CHAPTER 102. INTRA-INDUSTRY RELATIONSHIPS
ALCOHOLIC BEVERAGE CODE
TITLE 4. REGULATORY AND PENAL PROVISIONS
CHAPTER 102. INTRA-INDUSTRY RELATIONSHIPS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 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, Sec. 1, eff. Sept. 1,
1977.
Sec. 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, Sec. 64, eff. Sept. 1,
1993.
Sec. 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, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1979, 66th Leg., p. 2118, ch. 819, Sec. 9,
eff. June 13, 1979; Acts 1983, 68th Leg., p. 1352, ch. 278, Sec.
52, eff. Sept. 1, 1983.
Sec. 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, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1977, 65th Leg., p. 1183, ch. 453, Sec. 9,
eff. Sept. 1, 1977; Acts 1979, 66th Leg., p. 2118, ch. 819, Sec.
10, eff. June 13, 1979; Acts 1983, 68th Leg., p. 1352, ch. 278,
Sec. 53, eff. Sept. 1, 1983.
Sec. 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, Sec. 1, eff. Sept. 1,
1977.
Sec. 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, Sec. 1, eff. Sept. 1,
1977.
Sec. 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) may offer prizes,
premiums, or gifts to a consumer. 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) may conduct a
sweepstakes promotion. 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. Notwithstanding any other provision, a permittee may:
(1) preannounce a promotion to a consumer; or
(2) preannounce the purchase of wine or distilled spirits to a
consumer.
Acts 1977, 65th Leg., p. 500, ch. 194, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1979, 66th Leg., p. 2118, ch. 819, Sec. 11,
eff. June 13, 1979; Acts 1989, 71st Leg., ch. 859, Sec. 1, eff.
June 14, 1989; Acts 1993, 73rd Leg., ch. 934, Sec. 65, eff. Sept.
1, 1993; Acts 1999, 76th Leg., ch. 424, Sec. 1, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
236, Sec. 1, eff. September 1, 2005.
Acts 2007, 80th Leg., R.S., Ch.
1022, Sec. 1, eff. September 1, 2007.
Sec. 102.071. SALE OF GLASSWARE AND NONALCOHOLIC BEVERAGES. (a)
In this section:
(1) "Branded glassware" means glassware that contains the name,
emblem, or logo of or any reference to a brand of alcoholic
beverage.
(2) "Unbranded glassware" means glassware that does not contain
the name, emblem, or logo of or any reference to a brand of
alcoholic beverage.
(b) Notwithstanding Sections 102.04 and 102.07 or any other
provision of this code, the holder of a wholesaler's permit who
is primarily engaged in the wholesale sale of distilled spirits
and wine may sell branded or unbranded glassware to retailers,
provided that the glassware is not marketed or sold in a manner:
(1) to influence a retailer to purchase any quantity of
alcoholic beverages;
(2) to affect the terms by which a retailer may purchase
alcoholic beverages; or
(3) that threatens the independence of a retailer.
(c) Section 102.32 applies to payment for unbranded glassware or
glassware bearing the name, emblem, or logo of a brand of
distilled spirits or wine by the holder of a wholesaler's permit
under Subsection (b).
(d) Sections 61.73 and 102.31 apply to payment for glassware
bearing the name, emblem, or logo of a brand of malt beverage by
the holder of a wholesaler's permit or a distributor's license.
(e) For the purposes of Subchapters C and D, the sale, by the
holder of a distributor's license, of a nonalcoholic beverage
produced or sold by a manufacturer of malt beverages and that
bears the name, emblem, logo, or brand of a manufacturer of malt
beverages is the same as a sale of beer.
Added by Acts 2009, 81st Leg., R.S., Ch.
196, Sec. 1, eff. September 1, 2009.
Sec. 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, Sec. 1, eff. Sept. 1,
1977.
Sec. 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, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1983, 68th Leg., p. 1353, ch. 278, Sec. 54,
eff. Sept. 1, 1983.
Sec. 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, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1983, 68th Leg., p. 1353, ch. 278, Sec. 55,
eff. Sept. 1, 1983.
Sec. 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, Sec. 1, eff. Sept. 1,
1977.
Sec. 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, Sec. 1, eff. Sept. 1,
1977.
Sec. 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, Sec. 1, eff. Sept. 1,
1977.
Sec. 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, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1981, 67th Leg., p. 2664, ch. 719, Sec. 1,
eff. June 16, 1981.
Sec. 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, Sec. 1, eff. Sept. 1,
1977.
Sec. 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, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1983, 68th Leg., p. 1353, ch. 278, Sec. 56,
eff. Sept. 1, 1983.
Sec. 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, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1983, 68th Leg., p. 1354, ch. 278, Sec. 57,
eff. Sept. 1, 1983.
Sec. 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, Sec. 24, eff.
Aug. 27, 1979.
Sec. 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, Sec. 1, eff. Aug. 30,
1993.
Sec. 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, Sec. 66, eff. Sept. 1,
1993. Renumbered from Alcoholic Beverage Code Sec. 102.19 by Acts
1995, 74th Leg., ch. 76, Sec. 17.01(1), eff. Sept. 1, 1995.
Sec. 102.21. CONTINUITY OF CERTAIN PROTECTIONS FOR BEER
DISTRIBUTORS. The protections provided to beer distributors by
Subchapters C and D apply regardless of whether there is a
transfer or change of ownership of a brand at the manufacturing
level.
Added by Acts 2009, 81st Leg., R.S., Ch.
894, Sec. 1, eff. September 1, 2009.
SUBCHAPTER B. REGULATION OF CREDIT TRANSACTIONS
Sec. 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, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1979, 66th Leg., p. 55, ch. 33, Sec. 8,
eff. Aug. 27, 1979.
Sec. 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, including by
electronic mail or facsimile transmission, to the commission or
administrator. A wholesale dealer may not 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).
(d-1) The commission or administrator may not accept the
voluntary cancellation or suspension of a permit or allow a
permit to be renewed or transferred if the permit holder is
delinquent in the payment of an account for liquor under this
section. A person whose permit is canceled by the commission or
whose permit has expired is not eligible to hold any other permit
or license under this code until the person has cured any
delinquency of the person under 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, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1979, 66th Leg., p. 2119, ch. 819, Sec. 12,
eff. June 13, 1979.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
68, Sec. 22, eff. September 1, 2007.
Acts 2009, 81st Leg., R.S., Ch.
78, Sec. 1, eff. May 20, 2009.
SUBCHAPTER C. TERRITORIAL LIMITS ON SALE OF BEER
Sec. 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, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1983, 68th Leg., p. 5229, ch. 959, Sec. 1,
eff. Aug. 29, 1983; Acts 1995, 74th Leg., ch. 152, Sec. 1, eff.
May 19, 1995.
Sec. 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, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1979, 66th Leg., p. 55, ch. 33, Sec. 9,
eff. Aug. 27, 1979; Acts 1993, 73rd Leg., ch. 934, Sec. 67, eff.
Sept. 1, 1993.
Sec. 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, Sec. 1, eff. Sept. 1,
1977. Amended by Acts 1979, 66th Leg., p. 55, ch. 33, Sec. 10,
eff. Aug. 27, 1979.
Sec. 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, Sec. 2, eff. May 19,
1995.
Sec. 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, Sec. 2, eff. May 19,
1995.
Sec. 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, Sec. 1, eff. Sept. 1,
1997.
SUBCHAPTER D. BEER INDUSTRY FAIR DEALING LAW
Sec. 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, Sec. 1, eff. April
8, 1981.
Sec. 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, Sec. 1, eff. April
8, 1981.
Sec. 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, Sec. 1, eff. April
8, 1981.
Sec. 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, Sec. 1, eff. April
8, 1981.
Sec. 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, Sec. 1, eff. April
8, 1981.
Sec. 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, Sec. 1, eff. April
8, 1981.
Sec. 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, Sec. 1, eff. April
8, 1981.
Sec. 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, Sec. 1, eff. April
8, 1981.
Sec. 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, Sec. 1, eff. April
8, 1981.
Sec. 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, Sec. 1, eff. April
8, 1981.
Sec. 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, Sec. 4, eff. June 11,
1987.
Sec. 102.82. STATUTE OF LIMITATIONS. A person must bring suit
on an action arising under this chapter not later than four years
after the day the cause of action accrues. If a termination
related to a change in ownership of the brand occurs, the cause
of action accrues when either the new brand owner or the
transferring or selling brand owner provides notice of
termination to the distributor.
Added by Acts 2009, 81st Leg., R.S., Ch.
894, Sec. 3, eff. September 1, 2009.