Aiding or assisting other vendor prohibited; exception; refunding amount of price reductions; providing licensee with advertising items; providing licensee with goods and services; approval by commission; sale of brand logoed items; possession and use of brand logoed barware; conditions for promotion of brand under R 436.1321(1) to (3); unauthorized providing or selling of barware; fine; on-premises brand promotional event; removal of merchandise; purchase and sale of brand logoed inventory by retailer holding off-premises license; adding or removing item by rule; definitions.
Except as provided in this section and sections 605 and 1029, a manufacturer, mixed spirit drink manufacturer, warehouser, wholesaler, outstate seller of beer, outstate seller of wine, outstate seller of mighfghed spirit drink, or vendor of spirits shall not aid or assist any other vendor by gift, loan of money or property of any description, or other valuable thing, or by the giving of premiums or rebates, and a vendor shall not accept the same. However, if manufacturers of spirits reduce the price of their products, the manufacturer of spirits may refund the amount of the price reductions to specially designated distributor licensees in a manner prescribed by the commission.
A manufacturer, mixed spirit drink manufacturer, warehouser, wholesaler, outstate seller of beer, outstate seller of wine, outstate seller of mixed spirit drink, or vendor of spirits may, in a manner consistent with rules, regulations, and orders made by the commission, provide another licensee with an advertising item that promotes the brands and prices of alcoholic liquor produced by the manufacturer; sold by the outstate seller of beer, outstate seller of wine, or the outstate seller of mixed spirit drink, or distributed by the wholesaler. Except as otherwise allowed under subsection (3), (4), (5), or (6) the advertising item shall not have any use or value beyond the actual advertising of brands and prices of the alcoholic liquor.
Except for those orders that were approved for specific sponsorships or festivals, a manufacturer, mixed spirit drink manufacturer, warehouser, wholesaler, outstate seller of beer, outstate seller of wine, outstate seller of mixed spirit drink, or vendor of spirits may provide goods and services to another licensee that were approved by the commission under rules or orders adopted before January 1, 2014 and the following items:
A wholesaler may sell brand logoed items to an off-premises licensee if those brand logoed items are contained within the packaging of an alcoholic liquor product that is to be sold to a consumer.
A retailer shall not use or possess, at its licensed premises, advertising items that have a use or value beyond the actual advertising of brands and prices of alcoholic liquor except for those items allowed in subsection (3), (4), or (6), or as otherwise allowed under this subsection. A retailer may possess and use brand logoed barware that advertises spirits if the items are purchased from a manufacturer of spirits, vendor of spirits, salesperson, broker, or barware retailer. A retailer may possess and use brand logoed barware that advertises beer or wine if the items are purchased from a barware retailer. A retailer shall maintain the receipts of all purchased brand logoed barware for at least 3 years and shall make those receipts available for inspection by the commission as provided in section 217. Beginning in the 2015 licensing year, a retailer shall disclose, in a manner as prescribed by the commission on the application for renewal of an existing license, if any barware was purchased by the retailer during the immediately preceding license year.
A manufacturer, outstate seller, or vender of spirits may provide brand logoed merchandise to an on-premises retailer and off-premises retailer to promote the brand and price of its products under R 436.1321(1) to (3) of the Michigan Administrative Code if all of the following conditions are complied with:
In addition to the penalties provided under section 903, a manufacturer of beer or wine, mixed spirit drink manufacturer, warehouser, wholesaler, outstate seller of beer, outstate seller of wine, or outstate seller of mixed spirit drink that provides or sells barware and is not authorized to provide or sell barware is subject to a fine in an amount of up to $2,500.00 as determined by the commission. Multiple violations resulting from the same incident may be treated as a single violation for purposes of issuance of any penalty imposed under this act.
An on-premises retailer that hosts an on-premises brand promotional event conducted by a wholesaler or supplier has 14 days after the event to remove from the premises any brand logoed merchandise from the event to maintain compliance with this section.
This act and rules promulgated under this act do not prevent a retailer that holds an off-premises license only from purchasing brand logoed inventory and selling that inventory to its customers.
Beginning after September 25, 2015, the commission may, by rule, add an item to or remove an item from the definition of barware. The commission shall not add or remove more than 1 item per rule and shall not promulgate more than 1 rule at a time on the definition of barware. The commission shall not issue a rule that adds refrigerator systems, draft systems, or furniture to the definition of barware. A rule, regulation, or order adopted after January 1, 2014 that is not adopted in accordance with this subsection and that is not consistent with this section or is in conflict with this section is void and unenforceable.
As used in this section:
"Barware" means the following brand logoed items:
"Barware retailer" means a person that offers brand logoed barware for sale to retailers, whether or not it is in their ordinary course of business, and that is not licensed as, or directly or indirectly affiliated with, a manufacturer of beer or wine, mixed spirit drink manufacturer, warehouser, wholesaler, outstate seller of beer, outstate seller of wine, or outstate seller of mixed spirit drink. For purposes of this subdivision, a licensing agreement that authorizes use of a brand logo is not a direct or indirect affiliation.
"Broker" means a person, other than an individual, that is licensed by the commission and that is employed or otherwise retained by a manufacturer of spirits or a vendor of spirits to sell, promote, or otherwise assist in the sale or promotion of spirits.
"Indirectly affiliated" means, for purposes of this section only, that a person owns 5% or more of the voting interest of another person.
“Other valuable thing” means a good, service, or intangible good that is given, loaned, leased, or sold to another licensee that has value regardless of whether the value is nominal and includes, but is not limited to, a good, service, or intangible good that provided a benefit, regardless of how nominal, to the licensee other than advertising the brands and prices of alcoholic liquor produced by the manufacturer; sold by the outstate seller of beer, the outstate seller of wine, or the outstate seller of mixed spirit drink; or distributed by the wholesaler, except for consumable goods and those goods, services, or intangible goods approved by rule or order of the commission before January 1, 2014.
"Salesperson" means, for the purposes of this subsection only, a person who is employed by a vendor of spirits or a broker and who is licensed by the commission to sell, deliver, or promote, or otherwise assist in the sale of, spirits in this state.
Sec 609a.
A manufacturer or wholesaler shall file with the commission a schedule of net cash prices to the retail licensee for all brands of case and keg beer for its market area.
A manufacturer of wholesaler shall file with the commission a beer package price reduction for its market area. The manufacturer or wholesaler shall file the price reduction before its effective date. A price reduction under this subsection must continue for at least 90 days after the effective date.
The beer package price for a market area may be increased during the 90-day period described in subsection (2) for any of the following reasons:
The beer package price for a market area may be decreased during the 90-day period described in subsection (2) if both the following conditions are met:
A manufacturer or wholesaler shall not sell beer at a quantity discount.
A net cash price filed under subsection (1) and a price reduction filed under subsection (2) are exempt from disclosure under section 13 of the freedom of information act, 1976 PA 442, MLC 15.243, until I year after the net cash price or price reduction is filed, as applicable.
The Commission shall periodically compare a manufacturer’s or wholesaler’s filing under subsection (1) or (2) with the manufacturer’s or wholesaler’s tax filing under section 409.
The regulation described in this section is necessary for both of the following reasons:
Sec 609b.
A vendor representative and salesperson of a vendor of spirits, manufacturer of beer, manufacturer of wine, outstate seller of beer, outstate seller of wine, or wholesaler shall maintain accurate records of expenditures for each call on a retail licensee. The records must be maintained for 4 years and must be made available for commission inspection.
A vendor representative or salesperson of a spirits or wine, for promotional purposes, may purchase 1 drink for each customer of an on-premises licensee. A drink purchased under this subsection must be of the brand represented by the vendor representative or salesperson.
A vendor representative or salesperson of a manufacturer of beer, a wholesaler of beer, or an outstate seller of beer, for promotional purposes, may purchase 1 drink for each customer of an on-premises retail licensee subject to a total spending limit of $100.00 per day. A drink purchased under this subsection must be of the brand represented by the vendor representative or salesperson
A vendor representative or salesperson of a manufacturer of beer, a wholesaler of beer, or an outstate seller of beer shall not purchase a drink under subsection (3) more than twice per month at the same on-premises retail licensed location.
A licensee employed to deliver alcoholic liquor shall not purchase a drink of alcoholic liquor for a retail licensee while on duty or in the course of employment.
Sec. 609c.
A manufacturer that sells direct to a retailer as provided under section 203(19) or a wholesaler may refund to a retailer the amount the retailer paid for beer or wine, as applicable, or a manufacturer that sells direct to a retailer as provided under section 203(19) or a wholesaler may replace that beer or wine for any of the following reasons:
If beer is within 30 days of its out-of-date code, a manufacturer that sells direct to a retailer as provided under section 203(19) or a wholesaler may refund to a retailer the amount the retailer paid for the beer.
A manufacturer that sells direct to a retailer as provided under section 203(19) or a wholesaler may only issue a refund or replacement under this section for beer or wine that the manufacturer or wholesaler sold to the retailer.
Sec. 1013.
A sale or purchase of alcoholic liquor (includes beer) made in a state liquor store and by all types of licensees shall be for cash only, except for the following:
A customer’s charge account with a specially designated merchant who is not a holder of a license authorizing sale of alcoholic liquor for consumption on the premises.
A sale to a bona fide registered guest of a class B hotel or class A hotel, if the extension of credit does not exceed 30 days.
A sale to an industrial account if the extension of credit does not exceed 30 days.
A sale to a person holding an authorized credit card from a credit card agency.
A sale to a professional account, or an industrial account of class C licensee or a tavern, whose major business is food, if the extension of credit does not exceed 30 days.
A sale by a private club to a bona fide member.
Rule 15.
A manufacturer, an outstate seller of beer, an outstate seller of wine, or a wholesaler shall not sell or in any manner furnish to a retail licensee, and a retail licensee shall not accept, either of the following:
Advertising which has the name of the retail licensee on the advertising.
Money or other valuable consideration for advertising space in or upon the premises of the retail licensee.
Rule 19.
There shall not be cooperative advertising:
A manufacturer, an outstate seller of beer, or an outstate seller of wine may:
The name of a retail licensee shall not appear in the advertising of a manufacturer, an outstate seller of beer, an outstate seller of wine, or a wholesaler.
Rule 26.
A manufacturer or wholesaler shall file with the commission in Lansing, before January 1, April 1, July 1, and October 1 of each year, a schedule of the net cash prices to retail licensees for all wine by kind, type, size, and brand.
The prices filed shall not be changed during a quarterly period, unless approved by a written order of the commission. Approval for a price change shall not be granted for periods of less than 14 consecutive calendar days in duration.
A manufacturer or wholesaler shall not charge a retail licensee any fee in addition to the net cash prices filed in subrule (1) except for a split case fee. If a manufacturer or wholesaler charges a split case fee to a retail licensee, such a fee shall be at the same per unit rate, shall be nondiscriminatory, and shall not be based on a sliding scale.
A manufacturer or wholesaler shall not sell wine at a quantity discount.
The Commission’s order for on-premise brand promotions (issued October 27, 1999) It is the order of the Commission that wholesalers, manufacturers, outstate sellers, vendors of spirits and brokers may conduct on-premises brand promotions of their products at on-premises licensed accounts pursuant to Rule 436.1321 (1,2,3) with the proviso that all of the following conditions are complied with:
The Commission must be notified in writing a minimum of five (5) working days prior to the event of the date, time and location of the event.
On-premises promotional events shall be limited to three (3) per retail licensee within a calendar month.
The supplier or wholesaler conducting the promotion must have a licensed representative present at the on-premises establishment to set up the promotion and to remove any specially approved items upon completion of the promotion. A licensed representative must be present during the hours of the promotion when brand logoed merchandise is to be given away to consumers. Also, a licensed spirit representative must be present during all hours of a “Keep the Glass” promotion.
Suppliers, wholesalers and licensed representatives are prohibited from furnishing any alcoholic liquor to participating retail licensees.
Licensed representatives may distribute merchandise to consumers 21 years of age or older during on-premises promotion events. The maximum total value of all merchandise distributed to consumers on any given day, including prizes awarded pursuant to provision #6, is $100.00. No alcoholic beverage purchase or consumption may be the basis for distributing merchandise to consumers, with the exception of spirit brand logoed glassware pursuant to a “Keep the Glass” promotion as described in provision #8. All merchandise furnished to consumers must be distributed by a licensed representative of the sponsoring vendor, not by the retail licensee.
Licensed representatives may award merchandise to consumers through customer participation contests. Any contest awarding merchandise must be done in accordance with Commission rules, including issuance of the necessary entertainment permit to participating retailers. Random drawings awarding logoed prizes are required to be open to any person 21 years of age or older wishing to participate. Winners of random drawings need not be present to win.
Logoed wearing apparel may be worn by employees of the retail licensee during the hours of the on-premises promotion. All logoed wearing apparel must be removed from the retailer’s premises by the close of business on the day of the promotion.
Spirit brand logoed glassware may be distributed to consumers through “Keep the Glass” promotions, whereby consumers may purchase a drink in a spirit brand logoed container and may keep the container, during the hours of the on-premises promotion. Glassware distributed to consumers through “Keep the Glass” promotions shall not be considered part of the $100.00 limit of merchandise distributed to consumers. Brand logoed glassware may not contain the name of any retail licensee. The sponsoring vendor of spirits must have a licensed representative present during all hours of a “Keep the Glass” promotion. Brand logoed glassware must be removed from the retailer’s premises by the close of business on the day of the promotion. Brand logoed glassware may only be distributed to consumers through spirit “Keep the Glass” promotions. Brand logoed glassware may not be distributed to consumers in any other manner.
A maximum of two (2) spirit brand logoed glasses may be sold to an individual consumer through a “Keep the Glass” promotion during any given promotion.
Logoed coasters, napkins, stir rods, placemats, tubs and buckets may be used during the on-premises promotion. All such specially approved logoed items must be removed from the retailer’s premises by the close of business on the day of the promotion.
There may be no advertising of the on-premises promotion event by ANY PARTY off the licensed premises, through banners, flyers, radio advertising or by any other means.
Participating retail licensees may not receive any fee or other valuable consideration for participating in any on-premises promotion.
All persons attending the on-premises promotion events on behalf of the sponsoring vendor and promoting alcoholic beverages in any manner must hold a valid Salesperson or Vendor Representative license.
Participating retailers must comply with all MLCC statutes and rules.
Inside point of sale material may be utilized, provided that it is unilluminated and no more than 3,500 square inches in dimension.
The preceding provisions are intended to be the standards by which all on-premises brand promotions must comply. Any deviation from these standards without prior Commission Approval may result in citations against the sponsoring vendor and the participating retail licensee. The Commission reserves the right to modify these on-premises promotion Guidelines as deemed necessary. The Commission will continue to review on-premises promotion guidelines on a semiannual basis.
This order supersedes the Commission order of October 5, 1994 relative to on-premises brand promotions.
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