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. Chapter 102.51, Subchapter C, Chapter 102,
1-4 Alcoholic Beverage Code, is amended to read as follows:
1-5 Sec. 102.51. Setting of Territorial Limits. (a) Each
1-6 holder of a manufacturer's or nonresident manufacturer's license
1-7 shall designate territorial limits in this state within which the
1-8 brands of beer the licensee manufactures may be sold by general,
1-9 local, or branch distributor's licensees.
1-10 (b) Each holder of a general, local, or branch distributor's
1-11 license shall enter into a written agreement with each manufacturer
1-12 from which the distributor purchases beer for distribution and sale
1-13 in this state setting forth the sales territory within which each
1-14 brand of beer purchased by that distributor may be distributed and
1-15 sold. No holder of a general, local, or branch distributor's
1-16 license shall make any sales of any brand of beer outside the sales
1-17 territory specified in the written agreement. No such agreement
1-18 shall interfere with the rights of retailers to purchase beer as
1-19 provided in Section 102.53. A manufacturer shall <may agree to>
1-20 not assign all or any part of the same sales territory to more than
1-21 one distributor. A copy of the agreement and any amendments to it
1-22 shall be filed with the administrator.
1-23 SECTION 2. Subchapter C, Chapter 102, Alcoholic Beverage
2-1 Code, is amended by adding Section 102.54 to read as follows:
2-2 Sec. 102.54. ADDITIONAL REQUIREMENTS FOR APPLICANTS FOR OR
2-3 HOLDERS OF DISTRIBUTOR'S LICENSES. (a) In addition to any other
2-4 requirements necessary for the issuance of an original or renewal
2-5 distributor's license, the commission or administrator shall
2-6 require the applicant for or the holder of the license to show that
2-7 the applicant or holder:
2-8 (1) has entered into or will acquire a written
2-9 agreement setting forth an assigned territory from a manufacturer
2-10 in accordance with this subchapter and Subchapter D of this
2-11 chapter;
2-12 (2) has received or has applied for and will maintain
2-13 all licenses or permits required to authorize engaging in business
2-14 in the assigned territory as a beer distributor, including any
2-15 required state or federal licenses or permits;
2-16 (3) has ordered, received, and stored or has committed
2-17 to order, receive, and store a sufficient amount of beer that the
2-18 distributor is authorized to sell to ensure that the distributor
2-19 can supply the reasonable needs of all retailers in the assigned
2-20 territory;
2-21 (4) has received and stored or has committed to
2-22 receive and store beer received from a manufacturer in a manner
2-23 complying with the product quality control standards established by
2-24 the manufacturer or the commission; and
2-25 (5) has or will have the ability to sell, deliver, and
3-1 promote each brand of beer sold by the distributor to all retailers
3-2 in the assigned territory:
3-3 (A) in a manner that complies with the product
3-4 quality control standards of the manufacturer or of the commission;
3-5 and
3-6 (B) on a continuing and recurring basis, in
3-7 response to the reasonable market demand for a brand or brands of
3-8 beer by retailers or retailer's customers in the assigned
3-9 territory.
3-10 (b) In determining whether an applicant for or holder of a
3-11 distributor's license meets the requirement of Subsection (a)(5),
3-12 the applicant or holder must show that the applicant or holder has
3-13 or will acquire:
3-14 (1) storage facilities of a sufficient size to store
3-15 each brand of beer in an amount necessary to meet the demand for
3-16 the product from all retailers in the holder's or applicant's
3-17 assigned territory;
3-18 (2) an inventory or a commitment to acquire an
3-19 inventory of each brand of beer in an amount equal to the demand
3-20 for the brand from all retailers in the holder's or applicant's
3-21 assigned territory;
3-22 (3) a sufficient number of employees to provide the
3-23 holder or applicant with the ability:
3-24 (A) to sell, deliver on a reasonably prompt
3-25 basis, and to promote the sale of each brand of beer to all
4-1 retailers in the holder's or applicant's assigned territory; and
4-2 (B) to prepare and submit in a timely manner any
4-3 fee or tax payments or reports required by any properly authorized
4-4 governmental regulatory authority including the United States
4-5 Treasury Bureau of Alcohol, Tobacco, and Firearms and the
4-6 commission; and
4-7 (4) a sufficient number of delivery vehicles and
4-8 rolling stock to provide the holder or the applicant with the
4-9 capability of transporting, selling, delivering, or promoting each
4-10 brand of beer to all retailers in the assigned territory.
4-11 (c) The commission or administrator shall refuse to approve
4-12 an application for a distributor's license or shall refuse to
4-13 renew, or may after notice and hearing suspend or cancel a
4-14 distributor's license if the commission or administrator finds the
4-15 holder or applicant has failed to comply with or maintain any of
4-16 the requirements of Subsections (a) or (b) of this section.
4-17 (d) In this section:
4-18 (1) "Manufacturer" means a holder of a license issued
4-19 under Chapters 62 or 63 of this code.
4-20 (2) "Retailer" means the holder of a permit or license
4-21 issued under Chapters 25 through 34, 48, 69 through 72, and 74 of
4-22 this code.
4-23 (3) "Distributor" means the holder of a license issued
4-24 under chapters 64 or 65 of this code.
4-25 SECTION 3. Subchapter C, Chapter 102, Alcoholic Beverage
5-1 Code, is amended by adding Section 102.55 to read as follows:
5-2 Sec. 102.55. TERRITORIAL ASSIGNMENTS; "BRAND" DEFINED. For
5-3 purposes of this subchapter and Subchapter D of this chapter and as
5-4 it relates to agreements between manufacturers and distributors
5-5 setting forth the sales territory in which a distributor may sell
5-6 beer of the manufacturer, the term "brand" shall mean all beer
5-7 produced and marketed by the manufacturer under the same brand name
5-8 or brand logo. Different categories or extensions of products
5-9 manufactured and marketed under a common identifying brand name or
5-10 brand logo are considered to be the same brand, and shall be
5-11 assigned by the manufacturer to the distributor to whom the brand
5-12 was originally assigned, provided that the distributor elects to
5-13 distribute and sell the brand. Differences in packaging, such as
5-14 different style, type or size of container, or changes in the
5-15 manufacturer's advertising strategy or labelling do not establish
5-16 different brands.
5-17 SECTION 4. As to existing agreements between manufacturers
5-18 and distributors setting forth the territory within which specific
5-19 brands of beer may be sold:
5-20 (a) Those territorial agreements in effect on January 15,
5-21 1995 in which the manufacturer has not assigned all or any part of
5-22 the same sales territory to more than one distributor, shall be
5-23 deemed as a matter of law to be enforceable agreements requiring
5-24 the manufacturer to not assign all or any part of the same sales
5-25 territory to more than one distributor.
6-1 (b) Those territorial agreements in effect on January 15,
6-2 1995 in which the manufacturer has previously assigned all or part
6-3 of the same sales territory to more than one distributor, are not
6-4 affected by the amendment to Section 102.51, Alcoholic Beverage
6-5 Code, enacted by Section 1 of this Act.
6-6 SECTION 5. The importance of this legislation and the
6-7 crowded condition of the calendars in both houses create an
6-8 emergency and an imperative public necessity that the
6-9 constitutional rule requiring bills to be read on three several
6-10 days in each house be suspended, and this rule is hereby suspended
6-11 and that this act take effect and be in force from and after its
6-12 passage, and it is so enacted.