60
Beverage Media
January 2013
A
t the beginning of a full board
meeting, held in New York
City on December 19
th
, 2012,
the State Liquor Authority
(SLA) sent a strong message to whole-
salers and retailers. A wholesaler was
charged with multiple counts of selling
goods at prices other than that posted
on its retail schedule and selling goods
which were not posted at all. In addi-
tion, although not a listed charge, the
Authority investigated the wholesaler’s
method of operations. The Authority
found that the wholesaler sold its goods
to a limited number of retailers, rather
than to the entire retail market.
Following the hearing, the SLA ac-
cepted the wholesaler’s conditional no
contest plea. The wholesaler’s license
was suspended for a period of 30 days
during the month of January. During
that time, the wholesaler will be per-
mitted to remain open only to review
its mail, accept payments for deliveries
made prior to the suspension and report
retailers who were in default.
In order to sell in February, a whole-
saler must post its February prices to
retailers during the month of January.
The suspended wholesaler will not be
permitted to make such a price posting
and therefore will not be able to sell any
goods during February. For all intents
and purposes, this means the wholesaler
will be shut down for two full months. In
addition, the wholesaler must pay a fine
of $120,000 in two payments of $70,000
and $50,000. If the wholesaler fails to
make the payment on time, its license
will be revoked.
In order to get the Authority to ac-
cept its no contest plea, the wholesaler
agreed to the change its method of op-
eration so that it would no longer limit
its sales to a select number of retailers.
The wholesaler agreed to create and
publish a web page, accept applications
for credit from all retailers and create a
procedure to document contacts from
retailers seeking to purchase product.
The wholesaler further agreed to prop-
erly price post all items its sells.
The SLA is continuing its inves-
tigation to see if it is appropriate to
bring charges against the retailers that
benefited from the wholesaler’s miscon-
duct. Chairman Rosen recognized that
those retailers may not have known the
wholesaler was not charging them the
posted prices or that it was not mak-
ing the goods available to all retailers.
However, one thing is certain. The
Authority is responsible for seeing that
all licensees have a level playing field.
The Chairman believes he has sent out
a clear message: The Authority will not
tolerate violations of the Alcoholic
Beverage Control law which give se-
lect retailers a business advantage over
their competitors. The industry has
been warned. Licensees who ignore
that warning do it at their own peril.
Never Serve A Person
Who Is Visibly Intoxicated
Section 65 of New York’s Alcoholic
Beverage Control Law cautions explic-
itly against selling or serving alcohol to
any person actually or apparently under
the age of 21, anyone visibly intoxicat-
ed or anyone known to be a “habitual
drunkard.”
On October 15
th
, 2012, the Liquor
Authority brought a charge against a
Buffalo on-premise licensee for serving
a visibly intoxicated person. Allegedly,
this patron was so drunk, he fell to the
floor before leaving; and later his car hit
and killed a man riding his bike on the
side of the road.
Section 11-101 of New York’s Gen-
eral Obligation Law, commonly known
as the Dram Shop Act, creates a cause
of action on behalf of a person injured or
killed by an intoxicated person against
any person who unlawfully sold or assist-
ed the person in obtaining alcohol which
contributed to his or her intoxication.
Bottom line:
Never
serve a person
who is visibly intoxicated.
Keven Danow is an attorney representing members
of all three tiers of the Beverage Alcohol Industry and
a member of the firm of Danow, McMullan & Panoff,
P.C. 275 Madison Ave, NY, NY. 10022 (212-370-3744)
. This article is not intended to
give specific legal advice. Before taking any action, the
reader should consult with an attorney familiar with the
relevant facts and circumstances.
The SLA Sends Clear Warning
Actions Favoring a Few Retailers Will Not be Tolerated
By Keven Danow
The Sla Held Two Open
Meetings On January 17
th
.
The first concerned a request for a
change to Bulletin 583, which dates
back to 1999 and permitted suppli-
ers to create sealed, pre-wrapped
“combination packages” of liquor
and/or wine. Industry members had
asked the Authority to expand Bul-
letin 583, to permit wholesalers to
create combination packages from
their own inventory.
At the afternoon session, the SLA
held a full Board Hearing to review
the application of ShipCompliant
(SC), a technology and regulatory
compliance service company located
in Colorado. In essence, SC asked
the Authority to approve Internet
sales by wineries with direct shipping
licenses and retail licensees through
a non-licensed third party Internet
provider. If the SLA agreed, it would
be putting its imprimatur on all third-
party Internet wine sites that use the
SC platform.
For complete coverage and analysis
of these Authority’s decisions,
visit
BevNetwork.com
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