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  The ILCC Legal Division

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TPP-4:
Donations Of Products And Services To Organizations

I. Purpose

To set the policy of the Illinois Liquor Control Commission and establish the procedures whereby manufacturers, distributors, importing distributors, and retailers may make donations of cash, alcoholic and non-alcoholic products and services to not-for-profit organizations and Special Event Retailer Licensees.

II. Policy

It is the policy of this Commission that donations of cash, non-alcoholic products and services only may be made by manufacturers, distributors and importing distributors to not-for-profit organizations and Special Event Retailer Licensees. Donations of alcoholic liquor products from a manufacturer, distributor or importing distributor may not be made for a commercial purpose. Donations of cash, alcoholic and non-alcoholic products, and services may be made by a retailer to not-for-profit organizations and Special Event Retailer Licensees. The proof of a donation not being made for a commercial purpose is on the manufacturer, distributor or importing distributor.

III. Background, Statute, Regulations

235 ILCS 5/6-5 generally states that no retail liquor licensee may accept, receive or borrow money, or anything else of value, or accept or receive credit of greater than 30 days (for wine and spirits), directly or indirectly, from any manufacturer, distributor or importing distributor. Likewise, no manufacturer, distributor or importing distributor may give or lend money or anything of value, or extend credit for greater than 30 days (for wine and spirits), directly or indirectly to any retail liquor licensee.

235 ILCS 5/6-6 provides that no manufacturer, distributor or importing distributor shall, directly or indirectly: (a) sell, supply, furnish, give, pay for, or loan or lease any furnishing, fixture or equipment to a retail liquor licensee; (b) pay for or advance, furnish, lend or give money to a licensee for payment of a license; (c) purchase or become owner of a note, mortgage, or other indebtedness of a retail licensee; (d) be interested in the ownership, conduct, or operation of a retail licensee; (e) be interested as the owner of a premises upon which a retail licensee is operating. Section 5/6-6 further generally allows manufacturers, distributors or importing distributors to supply retailers with one outside permanent and temporary sign, inside signage, and other advertising materials, all as enumerated in the statute, all within designated dollar limits.

Regulation 100.210 deals with courtesy wagon and/or coil box and pump limitations upon distributors supplying such items free of charge for picnics of retail liquor licensees. It generally states that the providing of free beer or wine to the retail licensee is not allowed [Subsection (b)]. Courtesy wagons and/or coil boxes and pumps may be supplied by distributors for picnics, carnivals or social events that are given by or under the auspices or sponsorship of an educational, fraternal, political, civic, religious, charitable, or non-profit organization, i.e., a Special Event Retailer Licensee. These regulations differentiate between retail licensees receiving Special Use Permits and the Special Event Retailer Licensee. Under Subsection (b), Special Use Permit licensees may receive donations of products only one time a year, while under Subsection (c) Special Event Retailer Licensees may receive donations of products at any time.

Regulation 100.280 provides that (a) no individual, partnership or corporation shall give away any alcoholic liquor for commercial purposes or in conjunction with the sale of non-alcoholic products or to promote the sale of non-alcoholic products; (b) no licensee shall give or offer to give away alcoholic liquor in connection with the sale of non-alcoholic products or to promote the sale of non-alcoholic products; and (c) no individual, partnership, corporation, or licensee shall advertise or promote in any way, whether on or off premises, either of the practices under Subsection (a) or (b). The regulation further delineates the “giving away of alcohol” to be impermissible if done for “commercial purposes” or in connection with the “sale of non-alcoholic products or to promote the sale of non-alcoholic products.”

The Special Event Retailer’s License (Not-for-Profit), as defined in Section 5/5-1(e), allows such licensee to sell and offer for sale, at retail, alcoholic liquors for use or consumption, but not for resale in any form and only at the location and on the specific dates designated for the special event in the license. This Commission has taken the view that such a license is “special” since (a) the profits of such licensee inure to the benefit of a charitable, fraternal, etc., organization; and (b) the license is limited to a short term. This Commission believes that contributions to such organizations, made with a clear charitable or donative purpose, are in the best interest of the alcoholic liquor industry.

When Regulations 100.210 and 100.280 are read together, it is this Commission’s position that the giving away of alcoholic product by a manufacturer, distributor or importing distributor may not be done for a commercial purpose or in connection with the sale of non-alcoholic products or to promote the sale of non-alcoholic products.

IV. Procedures

  1. Manufacturers, Distributors and Importing Distributors
    Manufacturers, distributors and importing distributors may make contributions of cash, non-alcoholic product, services, equipment or signs to a not-for-profit organization, as defined in the Illinois Liquor Control Act, and a Special Event Retailer Licensee subject to the following:
    1. Alcoholic products may not be given for a commercial purpose or in connection with the sale of non-alcoholic products or to promote the sale of non-alcoholic products.
    2. The Special Event Retailer must be allowed to sell other brands at its discretion. Although exclusivity agreements are generally considered to be a violation of the non-discrimination provisions of Trade Practice Policy 1, in order to allow Special Event Retailer Licensees to take advantage of potential contribution opportunities, this Commission shall allow Special Event Retailer Licensees to enter into exclusivity agreements which include the receipt of non-alcoholic product, services or cash from manufacturers, distributors or importing distributors.
    3. Signage dollar limitations contained in Section 5/6-6 do not apply to signs donated to a Special Event RetailerLicensee.
  2. Retailers
    Retail licensees may make donations of cash, alcoholic and non-alcoholic product and services to not-for-Profit organizations and Special Event Retail Licensees.

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