Current through Register Vol. 56, No. 24, December 18, 2024
(a) The
purpose of this subchapter is to promote competition while preserving an
orderly marketplace, including, but not limited to, the prevention of
destructive price wars, and to promote practices that foster moderation and
responsibility in the use and consumption of alcoholic beverages.
(b) For purposes of this subchapter:
1. A discount is an inducement or allowance
to purchase a product which is reflected on the wholesaler's invoice at the
time the sale of the subject alcoholic beverages to a retailer is completed. A
discount is reflected in the cost of the product on which it is given, as it
relates to the retailer's sale price for purposes of
N.J.A.C.
13:2-24.8. Discounts may include quantity
discounts;
2. A rebate is an
inducement or allowance to purchase a product which is not reflected on the
wholesaler's invoice at the time the sale of the subject alcoholic beverages to
a retailer is completed, but which is payable no less than 30 days and no more
than 90 days after the payment for the product on which it is given. A rebate
is not reflected in the cost of the product on which it is given, as it relates
to the retailer's sale price for purposes of N.J.A.C. 13:2-24.8; and
3. A retail incentive program (RIP) is a form
of rebate in which a wholesaler provides a financial incentive to a retailer to
purchase a specific quantity of alcoholic beverages in one purchase transaction
and places no other obligation on the retailer. A purchase transaction is a
single order and a single delivery of a specific quantity of a specific
alcoholic beverage or combination of beverages, as reflected on a single
wholesaler's invoice. More specific requirements for this type of rebate are
set forth in (e) below.
(c) Except as may otherwise be authorized by
this subchapter, no manufacturer, supplier, importer, brand registrant,
wholesaler, or distributor privileged to engage in the commerce of any
alcoholic beverage into or within this State shall, directly or indirectly, be
a party to, or assist in, any transaction or sale, or contract to sell:
1. Which discriminates against purchasers, in
that:
i. There is a different price or are
different credit terms for different purchasers of alcoholic beverages of the
same brand or trade name of like age, quality and quantity (including, but not
limited, to proof and size); or
ii.
It is a discount, rebate, allowance or advertising service granted to a
purchaser over and above any discount, rebate, allowance, or advertising
service available at the time of such transaction to competitors with respect
to a sale of alcoholic beverages of the same brand or trade name of like age,
quality and quantity. However, a wholesaler may exclude retail cooperatives
from a RIP program without the prior approval of the Director so long as the
RIP program complies with (e) below. A wholesaler wishing to exclude retail
cooperatives from a RIP program that does not comply with (e) below shall first
petition the Director and seek approval of its program. This petition may
include one or more such proposed programs and shall be submitted to the
Director at least 75 days in advance of the date on which the program(s) is
proposed to appear on the Current Price List. Such program(s) shall not appear
on the Current Price List without the Director's prior approval. The petition
shall include the following information upon which the Director shall make his
or her decision:
(1) A detailed description of
the proposed program(s);
(2) A
detailed description of how individual retail licensees will be able to
participate in the program(s);
(3)
A detailed explanation of why the program(s) will not destabilize the
marketplace, including, but not limited to, the creation of destructive price
wars, or unduly increase the consumption of alcoholic beverages; and
(4) Any other information the Director deems
necessary from a specific petitioner.
2. Alcoholic beverages in any part of the
State at prices lower than those charged by that person or entity elsewhere in
the State for the purpose of destroying competition, or eliminating a
competitor in the State.
3.
Alcoholic beverages at unreasonably low prices for the purposes of destroying
competition, or eliminating a competitor.
(d) The provisions of the foregoing shall not
prevent:
1. Differentials which make only due
allowance for actual differences in the cost of manufacture, sale or delivery
resulting from differing methods or quantities in which alcoholic beverage
products are sold or delivered to, or paid for by, purchasers including
discounts for prompt payment.
(e) Except as approved by the Director under
(c)1ii above, a retail incentive program (RIP) rebate shall conform to the
following requirements:
1. All wholesalers
participating in such programs shall provide the rebate in the form of a
monetary payment, payable only by business checks issued by the participating
wholesalers;
2. No RIP rebate shall
be offered on a quantity in excess of 50 cases for distilled spirits and wine,
or 250 cases for beer. For every RIP rebate, there shall be a corresponding
small quantity RIP rebate on the same product(s), for a quantity that is five
cases or less. The minimum quantity of any RIP rebate shall be one bottle for
distilled spirits or wine, or one case for beer;
i. RIP rebates may be based on a combination
of various sizes and products. However, no single RIP rebate shall exceed $
1,000;
ii. Nothing in this section
shall be deemed to limit the number of single RIP rebates which can be earned
for qualifying purchases;
iii. If a
wholesaler wishes to offer a RIP rebate using any formula or dollar amount
other than that specified in this subsection, it shall obtain the written
approval of the Director prior to offering such RIP rebate and prior to
publication thereof in the wholesaler's Marketing Manual and Current Price List
applicable to the period during which the RIP rebate will be offered;
3. All wholesalers and all
retailers participating in such programs shall keep a separate, complete and
accurate accounting of all such rebates disbursed or received and all documents
that reflect same; and
4. All
wholesalers participating in such programs shall publish the details in its
Marketing Manual and its Current Price List.
(f) The Director may, on his own initiative
or at the request of any affected industry member, investigate and, if
appropriate, disapprove and prohibit the continued or renewed use of any RIP,
including, but not limited to, a RIP that complies with the formula and dollar
amounts specified in (e) above, if the effect of that RIP is inconsistent with
the purposes of this subchapter. Whether to disapprove and prohibit a RIP will
be considered pursuant to
N.J.S.A. 33:1-39 and/or N.J.A.C. 13:2-19.
(g) If the Division investigates and/or
prosecutes any discount, rebate, allowance or advertising service offered by
any manufacturer, supplier, importer, brand registrant, wholesaler, or
distributor, the party offering it must make a prima facie showing that the
program is consistent with the applicable statutes and rules.
