Current through Register Vol. 56, No. 18, September 16, 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
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
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.
