ALCOHOLIC BEVERAGE CODE
CHAPTER 102. INTRA-INDUSTRY RELATIONSHIPS
SUBCHAPTER A. GENERAL PROVISIONS
§ 102.01. TIED HOUSE PROHIBITED. (a) In this section,
"tied house" means any overlapping ownership or other prohibited
relationship between those engaged in the alcoholic beverage
industry at different levels, that is, between a manufacturer and a
wholesaler or retailer, or between a wholesaler and a retailer, as
the words "wholesaler," "retailer," and "manufacturer" are
ordinarily used and understood, regardless of the specific names
given permits under Subtitle A, Title 3, of this code.
(b) In considering an original or renewal application for a
permit issued under Subtitle A, Title 3, of this code, the
commission or administrator may make any investigation or request
any additional information necessary to enforce this section and to
provide strict adherence to a general policy of prohibiting the
tied house and related practices. The activities prohibited by
this section are unfair competition and unlawful trade practices.
(c) No person having an interest in a permit issued under
Subtitle A, Title 3, of this code may secure or hold, directly or
indirectly, an ownership interest in the business or corporate
stocks, including a stock option, convertible debenture, or similar
interest, in a permit or business of a permittee of a different
level who maintains licensed premises in Texas.
(d) No person may act or serve as officer, director, or
employee of the businesses of permittees at different levels.
(e) No permittee may own the premises, fixtures, or
equipment of a permittee of a different level.
(f) No permittee may secure or in any manner obtain the use
of any premises, fixtures, or equipment on the credit of a permittee
of a different level.
(g) No permittee may loan to, or by means of his credit
secure a loan for, a permittee of a different level. If a permittee
secures a loan from a source outside the state, there is a
presumption of a tied house relationship or subterfuge, and the
permittee securing the loan has the burden of showing that he has
not violated this section.
(h) No permittee may enter with a permittee of a different
level or with another person or legal entity into a conspiracy or
agreement to control or manage, financially or administratively,
directly or indirectly, in any form or degree, the business or
interests of a permittee of a different level.
(i) No permittee may enter with another permittee into any
type of profit-sharing agreement or any agreement relating to the
repurchase of any assets or any agreement attempting to effectuate
the shipment or delivery of an alcoholic beverage on consignment.
(j) On finding that a person has violated any provision of
Subsections (c) through (i) of this section, the commission or
administrator shall suspend for not less than six months or cancel
the permit of any permittee involved. A person who held or had an
interest in a permit cancelled under this subsection is ineligible
to hold or have an interest in a permit for one year after the
cancellation.
(k) This section does not apply to the application for
renewal of a permit held by an applicant who was engaged in the
legal alcoholic beverage business in this state under a charter or
permit before August 24, 1935, or to an application for a
nonresident seller's or wholesaler's permit held by an applicant
who continuously has been the holder of a permit of that type since
January 1, 1941.
Acts 1977, 65th Leg., p. 498, ch. 194, § 1, eff. Sept. 1, 1977.
§ 102.02. PROVIDING SAMPLES. Notwithstanding any other
provision of this code, the holder of a wholesaler's permit or the
holder's agent, representative, or employee may furnish or give a
sample of liquor to a holder of a permit authorizing the sale of
that category of alcoholic beverage at retail if the retail
permittee has not previously purchased that brand from that
wholesaler permittee. The wholesaler may give the retail permittee
not more than 750 milliliters of any brand of distilled spirits, not
more than three liters of any brand of wine in that package, and not
more than one six-pack of any other alcoholic beverage so packaged.
The retail permittee or the permittee's agent, servant, or employee
may sample the product on the licensed premises only if the
wholesaler or the wholesaler's agent, servant, or employee is
present.
Added by Acts 1993, 73rd Leg., ch. 934, § 64, eff. Sept. 1, 1993.
§ 102.03. PERSONS BARRED FROM INTEREST IN PREMISES OF
RETAIL LIQUOR OUTLET. (a) This section applies to the holder of a
brewer's, distiller's and rectifier's, winery, wholesaler's, class
B wholesaler's, or wine bottler's permit.
(b) No holder of a permit named in Subsection (a) of this
section may directly or indirectly, or through a subsidiary,
affiliate, agent, employee, officer, director, or firm member, own
an interest of any kind in the premises where a package store
permittee, wine only package store permittee, or mixed beverage
permittee conducts his business.
Acts 1977, 65th Leg., p. 499, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1979, 66th Leg., p. 2118, ch. 819, § 9, eff. June
13, 1979; Acts 1983, 68th Leg., p. 1352, ch. 278, § 52, eff.
Sept. 1, 1983.
§ 102.04. PERSONS BARRED FROM INTEREST IN MIXED BEVERAGE
BUSINESS. (a) This section applies to any person who has an
interest in the business of a distiller-rectifier, brewer,
wholesaler, class B wholesaler, winery, wine bottler, or local
distributor's permittee. This section also applies to the agent,
servant, or employee of a person who has an interest in one of those
businesses.
(b) Except as permitted in Section 23.01 of this code, no
person to whom this section applies may:
(1) have a direct or indirect interest in the
business, premises, equipment, or fixtures of a mixed beverage
establishment;
(2) furnish or lend any money, service, or other thing
of value to a mixed beverage permittee or guarantee the fulfillment
of a financial obligation of a mixed beverage permittee;
(3) enter or offer to enter into an agreement,
condition, or system which in effect amounts to the shipment and
delivery of alcoholic beverages on consignment;
(4) furnish, rent, lend, or sell to a mixed beverage
permittee any equipment, fixtures, or supplies used in the selling
or dispensing of alcoholic beverages;
(5) pay or make an allowance to a mixed beverage
permittee for a special advertising or distributing service, or
allow the permittee an excessive discount;
(6) offer to a mixed beverage permittee a prize,
premium, or other inducement, except as permitted by Section
102.07(b) of this code; or
(7) advertise in the convention program or sponsor a
function at a meeting or convention or a trade association of
holders of mixed beverage permits, unless the trade association was
incorporated before 1950.
Acts 1977, 65th Leg., p. 499, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1977, 65th Leg., p. 1183, ch. 453, § 9, eff.
Sept. 1, 1977; Acts 1979, 66th Leg., p. 2118, ch. 819, § 10, eff.
June 13, 1979; Acts 1983, 68th Leg., p. 1352, ch. 278, § 53, eff.
Sept. 1, 1983.
§ 102.05. HOTEL: MULTIPLE INTERESTS AUTHORIZED. A
hotel may hold a package store permit, mixed beverage permit, wine
and beer retailer's permit, and retail dealer's license if the
businesses are completely segregated from each other.
Acts 1977, 65th Leg., p. 499, ch. 194, § 1, eff. Sept. 1, 1977.
§ 102.06. RELATIONSHIP BETWEEN AGENT OR MANUFACTURER'S
AGENT AND PACKAGE STORE. No holder of an agent's or manufacturer's
agent's permit may directly or indirectly have an interest in a
package store permit or wine only package store permit or be
residentially domiciled with a person who has a financial interest
in a package store permit or wine only package store permit.
Acts 1977, 65th Leg., p. 499, ch. 194, § 1, eff. Sept. 1, 1977.
§ 102.07. PROHIBITED DEALINGS WITH RETAILER OR
CONSUMER. (a) Except as provided in Subsections (b), (d), and
(g), no person who owns or has an interest in the business of a
distiller, brewer, rectifier, wholesaler, class B wholesaler,
winery, or wine bottler, nor the agent, servant, or employee of such
a person, may:
(1) own or have a direct or indirect interest in the
business, premises, equipment, or fixtures of a retailer;
(2) furnish, give, or lend any money, service, or
thing of value to a retailer;
(3) guarantee a financial obligation of a retailer;
(4) make or offer to enter an agreement, condition, or
system which will in effect amount to the shipment and delivery of
alcoholic beverages on consignment;
(5) furnish, give, rent, lend, or sell to a retail
dealer any equipment, fixtures, or supplies to be used in selling or
dispensing alcoholic beverages, except that alcoholic beverages
may be packaged in combination with other items if the package is
designed to be delivered intact to the ultimate consumer and the
additional items have no value or benefit to the retailer other than
that of having the potential of attracting purchases and promoting
sales;
(6) pay or make an allowance to a retailer for a
special advertising or distribution service;
(7) allow an excessive discount to a retailer; or
(8) offer a prize, premium, gift, or similar
inducement to a retailer or to the agent, servant, or employee of a
retailer.
(b) A permittee covered by Subsection (a) of this section
may furnish to a retailer without cost advertising specialties
showing the name of the product advertised. The total value of all
advertising specialties for any one brand furnished to a retailer
in any one calendar year may not exceed $78. Not more than once a
year, the administrator on the administrator's own motion or on the
motion of the permittee may increase or decrease the total amount of
advertising specialties permitted under this subsection by not more
than six percent based on the consumer price index and previous
adjustments, if any. For the purposes of this subsection,
"consumer price index" means the annual average over a calendar
year of the consumer price index (all items, United States city
average) published monthly by the Bureau of Labor Statistics,
United States Department of Labor, or its successor in function.
Permittees covered by Subsection (a) of this section may not pool or
combine their dollar limitations to provide a retailer with
advertising specialties valued in excess of the maximum permitted
under this subsection.
(c) No person who owns or has an interest in the business of
a package store or wine only package store, nor the agent, servant,
or employee of the person, may allow an excessive discount on
liquor.
(d) A permittee covered under Subsection (a) of this section
may offer prizes, premiums, or gifts to a consumer if the offer is
national in scope and legally offered and conducted in 30 states or
more. The use of rebates or coupons redeemable by the public for
the purchase of alcoholic beverages is prohibited. The holder of a
winery permit may furnish to a retailer without cost recipes,
recipe books, book matches, cocktail napkins, or other advertising
items showing the name of the winery furnishing the items or the
brand name of the product advertised if the individual cost of the
items does not exceed $1.
(e) A permittee covered under Subsection (a) of this section
may conduct a sweepstakes promotion if the promotion is part of a
nationally conducted promotional activity legally offered and
conducted at the same time in 30 or more states. A purchase or entry
fee may not be required of any person to enter a sweepstakes event
authorized under this subsection. A person affiliated with the
alcoholic beverage industry may not receive a prize from a
sweepstakes promotion.
(f) Notwithstanding Subsection (a) of this section, Section
108.05 of this code, or any other provision of this code, a holder
of a brewer's permit, nonresident brewer's permit, distiller's and
rectifier's permit, winery permit, nonresident seller's permit,
manufacturer's license, or nonresident manufacturer's license may,
in order to promote the brand name of the permittee's or licensee's
products, contract with a person licensed under the Texas Racing
Act (Article 179e, Vernon's Texas Civil Statutes) for on-site
advertising signs, for advertising in programs, and to supplement
purses for races even though the licensees under that Act or the
owners or operators of the racing facilities also hold a mixed
beverage permit or other permit or license under this code. In
addition, a permittee or licensee described by this subsection may
contract for off-site advertising promoting specific races. A part
of the cost of an advertisement or promotion authorized by this
section may not be charged to or paid, directly or indirectly, by
the holder of a wholesale permit, general class B wholesaler's
permit, local class B wholesaler's permit, local distributor's
permit, general distributor's license, or local distributor's
license, except through the price paid by that holder for products
purchased from the holder's supplier.
(g) Subsection (a) does not prohibit a permittee covered
under Subsection (a) from prearranging or preannouncing a
promotional activity otherwise permitted by this code with a
retailer about a promotional activity to be held on the retailer's
premises. A holder of a wholesaler's or class B wholesaler's permit
may prearrange a promotional activity only for distilled spirits or
wine. A permittee may not:
(1) preannounce a promotion to a consumer, if the
permittee is the holder of a wholesaler's or class B wholesaler's
permit; or
(2) preannounce the purchase of wine or distilled
spirits to a consumer.
Acts 1977, 65th Leg., p. 500, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1979, 66th Leg., p. 2118, ch. 819, § 11, eff.
June 13, 1979; Acts 1989, 71st Leg., ch. 859, § 1, eff. June 14,
1989; Acts 1993, 73rd Leg., ch. 934, § 65, eff. Sept. 1, 1993;
Acts 1999, 76th Leg., ch. 424, § 1, eff. Sept. 1, 1999.
§ 102.08. WHOLESALER: LIQUOR MANUFACTURED BY
AFFILIATE. (a) No holder of a wholesaler's permit may own,
possess, or sell any liquor manufactured, distilled, or rectified
by a person, firm, or corporation that is directly or indirectly
affiliated with the wholesale permittee, regardless of whether the
affiliation is corporate, by management, direction, or control, or
through an officer, director, agent, or employee.
(b) This section does not apply to a holder of a
wholesaler's permit who held the permit on January 1, 1941, and has
held it continuously since that date, who was on that date selling
liquor manufactured, distilled, or rectified by such an affiliate.
Acts 1977, 65th Leg., p. 500, ch. 194, § 1, eff. Sept. 1, 1977.
§ 102.09. WHOLESALER: INTEREST IN DISTILLER AND
RECTIFIER. No holder of a wholesaler's permit may be affiliated
with the holder of a distiller's and rectifier's permit, or with a
person, firm, or corporation engaged in distilling or rectifying
liquor inside or outside this state, regardless of whether the
affiliation is direct or indirect, through an officer, director,
agent, or employee, or by management, direction, or control.
Acts 1977, 65th Leg., p. 500, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1983, 68th Leg., p. 1353, ch. 278, § 54, eff.
Sept. 1, 1983.
§ 102.10. DISTILLER AND RECTIFIER: INTEREST IN
WHOLESALER. (a) This section applies to the following:
(1) a holder of a distiller's and rectifier's permit;
(2) a person, firm, or corporation engaged in
distilling or rectifying liquor, either inside or outside this
state;
(3) an officer, director, agent, or employee of an
entity named in Subdivision (1) or (2) of this subsection; or
(4) an affiliate of an entity named in Subdivision (1)
or (2) of this subsection, regardless of whether the affiliation is
corporate or by management, direction, or control.
(b) No entity named in Subsection (a) of this section may
have any interest in the permit, business, assets, or corporate
stock of a holder of a wholesaler's permit.
Acts 1977, 65th Leg., p. 500, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1983, 68th Leg., p. 1353, ch. 278, § 55, eff.
Sept. 1, 1983.
§ 102.11. MANUFACTURER OR DISTRIBUTOR: PROHIBITED
INTERESTS. No manufacturer or distributor directly or indirectly,
or through a subsidiary, affiliate, agent, employee, officer,
director, or firm member, may:
(1) own any interest in the business or premises of a
retail dealer of beer;
(2) hold or have an interest in a license to sell
brewery products for on-premises consumption, except to the extent
that a manufacturer's license permits on-premises consumption.
Acts 1977, 65th Leg., p. 501, ch. 194, § 1, eff. Sept. 1, 1977.
§ 102.12. COMMERCIAL BRIBERY BY MANUFACTURER OR
DISTRIBUTOR. No manufacturer or distributor directly or
indirectly, or through a subsidiary, affiliate, agent, employee,
officer, director, or firm member, may give or permit to be given
money or any thing of value in an effort to induce agents,
employees, or representatives of customers or prospective
customers to influence their employers or principals to purchase or
contract to purchase brewery products from the manufacturer or
distributor or to refrain from buying those products from other
persons.
Acts 1977, 65th Leg., p. 501, ch. 194, § 1, eff. Sept. 1, 1977.
§ 102.13. EXCLUSIVE OUTLET AGREEMENT AS TO BREWERY
PRODUCTS. No manufacturer or distributor directly or indirectly,
or through a subsidiary, affiliate, agent, employee, officer,
director, or firm member, may require, by agreement or otherwise,
that a retailer engaged in the sale of brewery products purchase any
of those products from him to the total or partial exclusion of the
products sold or offered for sale by a competitor or require the
retailer to take or dispose of a certain quota of the product.
Acts 1977, 65th Leg., p. 501, ch. 194, § 1, eff. Sept. 1, 1977.
§ 102.14. MANUFACTURER OR DISTRIBUTOR: FURNISHING
EQUIPMENT OR FIXTURES. (a) No manufacturer or distributor
directly or indirectly, or through a subsidiary, affiliate, agent,
employee, officer, director, or firm member, may furnish, give,
rent, lend, or sell any equipment, fixtures, or supplies to a person
engaged in selling brewery products for on-premises consumption.
(b) This section does not apply to equipment, fixtures, or
supplies furnished, given, loaned, rented, or sold before November
16, 1935, except that transactions made before that date may not be
used as consideration for an agreement made after that date with
respect to the purchase of brewery products. If a manufacturer or
distributor of brewery products or an agent or employee of one of
them removes the equipment, fixtures, or supplies from the premises
of the person to whom they were furnished, given, loaned, rented, or
sold, the exemption granted by this subsection no longer applies to
the equipment, fixtures, or supplies.
(c) Notwithstanding any other provision of this code, a
manufacturer or distributor may, with written approval of the
administrator, sell for cash devices designed to extract brewery
products from legal containers subject to the following conditions:
(1) the legal containers must not exceed a one-eighth
barrel capacity and must not be reused or refilled;
(2) the selling price of such devices may be no less
than the cost of acquisition to the manufacturer or distributor;
and
(3) such devices which extract brewery products from
legal containers covered by this section may not be furnished,
given, rented, or sold by the manufacturer or distributor to a
licensee or permittee authorized to sell or serve brewery products
for on-premise consumption, or to the ultimate consumer.
Acts 1977, 65th Leg., p. 501, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1981, 67th Leg., p. 2664, ch. 719, § 1, eff. June
16, 1981.
§ 102.15. MANUFACTURER OR DISTRIBUTOR: PROHIBITED
DEALINGS WITH RETAILER. No manufacturer or distributor directly
or indirectly, or through a subsidiary, affiliate, agent, employee,
officer, director, or firm member, may:
(1) furnish, give, or lend any money or other thing of
value to a person engaged or about to be engaged in selling brewery
products for on-premises or off-premises consumption, or give the
person any money or thing of value for his use, benefit, or relief;
or
(2) guarantee the repayment of a loan or the
fulfillment of a financial obligation of a person engaged in or
about to be engaged in selling beer at retail.
Acts 1977, 65th Leg., p. 502, ch. 194, § 1, eff. Sept. 1, 1977.
§ 102.16. UNLAWFUL AGREEMENTS. (a) A brewer,
distiller and rectifier, winery permittee, or alcoholic beverage
manufacturer, or the agent, servant, or employee of any of them,
commits an offense if he orally or in writing enters or offers to
enter into an agreement or other arrangement with a wholesaler or
other person in the state:
(1) by which a person is required or influenced, or
that is intended to require or influence a person, to purchase,
otherwise obtain, produce, or require a certain volume or quota of
business, more or less, of one or more types or brands of alcoholic
beverages, either in a certain area, in a certain period of time, or
on fulfillment of any condition; or
(2) to require or influence a person, or attempt to
require or influence a person, to sell an alcoholic beverage in a
manner contrary to law or in a manner calculated to induce a
violation of the law.
(b) The commission or administrator shall investigate
suspected violations of this section, and if either of them finds or
has good reason to believe that this section has been or is being
violated, the commission or administrator shall give the affected
parties notice of hearing as provided in this code. On finding that
a person has violated or is violating a provision of this section,
the commission or administrator shall enter an order prohibiting
the violator or his agents to directly or indirectly ship any of his
goods into the state for a period not to exceed one year. No person
may violate that order.
(c) The commission shall adopt necessary rules to
effectuate this section.
Acts 1977, 65th Leg., p. 502, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1983, 68th Leg., p. 1353, ch. 278, § 56, eff.
Sept. 1, 1983.
§ 102.17. CONTRACT FOR SALE OF LIQUOR. A brewer,
distiller and rectifier, winery permittee, manufacturer, or
nonresident seller of liquor and the holder of a wholesaler's
permit may enter into a contract for the sale and purchase of a
specified quantity of liquor to be delivered over an agreed period
of time, but only if the contract is first submitted to the
commission or administrator and found by the commission or
administrator not to be calculated to induce a violation of this
code.
Acts 1977, 65th Leg., p. 502, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1983, 68th Leg., p. 1354, ch. 278, § 57, eff.
Sept. 1, 1983.
§ 102.18. MANUFACTURER: PROHIBITED
INTERESTS. (a) This section applies to the following:
(1) a holder of a manufacturer's or nonresident
manufacturer's license;
(2) an officer, director, agent, or employee of an
entity named in Subdivision (1) of this subsection; or
(3) an affiliate of an entity named in Subdivision (1)
of this subsection, regardless of whether the affiliation is
corporate or by management, direction, or control.
(b) No entity named in Subsection (a) of this section may
have any interest in the license, business, assets, or corporate
stock of a holder of a general, local, or branch distributor's
license.
Added by Acts 1979, 66th Leg., p. 1973, ch. 777, § 24, eff. Aug.
27, 1979.
§ 102.19. PROMOTIONAL GIFT WINE. A holder of a winery
permit may give one or more unopened bottles of Texas-made wine
produced or bottled by the winery to a person 21 years of age or
older on the premises of a convention center or civic center that
holds a mixed beverage permit if no charge is made by the winery or
by the mixed beverage permittee for the wine. A recipient of a
bottle of wine under this section must take the unopened gift bottle
off the premises of the mixed beverage permittee.
Added by Acts 1993, 73rd Leg., ch. 649, § 1, eff. Aug. 30, 1993.
§ 102.20. RESTOCKING AND ROTATION OF ALCOHOLIC BEVERAGES
AUTHORIZED. Restocking of a display and rotation of alcoholic
beverage stock in a retail establishment from the retailer's
storeroom, salesroom, display counter, or cooler by a
representative of a wholesaler or distributor is lawful. The
commission or administrator may publish guidelines regarding this
activity as the commission or administrator determines to be
necessary.
Added by Acts 1993, 73rd Leg., ch. 934, § 66, eff. Sept. 1, 1993.
Renumbered from V.T.C.A., Alcoholic Beverage Code § 102.19 by
Acts 1995, 74th Leg., ch. 76, § 17.01(1), eff. Sept. 1, 1995.
SUBCHAPTER B. REGULATION OF CREDIT TRANSACTIONS
§ 102.31. CASH PAYMENT REQUIRED. (a) This section
applies to:
(1) the sale of beer or its containers or the original
packages in which it is received, packaged, or contained by a
distributor's licensee to a retail dealer's on-premise or
off-premise licensee, a wine and beer retailer's permittee, or a
wine and beer retailer's off-premise permittee; and
(2) the sale of malt beverages by a local distributor's
permittee, or by any licensee authorized to sell those beverages
for resale, to a mixed beverage or daily temporary mixed beverage
permittee.
(b) No person directly or indirectly, or through a
subsidiary, affiliate, agent, employee, officer, director, or firm
member, may make a sale covered by this section except for cash on
or before delivery to the purchaser.
(c) A person who engages in a subterfuge by which credit is
extended to the purchaser violates this code. Acceptance of a
postdated check is not a cash sale, but a valid check or draft
payable on demand may be accepted as cash. If a check or draft is
accepted in payment, it must be deposited in the bank for payment or
presented for payment within two days after it is received. If the
check or draft is dishonored by the drawee, the licensee or
permittee who accepted it shall report that fact to the commission
within two days after receiving notice of dishonor. The report
shall be on a form prescribed by the commission and shall contain
any information the commission requires.
(d) Sundays and legal holidays are not counted in
determining time periods under this section.
(e) The commission may promulgate rules to give effect to
this section.
Acts 1977, 65th Leg., p. 502, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1979, 66th Leg., p. 55, ch. 33, § 8, eff. Aug. 27,
1979.
§ 102.32. SALE OF LIQUOR: CREDIT RESTRICTIONS. (a) In
this section:
(1) "Wholesale dealer" means a wholesaler, class B
wholesaler, winery, wine bottler, or local distributor's
permittee.
(2) "Retailer" means a package store, wine only
package store, wine and beer retailers, wine and beer retailer's
off-premise, or mixed beverage permittee, any other retailer, or a
private club registration permittee.
(3) "Month" means a calendar month.
(b) No wholesale dealer may sell and no retailer may
purchase liquor except for cash or on terms requiring payment by the
retailer in accordance with Subsection (c) of this section.
(c) On purchases made from the 1st through 15th day of a
month, payment must be made on or before the 25th day of that month.
On purchases made on the 16th through the last day of a month,
payment must be made on or before the 10th day of the following
month.
(d) Each delivery of liquor shall be accompanied by an
invoice giving the date of purchase. If a retailer becomes
delinquent in the payment of an account for liquor, the wholesale
dealer immediately shall report that fact in writing to the
commission or administrator. No wholesale dealer may sell any
liquor to a retailer who is delinquent until the delinquent account
is paid in full and cleared from the records of the commission. An
account becomes delinquent if it is not paid when it is required to
be paid under Subsection (c) of this section.
(e) A wholesale dealer who accepts a postdated check, a note
or memorandum, or participates in a scheme to assist a retailer in
the violation of this section commits an offense.
(f) The commission shall adopt rules and regulations to give
effect to this section.
Acts 1977, 65th Leg., p. 503, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1979, 66th Leg., p. 2119, ch. 819, § 12, eff.
June 13, 1979.
SUBCHAPTER C. TERRITORIAL LIMITS ON SALE OF BEER
§ 102.51. SETTING OF TERRITORIAL LIMITS. (a) Each
holder of a manufacturer's or nonresident manufacturer's license
shall designate territorial limits in this state within which the
brands of beer the licensee manufactures may be sold by general,
local, or branch distributor's licensees.
(b) Each holder of a general, local, or branch distributor's
license shall enter into a written agreement with each manufacturer
from which the distributor purchases beer for distribution and sale
in this state setting forth the sales territory within which each
brand of beer purchased by that distributor may be distributed and
sold. No holder of a general, local, or branch distributor's
license shall make any sales of any brand of beer outside the sales
territory specified in the written agreement. No such agreement
shall interfere with the rights of retailers to purchase beer as
provided in Section 102.53. A manufacturer may not assign all or
any part of the same sales territory to more than one distributor.
A copy of the agreement and any amendments to it shall be filed with
the administrator.
(c) This Act is promulgated pursuant to the authority of the
state under the provisions of the Twenty-first Amendment to the
United States Constitution to promote the public interest in the
fair, efficient, and competitive distribution of beer, to increase
competition in such areas, and to assure product quality control
and accountability by allowing manufacturers to assign sales
territories within this state.
Acts 1977, 65th Leg., p. 504, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1983, 68th Leg., p. 5229, ch. 959, § 1, eff. Aug.
29, 1983; Acts 1995, 74th Leg., ch. 152, § 1, eff. May 19, 1995.
§ 102.52. RIGHTS OF DISTRIBUTORS. Nothing in Section
102.51 of this code limits or alters the right of a holder of a
general, local, or branch distributor's license to sell beer to any
other holder of a general, local, or branch distributor's license,
except that a distributor who has purchased beer from another
distributor may distribute and sell the beer only within a
territory for which the manufacturer of the brand has designated
that it may be sold by the general, local, or branch distributor
making the purchase.
Acts 1977, 65th Leg., p. 504, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1979, 66th Leg., p. 55, ch. 33, § 9, eff. Aug. 27,
1979; Acts 1993, 73rd Leg., ch. 934, § 67, eff. Sept. 1, 1993.
§ 102.53. RIGHTS OF RETAILERS. Nothing in Section
102.51 or 102.52 of this code limits or alters the right of a holder
of a retail license or permit to purchase beer at the licensed
premises of any general, local, or branch distributor's licensee in
the state and transport that beer to his licensed premises, except
that the retailer may sell the beer only within a territory for
which the manufacturer of the brand has designated that it may be
sold by a distributor.
Acts 1977, 65th Leg., p. 504, ch. 194, § 1, eff. Sept. 1, 1977.
Amended by Acts 1979, 66th Leg., p. 55, ch. 33, § 10, eff. Aug.
27, 1979.
§ 102.54. ADDITIONAL REQUIREMENTS FOR APPLICANTS FOR
DISTRIBUTOR'S LICENSE. (a) In addition to any other requirements
necessary for issuance or renewal of a distributor's license, the
commission or administrator shall require an applicant for a
license or a holder of a license to show that the applicant or
holder:
(1) has entered into or will acquire a written
agreement designating an assigned territory from a manufacturer in
accordance with this subchapter and Subchapter D;
(2) has received or has applied for and will maintain
all licenses or permits required to engage in business in the
assigned territory as a holder of a distributor's license,
including any state or federal licenses or permits;
(3) has ordered, received, and stored or has committed
to order, receive, and store a sufficient amount of beer that the
distributor is authorized to sell to ensure that the distributor
can supply the reasonable needs of all retailers in the assigned
territory;
(4) has received and stored or has committed to
receive and store beer received from a manufacturer in a manner
complying with a product quality control standard established by
the manufacturer or the commission; and
(5) has or will have the ability to sell, deliver, and
promote each brand of beer sold by the distributor to all retailers
in the assigned territory:
(A) in a manner that complies with the product
quality control standards of the manufacturer or of the commission;
and
(B) on a continuing and recurring basis in
response to reasonable market demand for a brand of beer by the
retailer or the retailer's customers in the assigned territory.
(b) In determining whether an applicant for or holder of a
distributor's license meets the requirement of Subsection (a)(5),
the commission or administrator may require the applicant or holder
to show that the applicant or holder has or will have:
(1) storage facilities of a sufficient size to store
each brand of beer in an amount equal to the demand for the product
from all retailers in the holder's or applicant's assigned
territory;
(2) an inventory or a commitment to acquire an
inventory of each brand of beer in an amount equal to the demand for
the brand from all retailers in the holder's or applicant's assigned
territory;
(3) a sufficient number of employees to provide the
holder or applicant with the ability:
(A) to sell, deliver on a reasonably prompt
basis, and promote each brand of beer to all retailers in the
holder's or applicant's assigned territory; and
(B) to prepare and submit in a timely manner any
fee or tax payments or reports required by any authorized
governmental regulatory authority, including the Bureau of
Alcohol, Tobacco, and Firearms and the commission; and
(4) a sufficient number of delivery vehicles and
rolling stock to provide the holder or the applicant with the
capability of transporting, selling, delivering, or promoting each
brand of beer to all retailers in the assigned territory.
(c) The commission or administrator shall refuse to approve
an application for a distributor's license or shall refuse to renew
a distributor's license if the commission or administrator finds
the holder or applicant has failed to comply with any of the
requirements of Subsection (a) or (b).
(d) In this section:
(1) "Distributor" means a person who holds a license
issued under Chapter 64 or 65.
(2) "Manufacturer" means a person who holds a license
issued under Chapter 62 or 63.
(3) "Retailer" means a person who holds a permit or
license issued under Chapters 25 through 34, Chapter 48, Chapters
69 through 72, or Chapter 74.
Added by Acts 1995, 74th Leg., ch. 152, § 2, eff. May 19, 1995.
§ 102.55. TERRITORIAL ASSIGNMENTS;
DEFINITIONS. (a) In this subchapter and Subchapter D, and as the
terms relate to an agreement between a manufacturer and a
distributor describing the sales territory in which a distributor
may sell the beer of a manufacturer:
(1) "Brand" means any word, name, group of letters,
symbol, or trademark or a combination of any word, name, group of
letters, symbol, or trademark that is adopted and used by a
manufacturer on a label or on packaging to identify a specific beer
or malt beverage and to distinguish the beer or malt beverage
product from the label or packaging of another beer or malt beverage
produced or marketed by any manufacturer. The term does not include
the name of the manufacturer unless the name of the manufacturer is
included in the name of the brand.
(2) "Brand extension" means a brand that incorporates
a brand name or brand logo, or a substantial part of an existing
brand name or brand logo, of the same manufacturer.
(b) A brand extension is not a new or different brand.
(c) A manufacturer shall assign a brand extension to the
distributor to whom the brand was originally assigned, if the
distributor elects to distribute and sell the brand extension.
Added by Acts 1995, 74th Leg., ch. 152, § 2, eff. May 19, 1995.
§ 102.56. APPLICATION OF TERRITORIAL LIMITS TO CERTAIN
PERMIT HOLDERS. (a) This section applies only to a holder of a
local distributor's permit under Chapter 23 that operates in a
county in which 8,000 or more alcoholic beverage licenses or
permits of any type have been issued under this code and are in
effect. Subsections (b) and (d) apply only to the delivery of a
brand of ale, beer, or malt liquor to a holder of a mixed beverage
permit or a private club permit whose premises is located in a
county in which 8,000 or more alcoholic beverage licenses or
permits of any type have been issued under this code and are in
effect.
(b) A holder of a local distributor's permit under Chapter
23 who has purchased a brand of ale, beer, or malt liquor from the
holder of a general, local, or branch distributor's license or from
the holder of a general class B wholesaler's or local class B
wholesaler's permit may not deliver the brand of ale, beer, or malt
liquor to any holder of a mixed beverage permit or private club
permit whose premises is located inside that county and outside the
territory assigned to the distributor or wholesaler who sold the
product under a territorial limit agreement authorized by this
subchapter.
(c) Except as provided by Subsection (d), a holder of a
local distributor's permit may purchase a brand of ale, beer, or
malt liquor only from a distributor or wholesaler who has been
assigned the territory where the premises of the holder of the local
distributor's permit is located.
(d) A holder of a local distributor's permit who delivers a
brand of ale, beer, or malt liquor to a holder of a mixed beverage
permit or private club permit whose premises is located inside that
county and outside the assigned territory where the premises of the
holder of a local distributor's permit is located must purchase the
brand of ale, beer, or malt liquor from a distributor or wholesaler
who has been assigned the territory where the premises of the holder
of the mixed beverage or private club permit is located.
Added by Acts 1997, 75th Leg., ch. 1164, § 1, eff. Sept. 1, 1997.
SUBCHAPTER D. BEER INDUSTRY FAIR DEALING LAW
§ 102.71. DEFINITIONS. In this subchapter:
(1) "This Act" means this subchapter which shall have
the short title and may be cited as the "Beer Industry Fair Dealing
Law."
(2) "Agreement" means any contract, agreement, or
arrangement, whether expressed or implied, whether oral or written,
for a definite or indefinite period between a manufacturer and a
distributor pursuant to which a distributor has the right to
purchase, resell, and distribute any brand or brands of beer
offered by a manufacturer.
(3) "Distributor" means those persons licensed under
Section 64.01 or 65.01 of this code.
(4) "Manufacturer" means those persons licensed under
Section 62.01 or 63.01 of this code.
(5) "Territory" or "sales territory" means the
geographic area of distribution and sale responsibility designated
by an agreement between a distributor and manufacturer, as provided
in Section 102.51 of this code, for any brands of the manufacturer.
(6) "Good cause" means the failure by any party to an
agreement, without reasonable excuse or justification, to comply
substantially with an essential, reasonable, and commercially
acceptable requirement imposed by the other party under the terms
of an agreement.
Added by Acts 1981, 67th Leg., p. 60, ch. 26, § 1, eff. April 8,
1981.
§ 102.72. PURPOSES. (a) This Act is promulgated
pursuant to authority of the state under the provisions of the 21st
amendment to the United States Constitution to promote the public's
interest in the fair, efficient, and competitive distribution of
beer within this state by requiring manufacturers and distributors
to conduct their business relations so as to assure:
(1) that the beer distributor is free to manage its
business enterprise, including the right to independently
establish its selling prices; and
(2) that the public, retailers, and manufacturers are
served by distributors who will devote their reasonable efforts and
resources to the sales and distribution of all the manufacturer's
products which the distributor has the right to sell and distribute
and maintain satisfactory sales levels in the sales territory
assigned the distributor.
(b) This Act shall govern all relations between
manufacturers and their distributors, including any renewals or
amendments to agreements between them, to the full extent
consistent with the constitutions and laws of this state and the
United States.
(c) The effect of this Act may not be varied by agreement.
Any agreement purporting to do so is void and unenforceable to the
extent of such variance only.
Added by Acts 1981, 67th Leg., p. 60, ch. 26, § 1, eff. April 8,
1981.
§ 102.73. TERMINATION AND NOTICE OF
CANCELLATION. (a) Except as provided in Subsection (c) of this
section, and except as may be specifically agreed upon at the time
by the parties, no manufacturer or beer distributor may cancel,
fail to renew, or otherwise terminate an agreement unless the
manufacturer or distributor furnishes prior notification in
accordance with Subsection (b) of this section to the affected
party.
(b) The notification required under Subsection (a) of this
section shall be in writing and must be received by the affected
party not less than 90 days before the date on which the agreement
will be cancelled, not renewed, or otherwise terminated. Such
notification shall contain a statement of intention to cancel,
failure to renew, or otherwise terminate an agreement, a statement
of reasons therefor, and the date on which such action shall take
effect.
(c) A manufacturer or distributor may cancel, fail to renew,
or otherwise terminate an agreement without furnishing any prior
notification for any of the following reasons:
(1) in the event of insolvency or bankruptcy or
dissolution or liquidation of the other party;
(2) in the event the other party shall make an
assignment for the benefit of creditors or similar disposition of
substantially all of the assets of such party's business;
(3) in the event of a conviction or plea of guilty or
no contest to a charge of violating a law or regulation or the
revocation or suspension of a license or permit for a period of 30
days or more relating to the business and which materially and
adversely affects the party's ability to continue in business; or
(4) in the event of the failure to pay amounts owing
the other when due, upon demand therefor, in accordance with agreed
payment terms.
Added by Acts 1981, 67th Leg., p. 60, ch. 26, § 1, eff. April 8,
1981.
§ 102.74. CANCELLATION. No manufacturer or beer
distributor may cancel, fail to renew, or otherwise terminate an
agreement unless the party intending such action has good cause for
such cancellation, failure to renew, or termination and, in any
case in which prior notification is required under Section 102.73
of this code, the party intending to act has furnished said prior
notification and the affected party has not eliminated the reasons
specified in such notification as the reasons for cancellation,
failure to renew, or termination within 90 days after the receipt of
such notification.
Added by Acts 1981, 67th Leg., p. 60, ch. 26, § 1, eff. April 8,
1981.
§ 102.75. PROHIBITED CONDUCT. No manufacturer shall:
(1) induce or coerce, or attempt to induce or coerce,
any distributor to engage in any illegal act or course of conduct;
(2) require a distributor to assent to any
unreasonable requirement, condition, understanding, or term of an
agreement prohibiting a distributor from selling the product of any
other manufacturer or manufacturers;
(3) fix or maintain the price at which a distributor
may resell beer;
(4) fail to provide to each distributor of its brands a
written contract which embodies the manufacturer's agreement with
its distributor;
(5) require any distributor to accept delivery of any
beer or any other item or commodity which shall not have been
ordered by the distributor.
Added by Acts 1981, 67th Leg., p. 60, ch. 26, § 1, eff. April 8,
1981.
§ 102.76. TRANSFER OF BUSINESS ASSETS OR STOCK. (a) No
manufacturer shall unreasonably withhold or delay its approval of
any assignment, sale, or transfer of the stock of a distributor or
all or any portion of a distributor's assets, distributor's voting
stock, the voting stock of any parent corporation, or the
beneficial ownership or control of any other entity owning or
controlling the distributor, including the distributor's rights
and obligations under the terms of an agreement whenever the person
or persons to be substituted meet reasonable standards imposed not
only upon the distributor but upon all other distributors of that
manufacturer of the same general class, taking into account the
size and location of the sales territory and market to be served.
Upon the death of one of the partners of a partnership operating the
business of a distributor, no manufacturer shall deny the surviving
partner or partners of such partnership the right to become a
successor-in-interest to the agreement between the manufacturer
and such partnership. Provided that the survivor has been active in
the management of the partnership and/or is otherwise capable of
carrying on the business of the partnership.
(b) Notwithstanding the provisions of Subsection (a) of
this section, upon the death of a distributor no manufacturer shall
deny approval for any transfer of ownership to a surviving spouse or
adult child of an owner of a distributor; provided, however, that
such subsequent transfers of such ownership by such surviving
spouse or adult child shall thereafter be subject to the provisions
of Subsection (a) of this section.
Added by Acts 1981, 67th Leg., p. 60, ch. 26, § 1, eff. April 8,
1981.
§ 102.77. REASONABLE COMPENSATION. (a) Any
manufacturer who, without good cause, cancels, terminates, or fails
to renew any agreement, or unlawfully denies approval of, or
unreasonably withholds consent, to any assignment, transfer, or
sale of a distributor's business assets or voting stock or other
equity securities, shall pay such distributor with whom it has an
agreement pursuant to Section 102.51 of this code the fair market
value of the distributor's business with relation to the affected
brand or brands. In determining fair market value, consideration
shall be given to all elements of value, including but not limited
to goodwill and going concern value.
(b) In the event that the manufacturer and the distributor
are unable to mutually agree on whether or not good cause exists for
cancellation under Section 102.74 of this code or on the reasonable
compensation to be paid for the value of the distributor's
business, as defined herein, the matter may, at the option of either
the distributor or manufacturer, be submitted to three arbitrators,
one of whom shall be named in writing by each party and the third of
whom shall be chosen by the two arbiters so selected. Should the
arbiters selected fail to choose a third arbiter within 10 days, a
judge of a district court in the county in which the distributor's
principal place of business is located shall select the third
arbiter. Arbitration shall be conducted in accordance with the
Texas General Arbitration Act, as amended (Article 224, Revised
Civil Statutes of Texas, 1925). Arbitration costs shall be paid
one-half by the distributor and one-half by the manufacturer. The
award of the arbitrators shall be binding on the parties unless
appealed within 10 days from the date of the award. All proceedings
on appeal shall be in accordance with and governed by the Texas
General Arbitration Act, as amended (Article 224, Revised Civil
Statutes of Texas, 1925).
Added by Acts 1981, 67th Leg., p. 60, ch. 26, § 1, eff. April 8,
1981.
§ 102.78. RIGHT OF FREE ASSOCIATION. No manufacturer or
distributor shall restrict or inhibit, directly or indirectly, the
right of free association among manufacturers or distributors for
any lawful purpose.
Added by Acts 1981, 67th Leg., p. 60, ch. 26, § 1, eff. April 8,
1981.
§ 102.79. JUDICIAL REMEDIES. (a) If a manufacturer or
distributor who is a party to an agreement pursuant to Section
102.51 of this code fails to comply with this Act or otherwise
engages in conduct prohibited under this Act, or if a manufacturer
and distributor are not able to mutually agree on reasonable
compensation under Section 102.77 of this code and the matter is not
to be submitted to arbitration, the aggrieved manufacturer or
distributor may maintain a civil action in a court of competent
jurisdiction in the county in which the distributor's principal
place of business is located.
(b) In any action under Subsection (a) of this section, the
court may grant such relief as the court determines is necessary or
appropriate considering the purposes of this Act.
(c) The prevailing party in any action under Subsection (a)
of this section shall be entitled to actual damages, including the
value of the distributor's business, as specified in Section 102.77
of this code, reasonable attorney's fees, and court costs.
Added by Acts 1981, 67th Leg., p. 60, ch. 26, § 1, eff. April 8,
1981.
§ 102.80. COVERAGE AND EFFECTIVE DATE. This Act shall
cover agreements in existence on the date of enactment of this Act
and also shall apply to agreements entered into and any
cancellation, termination, failure to renew, amendment, or
material modification of any agreement occurring after the date of
enactment of this Act.
Added by Acts 1981, 67th Leg., p. 60, ch. 26, § 1, eff. April 8,
1981.
§ 102.81. ALE AND MALT LIQUOR. This subchapter and
Subchapter C of this chapter apply to agreements concerning ale and
malt liquor in the same manner as they apply to agreements
concerning beer, and each particular class of permittee dealing
with ale and malt liquor is subject to those provisions that apply
to functionally corresponding licensees within the beer industry.
Added by Acts 1987, 70th Leg., ch. 303, § 4, eff. June 11, 1987.
