By: Armbrister S.B. No. 1236
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the sale of beer within assigned territories.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Subsection (b), Section 102.51, Alcoholic
1-4 Beverage Code, is amended to read as follows:
1-5 (b) Each holder of a general, local, or branch distributor's
1-6 license shall enter into a written agreement with each manufacturer
1-7 from which the distributor purchases beer for distribution and sale
1-8 in this state setting forth the sales territory within which each
1-9 brand of beer purchased by that distributor may be distributed and
1-10 sold. No holder of a general, local, or branch distributor's
1-11 license shall make any sales of any brand of beer outside the sales
1-12 territory specified in the written agreement. No such agreement
1-13 shall interfere with the rights of retailers to purchase beer as
1-14 provided in Section 102.53. A manufacturer may <agree to> not
1-15 assign all or any part of the same sales territory to more than one
1-16 distributor. A copy of the agreement and any amendments to it
1-17 shall be filed with the administrator.
1-18 SECTION 2. Subchapter C, Chapter 102, Alcoholic Beverage
1-19 Code, is amended by adding Sections 102.54 and 102.55 to read as
1-20 follows:
1-21 Sec. 102.54. ADDITIONAL REQUIREMENTS FOR APPLICANTS FOR
1-22 DISTRIBUTOR'S LICENSE. (a) In addition to any other requirements
1-23 necessary for issuance or renewal of a distributor's license, the
2-1 commission or administrator shall require an applicant for a
2-2 license or a holder of a license to show that the applicant or
2-3 holder:
2-4 (1) has entered into or will acquire a written
2-5 agreement designating an assigned territory from a manufacturer in
2-6 accordance with this subchapter and Subchapter D;
2-7 (2) has received or has applied for and will maintain
2-8 all licenses or permits required to engage in business in the
2-9 assigned territory as a holder of a distributor's license,
2-10 including any state or federal licenses or permits;
2-11 (3) has ordered, received, and stored or has committed
2-12 to order, receive, and store a sufficient amount of beer that the
2-13 distributor is authorized to sell to ensure that the distributor
2-14 can supply the reasonable needs of all retailers in the assigned
2-15 territory;
2-16 (4) has received and stored or has committed to
2-17 receive and store beer received from a manufacturer in a manner
2-18 complying with a product quality control standard established by
2-19 the manufacturer or the commission; and
2-20 (5) has or will have the ability to sell, deliver, and
2-21 promote each brand of beer sold by the distributor to all retailers
2-22 in the assigned territory:
2-23 (A) in a manner that complies with the product
2-24 quality control standards of the manufacturer or of the commission;
2-25 and
3-1 (B) on a continuing and recurring basis in
3-2 response to reasonable market demand for a brand of beer by the
3-3 retailer or the retailer's customers in the assigned territory.
3-4 (b) In determining whether an applicant for or holder of a
3-5 distributor's license meets the requirement of Subsection (a)(5),
3-6 the commission or administrator may require the applicant or holder
3-7 to show that the applicant or holder has or will have:
3-8 (1) storage facilities of a sufficient size to store
3-9 each brand of beer in an amount equal to the demand for the product
3-10 from all retailers in the holder's or applicant's assigned
3-11 territory;
3-12 (2) an inventory or a commitment to acquire an
3-13 inventory of each brand of beer in an amount equal to the demand
3-14 for the brand from all retailers in the holder's or applicant's
3-15 assigned territory;
3-16 (3) a sufficient number of employees to provide the
3-17 holder or applicant with the ability:
3-18 (A) to sell, deliver on a reasonably prompt
3-19 basis, and promote each brand of beer to all retailers in the
3-20 holder's or applicant's assigned territory; and
3-21 (B) to prepare and submit in a timely manner any
3-22 fee or tax payments or reports required by any authorized
3-23 governmental regulatory authority, including the Bureau of Alcohol,
3-24 Tobacco, and Firearms and the commission; and
3-25 (4) a sufficient number of delivery vehicles and
4-1 rolling stock to provide the holder or the applicant with the
4-2 capability of transporting, selling, delivering, or promoting each
4-3 brand of beer to all retailers in the assigned territory.
4-4 (c) The commission or administrator shall refuse to approve
4-5 an application for a distributor's license or shall refuse to renew
4-6 a distributor's license if the commission or administrator finds
4-7 the holder or applicant has failed to comply with any of the
4-8 requirements of Subsection (a) or (b).
4-9 (d) In this section:
4-10 (1) "Distributor" means a person who holds a license
4-11 issued under Chapter 64 or 65.
4-12 (2) "Manufacturer" means a person who holds a license
4-13 issued under Chapter 62 or 63.
4-14 (3) "Retailer" means a person who holds a permit or
4-15 license issued under Chapter 25 through 34, 48, 69 through 72, or
4-16 74.
4-17 Sec. 102.55. TERRITORIAL ASSIGNMENTS; DEFINITIONS. (a) In
4-18 this subchapter and Subchapter D, and as the terms relate to an
4-19 agreement between a manufacturer and a distributor describing the
4-20 sales territory in which a distributor may sell the beer of a
4-21 manufacturer:
4-22 (1) "Brand" means any word, name, group of letters,
4-23 symbol, or trademark or a combination of any word, name, group of
4-24 letters, symbol, or trademark that is adopted and used by a
4-25 manufacturer on a label or on packaging to identify a specific beer
5-1 or malt beverage and to distinguish the beer or malt beverage
5-2 product from the label or packaging of another beer or malt
5-3 beverage produced or marketed by any manufacturer. The term does
5-4 not include the name of the manufacturer unless the name of the
5-5 manufacturer is included in the name of the brand.
5-6 (2) "Brand extension" means a brand that incorporates
5-7 a brand name or brand logo, or a substantial part of an existing
5-8 brand name or brand logo, of the same manufacturer.
5-9 (b) A brand extension is not a new or different brand.
5-10 (c) A manufacturer shall assign a brand extension to the
5-11 distributor to whom the brand was originally assigned, if the
5-12 distributor elects to distribute and sell the brand extension.
5-13 SECTION 3. (a) A territorial agreement in effect on March
5-14 22, 1995, between a manufacturer and a distributor in which a
5-15 manufacturer has not assigned all or part of a territory to more
5-16 than one distributor is considered to be an enforceable agreement
5-17 requiring a manufacturer to not assign any part of the assigned
5-18 territory to more than one distributor.
5-19 (b) A territorial agreement in effect on March 22, 1995, in
5-20 which a manufacturer has previously assigned all or part of the
5-21 same sales territory to more than one distributor is not affected
5-22 by the amendment to Section 102.51, Alcoholic Beverage Code,
5-23 enacted by Section 1 of this Act. A territorial agreement in
5-24 effect on March 22, 1995, in which a manufacturer has previously
5-25 assigned all or part of the same sales territory to more than one
6-1 distributor is governed by Section 102.51, Alcoholic Beverage Code,
6-2 as it existed immediately before the effective date of this Act,
6-3 and the former law is continued in effect for that purpose.
6-4 SECTION 4. The importance of this legislation and the
6-5 crowded condition of the calendars in both houses create an
6-6 emergency and an imperative public necessity that the
6-7 constitutional rule requiring bills to be read on three several
6-8 days in each house be suspended, and this rule is hereby suspended,
6-9 and that this Act take effect and be in force from and after its
6-10 passage, and it is so enacted.