer self -
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distributors, brewpub self-distributors and licensed retailers a re
excluded from participation;
18. 19. List the names and addresses of two or more
unaffiliated retailers selling the products of a brewer, beer
distributor, small bre wer, small brewer self -distributor or brewpub
self-distributor in an advertisement of s uch 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 guida nce issued by the
United States Department of the Treasu ry Alcohol and Tobacco Tax and
Trade Bureau; provided, nothing in the Oklahoma Alcoholic Beverage
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 beverage
licensee from communicating with a brewer, beer distributor, small
brewer, small brewer self-distributor or brewpub self-distributor on
social media or sharing media on the social media page or site of a
brewer, beer distributor, small brewer, small brewer self-
distributor or brewpub self-distributor. A retail, mixed beverage,
on-premises beer and wine, public event, special event, chari table
auction, charitable alcoh olic beverage event, or complimentary
beverage licensee may request free social media advertising from a
brewer, beer distributor, small brewer, small brewer self -
distributor or brewpub self-distributor; provided, nothing in this
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section shall prohibit a b rewer, beer distributor, small brewer,
small brewer self-distributor or brewpub self-distributor from
sharing, reposting or forwarding a social media post by a ret ail,
mixed beverage, on-premises beer and wine, public event, special
event, charitable aucti on, charitable alcoholic beverage event, or
complimentary beverage licensee, as long as the sharing, reposting
or forwarding of the social media post does not cont ain the retail
price of any alcoholic beverage. No brewer, be er distributor, 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, c haritable auction,
charitable alcoholic beverage event, or com plimentary beverage
licensee, directly or indirectly, for any social media advertising
services. No retail, mixed beverage, on-premises beer and wine,
public event, special event, charitable au ction, charitable
alcoholic beverage event, or complimentary b everage licensee 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 sel f-distributor or brewpub
self-distributor. For purposes of th is 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 charg e; or
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19. 20. Entering product and price information into a
retailer's portal, website, spreadsh eet or third-party system. A
brewer may pay for a t hird-party system that provides data 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 mar keting activities,
provided that the brewer, beer distributor, small brewer self-
distributor or brewpub sel f-distributor shall not pay the retailer's
travel costs other than those for local 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 wit h the retailer;
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 tha t the
representatives of a brewer, beer distributor, small
brewer self-distributor or brewpub self-distributor
attend with the retailer;
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3. Participate in ret ailer association activities by engaging
in the following actions:
a. displaying products at a co nvention or trade show,
b. renting display booth spa ce if the rental fee is the
same as paid by all exhibitors at the event,
c. providing its own hospitality w hich is independent
from association-sponsored activities,
d. purchasing tickets to functions and paying
registration fees if the payments or fees ar e the same
as paid by all attendees, participants or exhibitors
at the event, or
e. making payments for adv ertisements in programs or
brochures issued by retailer associatio ns at a
convention or trade sho w; or
4. Giving or selling outdoor signs to a retai ler so long as the
following requirements of 27 C.F.R., Section 6.102 are satisfied:
a. the sign bears conspicuous and substantial advertising
matter about the product or th e brewer, beer
distributor, small brewer self-distributor or brewpub
self-distributor which is permanently inscribed or
securely affixed,
b. the retailer is not compensated, directly or
indirectly, such as through a sign company, for
displaying the signs, and
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c. a permanent outdoor sign does not contain the
retailer's name.
G. It shall not be deemed an inducement or a discriminatory
action for a brewer, beer distributor, small brewer self-
distributor, brewpub self-distributor, or a wine and spirits
wholesaler to establish individualized servicing and delivery
schedules for its retailers based on each retailer's actual needs,
including, without limitation, on the basis of the retailer's sales
volume.
SECTION 4. AMENDATORY 37A O. S. 2021, Section 5-132, is
amended to read as follows:
Section 5-132. A. Except as provided in subsection D of this
section, no alcoholic beverage shall be labeled, offered or
advertised for sale in this state unless in accordanc e with rules
promulgated pursuant to the provisions of Sectio n 5-130 of this
title and unless the brand label shall have been registered with and
approved by the ABLE Commission and the appropriate fee paid as
provided for in this section.
B. An application for registration of a bran d label shall be
filed by and fees paid by the manufacturer or brewer, winemaker,
distiller or nonresident seller of the brand if the manufacturer or
brewer is licensed by the ABLE Commissi on; however, if the brewer or
manufacturer is represented by a manu facturer's agent, licensed
nonresident seller, win e and spirits wholesaler or beer distributor,
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then the manufacturer's agent, nonresident seller, wine and spirits
wholesaler or beer distri butor may submit each label for each
product the manufacturer or br ewer offers for sale in this state,
along with payment of the brand registration fee, on behalf of the
manufacturer or brewer; provided, the manufacturer or brewer must
fully reimburse the manufacturer's agent, licensed nonresident
seller, wine and spirits wholesaler or beer distributor for the cost
of the brand registration fee within forty-five (45) days of the
time the original brand registration fee is paid. Licensees, other
than the foregoing applicants, shall not be required to verify
registration to the ABLE Commission and shall not be penalized fo r
any applicant's failure to register its brand label in accordance
with this section. Cordials and wines which differ only as to age
or vintage year, as defined by such rules, shall be considered the
same brand, and those that differ as to type or class may be
considered the same brand by the ABLE Commission where consis tent
with the purposes of this section.
C. The application for registra tion of a brand label shall be
filed on a form prescribed by the ABLE Commission, and shall contain
such information as the ABLE Commission shall require. Such
application shall be ac companied by a certified check, bank
officers' check or draft or money o rder in the amount of the annual
registration fee, or the properly prorated portion thereof
prescribed by this secti on.
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D. 1. The annual fee for registration of any brand label for
spirits shall be Three Hundred Seventy-five Dollars ($375.00). The
annual fee for registration of any brand label for beer shall b e Two
Hundred Dollars ($200.00). The annual fee for regis tration of any
brand label for wine made in the United States, or fo r registration
of any category of imported wine as defined by the Tax Co mmission,
shall be Two Hundred Dollars ($200.00). Beer ma nufactured in this
state shall be exempt from brand label registration fees.
2. Each brand label registered and approved purs uant to this
section shall be valid for a term of up to one (1) year, ex piring on
the June 30 next following registration, and may be renewed for
subsequent terms of one (1) year beginning on the July 1 following
the initial registration. Brand registrati on fees for labels
registered after July 1 may be prorated through the f ollowing June
30 on a quarterly basis. The brand registra tion fee shall not be
transferable, unless otherwise allow ed by law. A nonresident seller
who registered brands prior to May 7, 2019, may transfer brand
registrations to the brewer or manufacturer that produces those
brands, provided the brewer or manufac turer has obtained a license,
at no expense to the nonresi dent seller, brewer or manufacturer.
E. If the ABLE Commission shal l deny the application for
registration of a brand label, it shall retur n the registration fee
to the applicant, less twenty -five percent (25%) of such fee.
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F. The ABLE Commission may at any time exempt any discontinued
brand from fee provisions of this s ection where a manufacturer,
brewer, beer distributor or wholesaler has an inventory of one
hundred cases or less of liquor or win e and five hundred cases or
less of beer, and certifies to the ABLE Commission in writing that
such brand is being discontinue d.
G. No private labels or control labels shall be approved for
sale in this state;, except for charity collaboration beer as
authorized in Section 3 2-102.1 of this act title.
SECTION 5. It being immediately necessary for the preservation
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 an d approval.
COMMITTEE REPORT BY: COMMITTEE ON BUSINESS AND COMMERCE
April 3, 2023 - DO PASS