Section R19-1-321. Practices Permitted by a Wholesaler

A.      In addition to practices specifically authorized under A.R.S. Title 4 and 27 CFR, Chapter 1, Subchapter A, the following practices allow a wholesaler to furnish something of value to a licensed retailer or other specified licensee as long as the wholesaler does not furnish something of value to induce the licensed retailer or other specified licensee to purchase spiritu- ous liquor from the wholesaler to the exclusion, in whole or in part, of another wholesaler. A wholesaler shall not furnish something of value to a licensed retailer or other specified licensee unless specifically authorized under A.R.S. Title 4, 27 CFR, Chapter 1, Subchapter A, or this Chapter. If there is a conflict between the practices authorized in 27 CFR, Chapter 1, Subsection A and this Chapter, this Chapter governs.

B.       A licensed retailer shall not solicit or knowingly accept from a wholesaler any activity not outlined in subsections (C) through

(N) unless the activity is specifically authorized under A.R.S. Title 4 or this Chapter.

C.      Providing stocking services. A wholesaler may stock any spir- ituous liquor or other product that the wholesaler sells to a licensed retailer. The stocking service provided by a whole- saler:

1.        Shall not alter or disturb any spirituous liquor or other product of another wholesaler;

2.        Shall be performed at a point-of-sale area, including a cold box, from which a consumer may purchase spiritu- ous liquor sold by the retailer. A wholesaler may move spirituous liquor to or from the following locations on the licensed premises:

a.         A designated delivery entrance, and

b.        A storage area; and

3.        May include:

a.         Rotating, cleaning, or otherwise preparing the spiri- tuous liquor or other product for sale at a point-of- sale area; and

b.        Furnishing advertising materials displayed at a point-of-sale area as authorized under R19-1-313.

D.      Providing resetting services. A wholesaler may reset spiritu- ous liquor sold to a licensed retailer if requested by the licensed retailer and the resetting does not alter or disturb the product of another wholesaler. The resetting services provided by a wholesaler:

1.        Shall be performed only in a point-of-sale area, including a cold box;

2.        Shall not be performed unless the retailer provides at least two working days’ notice to any other wholesaler whose product needs to be affected so the resetting can be per- formed; and

3.        Shall not be performed more frequently than once per year if the resetting involves a substantial reconfiguration of the spirituous liquor department of a retailer.

E.       Furnishing tapping equipment. A wholesaler may furnish tap- ping equipment under R19-1-326 to a retail licensee.

F.       Making a driver sale. A wholesaler may sell to a licensed retailer, through a driver sale, at the current market price, spir- ituous liquor not previously ordered.

G.      Delivering a specially discounted quantity purchase. A whole- saler may provide a licensed retailer with a specially dis- counted price for a quantity purchase if the wholesaler delivers the entire quantity purchased to an approved storage facility of the licensed retailer.

H.      Accepting returned spirituous liquor products.

1.        A wholesaler may allow a licensed retailer that intends to be closed for at least 30 days to exchange beer or other malt beverage products purchased from the wholesaler or to receive a credit for or refund of the amount paid for the malt beverage products;

2.        With permission from the Director, a wholesaler may allow a licensed retailer that is discontinuing sale of a particular beer or other malt beverage product to exchange the product purchased from the wholesaler or to receive a credit for or refund of the amount paid for the beer or other malt beverage product; and

3.        A wholesaler may exchange or accept return of other spirituous liquors as permitted under 27 U.S.C. 205(d) and 27 C.F.R. Subchapter A, Part 11.

I.        Selling tobacco products or foodstuffs. A wholesaler may sell tobacco products or foodstuffs to a licensed retailer if the price paid by the retailer equals or exceeds the cost to the whole- saler.

J.        Furnishing promotional items. A wholesaler may provide pro- motional items to an on-sale retailer. Promotional items, as defined and limited by A.R.S. § 4-243(D) does not include spirituous liquor.

K.      Facilitating a special event. A wholesaler may facilitate a spe- cial event by:

1.        Donating spirituous liquor directly to the special event licensee and issuing a net zero cost billing invoice in the name of the special event licensee,

2.        Leaving a delivery vehicle and other equipment neces- sary for the sale or service of spirituous liquor on the premises of the special event for the duration of the spe- cial event and up to one business day before and after the special event,

3.        Leaving spirituous liquor at the special event if:

a.         The spirituous liquor is properly described on a pre- liminary billing invoice issued in the names of both the off-sale retailer from which the special event licensee is purchasing the spirituous liquor and the special event licensee,

b.        The wholesaler issues a final billing invoice in the names of both the off-sale retailer from which the special event licensee is purchasing the spirituous liquor and the special event licensee within five business days after the special event ends, and

c.         The spirituous liquor is stored securely to ensure only intended persons gain access to the spirituous liquor; and

4.        Selling spirituous liquor directly to the special event licensee at the same price the wholesaler sells the spiritu-

ous liquor to on-sale retailers. If the wholesaler sells spir- ituous liquor directly to the special event licensee, both the preliminary and final billing invoices shall be in the name of the special event licensee.

L.       Providing shelves, bins, or racks. A wholesaler may lend a shelf, bin, or rack to a licensed off-sale retailer if the following conditions are met:

1.        The shelf, bin, or rack lent to the licensed off-sale retailer is located in a point-of-sale area.

2.        The shelf, bin, or rack lent to the licensed off-sale retailer does not have an actual cost of more than $300 per brand, as defined at 27 C.F.R. Subchapter A, Section 6.11, at any one time in the licensed premises. The cost of the shelf, bin, or rack excludes the cost of transporting and install- ing the shelf, bin, or rack. The wholesaler shall not pool or combine dollar limitations to provide the licensed off- sale retailer with a shelf, bin, or rack that exceeds the dol- lar limitation in this subsection;

3.        The shelf, bin, or rack bears advertising regarding spiritu- ous liquor available from the wholesaler that is conspicu- ous, substantial, and permanently inscribed or securely affixed. The name and address of the licensed off-sale retailer may appear on the shelf, bin, or rack;

4.        The primary function of the shelf, bin, or rack is to hold and display spirituous liquor available from the whole- saler;

5.        The spirituous liquor on the shelf, bin, or rack is only the spirituous liquor advertised on the shelf, bin, or rack by the wholesaler. The shelf, bin, or rack may also hold non- spirituous-liquor products that are being promoted or advertised with the spirituous liquor available from the wholesaler; and

6.        The shelf, bin, or rack is not temperature controlled.

M.     Providing product display enhancers. A wholesaler may lend to a licensed off-sale retailer a non-functional copy or repro- duction of an item that enhances the display of spirituous liquor sold from the display.

N.      Providing staff assistance. A wholesaler may use its staff to provide a licensed retailer with assistance in performing the activities outlined in this Section. A wholesaler shall not main- tain full-time staff or permanently occupy office space on the licensed premises or at the corporate office of a licensed retailer.

O.      This Section is authorized by A.R.S. §§ 4-203.02(H) through

(J) and 4-243.

Historical Note

New Section made by final rulemaking at 20 A.A.R.

1207, effective July 6, 2014 (Supp. 14-2).