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Know The Law: Summit Yields New SLA Advisories

Posted on  | May 4, 2014   Bookmark and Share
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Following quickly on the heels of the second Beer, Wine and Cider Summit, on April 10th the New York State Liquor Authority approved 11 advisories. Below are some that have the most potential impact on licensees.

Restrictions on Electronic Benefit Transfers

Pursuant to the federal Middle Class Tax Relief and Job Creation Act of 2012, states are required to implement policies that prevent the use of federal public assistance benefits in any electronic transaction at certain businesses, including establishments that sell alcoholic beverages. The rules apply to package stores, C licensees and places that offer unclothed performances. Advice as to how to adjust ATM machines will be provided by the Liquor Authority on its website.

Advisory Adjusts Rules for Business Entertaining

Advisory 2014-8 extends the rules with regard to Business Entertaining and “Buy Backs,” as well as a newly created category for Brand Experiences.

The advisory defines “business meetings” and “business entertainment” as “a gathering of the supplier’s or distributor’s employees, and/or representatives from entities that conduct business with the supplier or distributor. The purpose of the gathering must be for a legitimate business purpose.” Such as the introduction of a new product. The advisory clearly excludes “holiday parties and other events to commemorate special occasions.”

The supplier or distributor is not limited by the amount it may spend for a business meeting or entertainment. There is no limit on the number of times a supplier or distributor may use a retailer’s establishment for such event. An employee of the supplier or distributor must be present. The meeting must be closed to the general public and the persons invited must receive an invitation. The media may be present. The event must be in a separate area. (One table would qualify.)

The Authority also revised rules for Buy Backs. These are events where the wholesaler or supplier purchases beverages from the on-premise retailer to serve the public. The limits have been raised: they were formerly six, and now they allow ten. The amount which could be spent was $600 now it is $700. There may also be a 20% tip. At the same time, the Authority made it clear that the suppliers and distributors cannot purchase food, non-alcoholic beverages or other items for the retailer. The supplier or distributor may advertise a “buy back” event and send invitations to specific members of the general public. However, attendance cannot be restricted to those invitees. Supplier and distributor will not be required to submit statements after such events but must keep records for two years.

The Advisory adds Brand Experience Events to the categories previously included. These are events which are hosted by the supplier or distributor but directed at the general public, with spending limit of $10,000.00 plus 20% gratuity. In addition, the supplier or wholesaler is permitted to donate goods to an event conducted by a not-for-profit organization, provided it does not select the retailer hosting the event. The supplier or wholesaler is permitted promotional consideration at the event.

Other Approved Advisories

Advisory 2014-11 permits a retailer to sell beer and cider in growlers. The retailer can sell cider in growlers only if the cider supplier designates the product as being sold as cider. If it designates the product to be sold as wine, it may not be sold in growlers. Other federal registration requirements may apply.

Advisory 2014-12 permits manufacturers and wholesalers with multiple licenses to deliver all of its products in the same vehicle at the same time, provided it has copies of all relevant licenses.

Advisory 2014-13 provides that the holder of a Marketing Permit issued to manufacturers, wholesalers and importers can designate another manufacturer as its representative to conduct tastings and similar permitted events. However, a beer wholesaler is prohibited from serving as a representative of a brewer.


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