66
Beverage Media
January 2013
T
he New York State Liquor Au-
thority held an open meeting
on January 17
th
, 2013 to discuss
changes in the rules related to
combination packages. Following that
meeting, the full board met to discuss a
request for a declaratory ruling relating
to internet sales.
Combination Packages
Section 101-b, which sets out the price
posting requirements for wine and spir-
its provides, “[T]he bottle and case price
to wholesalers, the net bottle and case
price paid by the seller, which prices,
in each instance, shall be individual
for each item and not in “combination”
with any other item…” As a result, sup-
pliers were not permitted to price post
and sell packages which contained more
than one brand of wine or spirits.
On November 1
st
, 1999, however,
the New York State Liquor Authority
published Bulletin No. 583 which per-
mitted a supplier to create “a sealed pre-
wrapped combination package which
includes only containers of liquor and/or
wine.” Following the publication of Bul-
letin No. 583, suppliers began to create
combination packages which they used
to introduce new products into the re-
tail market place and to encourage retail
licensees to purchase products which
they had not previously carried.
Industry members asked the Liquor
Authority to expand Bulletin No. 583,
to permit a wholesaler to create combi-
nation packages from its own inventory,
arguing that the creation of the packag-
es would be consistent with the purpose
and intent of the statute.
After listening to comments from
all interested parties, Chairman Ros-
en directed Special Counsel Thomas
Donohue to draft an Advisory which
would replace Bulletin No. 583. Before
the full board votes to adopt the Advi-
sory, a copy will be posted on the SLA
website and Industry Members will have
an additional opportunity to comment.
Whatever the Authority decides, it is
likely to add to what the Authority pre-
viously allowed. The options available
to retailers will not be reduced.
Third Party Internet Sales
That same day, in the afternoon, the Li-
quor Authority held a full Board Hear-
ing to review the application of Ship-
Compliant, a technology and regulatory
compliance service company located in
Colorado. ShipComplaint filed a request
for a declaratory ruling “that its national
MarketPlace Platform, operated as set
forth in this Petition, does not violate
New York Alcoholic Beverage Control
laws or related SLA Rules.”
In essence, ShipCompliant asked
the Liquor Authority to approve inter-
net sales by wineries with direct ship-
ping licenses and the sale of wine and
spirits by 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 ShipCompliant
platform. ShipCompliant described that
platform as follows:
Consumers select and place a request for
a Product from the items advertised by the
Licensed Seller on the Advertiser website
or other media, and the Advertiser uses the
MarketPlace Platform technology to for-
ward the consumer’s request to the Licensed
Seller for approval and sale at the Licensed
Seller’s premise. Product prices listed by
the Advertiser are specified by the Licensed
Seller. The consumer’s order request is
checked for compliance (age validation,
product compliance and so forth), as well
as inventory availability. Once availability
and compliance are confirmed, the Licensed
Seller must either accept or reject the order
request through an automated acceptance
utility that employs clickable buttons that
direct the licensee to either accept or reject
each request. If the order is accepted, the
Licensed Seller directs the fulfillment of the
order to the consumer.
Under the MarketPlace Platform
system, when the consumer’s credit card
is charged, funds go into an escrow ac-
count from which the gross proceeds
are divided
among the supplier, whole-
saler, retailer, advertiser, warehouse-
fulfillment center and shipper.
In the
documents attached to the request for
a declaratory ruling,
ShipCompliant
suggested that from an average order of
$59.40, ShipCompliant would receive
$1.00, the “Advertiser” $10.00 and the
licensed seller would receive $29.00.
In response to questioning led by
Chairman Rosen, it became clear that:
1) the Liquor Authority had conducted
an investigation into the actual meth-
ods of operation of some of the “Adver-
tisers” selling in or into New York using
ShipCompliant’s MarketPlace Platform;
and 2) some of the Advertisers already
working with ShipCompliant in New
York engaged in practices which did
not conform to the protocols set forth
in the request for a declaratory ruling.
For instance, agreements among Ship-
Compliant, a retailer and an Advertiser
included a provision that the retailer
SLA Takes on Two Contentious Issues
Combo Packs and Third Party Agents Under the Microscope
By Keven Danow
know
the
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