Frequently Asked Questions

 

These are ABC's most frequently asked questions about:
WHOLESALER-RETAILER RELATIONS

Q. 108. Is a wholesaler or manufacturer permitted to have any interest in an on-sale license?

A. A wholesaler, manufacturer, wine grower, rectifier or importer may hold a small amount of stock in a corporate retail licensee, or serve on the board of directors of a corporate off-sale licensee, provided the stock ownership or service on the board of directors, as determined by ABC, does not result in the exercise of control over the retail licensee's business. Also, it must not result in the exclusion of any competitor's brand of alcoholic beverages, and further, the stock is listed on the New York Stock Exchange, the American Stock Exchange, or NASDAQ. ABC must be notified of the stock ownership or service on the board of directors. (Section 25503.11)

Q. 109. Are the restrictions placed upon wholesaler-retailer relations commonly referred to as Tied-House restrictions?

A. Yes.

Q. 110. Is it permissible for any type of retail licensee to have any ownership interest in the business, property or license of a wholesaler or manufacturer?

A. A retail licensee may hold a small amount of stock in a corporate licensed manufacturer, wine grower, rectifier, importer, or wholesaler, provided the purpose of the stock ownership by the retail licensee does not violate any of the provisions of ABC regulations as determined by ABC. The stock must be listed on the New York Stock Exchange, the American Stock Exchange, or on NASDAQ. ABC must be notified of the stock ownership.

Q. 111. May a retail licensee rent space to a wholesaler for the placing or painting of signs or window displays on or in retailer's premises?

A. No. It is a misdemeanor for a retail licensee to accept any money or anything of value for the privilege of placing or painting a sign or advertisement or window display on or in the licensed premises. (Sections 25503 and 25503.1)

Q. 112. May a retailer accept any payment from a wholesaler for setting up an advertising display or performing a distribution service in connection with distilled spirits?

A. No. (Section 25503)

Q. 113. What is consignment sale?

A. It is a sale or delivery of alcoholic beverages under an agreement whereby title to the alcoholic beverages is retained by the seller or whereby the licensee receiving the alcoholic beverages has the right at any time before the sale to return them to the original seller. (Section 25503)

Q. 114. Are consignment sales lawful under the Act?

A. No. A retail licensee may not accept or solicit delivery of alcoholic beverages on such a basis. (Section 25503)

Q. 115. Is it lawful for a retail licensee to accept advertising specialties from wholesalers or manufacturers?

A. Yes, a retailer may accept wine and distilled spirits advertising specialties subject to monetary limitations set forth in Section 25600 and Rule 106. Advertising specialties related to beer or other malt beverages are considered supply items and may not generally be furnished free to retailers. (Section 25501)

Q. 116. When may a manufacturer or wholesaler make deliveries of alcoholic beverages to retail licensees?

A. Manufacturers or wholesalers may only deliver alcoholic beverages to a retail licensee's premises between 3 a.m. and 8 p.m. Monday through Saturday. No deliveries may be made on Sundays.

Any alcoholic beverage may be picked up by the retailer at the distributor's platform at any time. (Section 25633)

Q. 117. May retailers who hold the same type license agree to group purchase distilled spirits and wine (pool buying) from a wholesaler or rectifier?

A. Yes. (Section 24400)