(i) Permanent outside signs shall be limited to one outside sign, per brand, in place and in use at any one time, costing not more than $893, exclusive of erection, installation, repair and maintenance costs, and permit fees and shall bear only the manufacturer’s name, brand name, trade name, slogans, markings, trademark, or other symbols commonly associated with and generally used in identifying the product including, but not limited to, “cold beer,” “on tap,” “carry out,” and “packaged liquor.”

(ii) Temporary outside signs shall be limited to one temporary outside sign per brand. Examples of temporary outside signs are banners, flags, pennants, streamers, and other items of a temporary and non-permanent nature. Each temporary outside sign must include the manufacturer's name, brand name, trade name, slogans, markings, trademark, or other symbol commonly associated with and generally used in identifying the product. Temporary outside signs may also include, for example, the product, price, packaging, date or dates of a promotion and an announcement of a retail licensee's specific sponsored event if the temporary outside sign is intended to promote a product, and provided that the announcement of the retail licensee's event and the product promotion are held simultaneously. However, temporary outside signs may not include names, slogans, markings, or logos that relate to the retailer. Nothing in this subpart (ii) shall prohibit a distributor or importing distributor from bearing the cost of creating or printing a temporary outside sign for the retail licensee's specific sponsored event or from bearing the cost of creating or printing a temporary sign for a retail licensee containing, for example, community goodwill expressions, regional sporting event announcements, or seasonal messages, provided that the primary purpose of the temporary outside sign is to highlight, promote, or advertise the product. In addition, temporary outside signs provided by the manufacturer to the distributor or importing distributor may also include, for example, subject to the limitations of this Section, preprinted community goodwill expressions, sporting event announcements, seasonal messages, and manufacturer promotional announcements. However, a distributor or importing distributor shall not bear the cost of such manufacturer preprinted signs.

(iii) Permanent inside signs, whether visible from the outside or the inside of the premises, include, but are not limited to: alcohol lists and menus that may include names, slogans, markings, or logos that relate to the retailer; neons; illuminated signs; clocks; table lamps; mirrors; tap handles; decalcomanias; window painting; and window trim. All permanent inside signs in place and in use at any one time shall cost in the aggregate not more than $2000 per manufacturer. A permanent inside sign must include the manufacturer's name, brand name, trade name, slogans, markings, trademark, or other symbol commonly associated with and generally used in identifying the product. However, permanent inside signs may not include names, slogans, markings, or logos that relate to the retailer. For the purpose of this subpart (iii), all permanent inside signs may be displayed in an adjacent courtyard or patio commonly referred to as a "beer garden" that is a part of the retailer's licensed premises.

(iv) Temporary inside signs shall include, but are not limited to, lighted chalk boards, acrylic table tent beverage or hors d'oeuvre list holders, banners, flags, pennants, streamers, and inside advertising materials such as posters, placards, bowling sheets, table tents, inserts for acrylic table tent beverage or hors d'oeuvre list holders, sports schedules, or similar printed or illustrated materials; however, such items, for example, as coasters, trays, napkins, glassware and cups shall not be deemed to be inside signs or advertising materials and may only be sold to retailers. All temporary inside signs and inside advertising materials in place and in use at any one time shall cost in the aggregate not more than $325 per manufacturer. Nothing in this subpart (iv) prohibits a distributor or importing distributor from paying the cost of printing or creating any temporary inside banner or inserts for acrylic table tent beverage or hors d'oeuvre list holders for a retail licensee, provided that the primary purpose for the banner or insert is to highlight, promote, or advertise the product. For the purpose of this subpart (iv), all temporary inside signs and inside advertising materials may be displayed in an adjacent courtyard or patio commonly referred to as a "beer garden" that is a part of the retailer's licensed premises.”

The restrictions contained in the section do not apply to signs, or promotional or advertising materials furnished by manufacturers, distributors or importing distributors to a government owned or operated facility holding a retailer’s license, as described in Section 5/6-5, nor to airplane licenses.

IV. Procedures

Retailers are allowed to have one permanent and one temporary sign per product brand displayed on the exterior of the licensed premises. Permanent signs are those made of wood, glass, metal, mirrors, neon, or other materials reasonably considered to be of a substantially permanent nature. Temporary signs include banners, flags, pennants, streamers, and other items of a temporary and non-permanent nature. Each sign must bear the logo, trademark, etc. of the manufacturer of the brand and be displayed on the exterior of the premises, such as on the building itself, on fences, in parking lots, or upon other structures reasonably considered to be a part of the realty upon which the licensed premises operates.

Signs painted on outside walls are considered exterior signs. Signs attached to the inside of a window but facing toward the outside are considered interior signs. Signs attached to the outside of a window are considered exterior signs. The concept of two signs per brand means that each brand can be represented by only one permanent and one temporary sign, however, there is no limit on how many times the brand name or brand logo can be contained on each sign. A permanently affixed two-sided banner is considered one sign. If a brand is contained on a permanent sign at least once, it can only appear on one other temporary banner, and vice-versa. Multi-logo signs count as one sign per brand for every brand depicted thereon. If such a sign is displayed, no brand name, trade name, etc., on the sign can be contained on any other exterior sign of similar type on the premises. A two sided banner, flag, pennant, poster, or streamer displaying the brand name on both sides is considered one outside temporary sign, A multiple sided or wrap around sign or signs affixed to a pole, fence, or other stationary object displaying the same brand name on both sides shall also be considered one outside temporary sign.

Signage on fences are considered outside signage. Umbrellas in beer gardens and on sidewalk cafes are considered inside signs and subject to the inside sign dollar limitations. Umbrellas in beer gardens do not affect the value limitations or one sign per brand limitations of outside signage.

Inflatable signs are ~~not~~ allowable ~~as the value of such signs will exceed the value limitations of~~ so long as they comply with the provisions and limitations of Section 5/6-6. Special event licensees may display inflatable signs, and there are no other restrictions on exterior signs displayed by a special event licensee, if the event is not held on a currently licensed retail premises.

If a location has been issued more than one license, it is allowed as many exterior signs per brand as it has accesses from the outside. Conversely, if none of the licensed premises has direct access from the outside, no exterior signs are permitted.

Temporary inside signs shall also include product displays such as display racks, bins, barrels or casts or similar items the primary function of which is to temporarily hold and display alcoholic beverages. All product displays must bear conspicuous and substantial advertising matter containing the brand, name of the manufacturer or manufacturers’ logos, permanently inscribed or securely affixed. The cost of such product display shall be includable in the aggregate cost per manufacturer under dollar limitations for temporary inside signs. Temporary inside signs may include names, slogans, markings or logos that relate to the retailer.

TPP-10 Signage Dollar Limits

(eff. 01-01-11)

Pursuant to P.A. 89-529, eff. 7-19-96, the language of Section 5/6-6 was amended to increase the so-called "signage dollar limits" to the levels reported hereafter. These dollar limits are to be adjusted annually by the Commission, using a "cost adjustment factor" to periodically update the dollar limitations prescribed in subparts (i), (iii) and (iv). The Commission establishes the adjusted dollar limitation on an annual basis beginning in January, 1997, and annually every year thereafter. The term "cost adjustment factor" means a percentage equal to the change in the Bureau of Labor Statistics Consumer Price Index or 5%, whichever is greater.

As of January 1, 2011, the following limits apply to the cost of signs and other advertising materials, which manufacturers, distributors and importing distributors provide to retailers:

PERMANENT OUTSIDE SIGNS: $ 1,856.94

PERMANENT INSIDE SIGNS: $ 4,159.11

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $ 679.48

SIGNAGE DOLLAR LIMITS (eff. 01-01-10)
PERMANENT OUTSIDE SIGNS:   $   1,768.51
PERMANENT INSIDE SIGNS:       $   3,961.06
TEMPORARY INSIDE SIGNS
AND OTHER ADVERTISING
MATERIALS                                      $     647.13

SIGNAGE DOLLAR LIMITS (eff. 01-01-09)
PERMANENT OUTSIDE SIGNS:   $   1,684.30
PERMANENT INSIDE SIGNS:       $   3,772.44
TEMPORARY INSIDE SIGNS
AND OTHER ADVERTISING
MATERIALS                                      $     616.31

SIGNAGE DOLLAR LIMITS (eff. 01-01-08)
PERMANENT OUTSIDE SIGNS:   $   1,604.46
PERMANENT INSIDE SIGNS:       $   3,593.03
TEMPORARY INSIDE SIGNS
AND OTHER ADVERTISING
MATERIALS                                      $     587.08

SIGNAGE DOLLAR LIMITS (eff. 01-01-07)

PERMANENT OUTSIDE SIGNS: $ 1,528.06
PERMANENT INSIDE SIGNS: $ 3,421.93

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $ 559.12

SIGNAGE DOLLAR LIMITS (eff. 01-01-06)

PERMANENT OUTSIDE SIGNS: $ 1,455.30

PERMANENT INSIDE SIGNS: $ 3,258.99

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $ 532.50

SIGNAGE DOLLAR LIMITS (eff. 01-01-05)

PERMANENT OUTSIDE SIGNS: $ 1,386.00

PERMANENT INSIDE SIGNS: $ 3,103.80

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $ 507.15

SIGNAGE DOLLAR LIMITS (eff. 01-01-04)

PERMANENT OUTSIDE SIGNS: $ 1,320.00

PERMANENT INSIDE SIGNS: $ 2,956.00

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $ 483.00

SIGNAGE DOLLAR LIMITS (eff. 01-01-03)

PERMANENT OUTSIDE SIGNS: $1,320

PERMANENT INSIDE SIGNS: $2,956

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $483

These figures are exclusive of erection, installation, repair and maintenance costs, permit fees, wherever applicable..

SIGNAGE DOLLAR LIMITS (eff. 01-01-02)

PERMANENT OUTSIDE SIGNS: $1,197

PERMANENT INSIDE SIGNS: $2,681

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $438

SIGNAGE DOLLAR LIMITS (eff. 01-01-02)

PERMANENT OUTSIDE SIGNS: $ 1,197.00

PERMANENT INSIDE SIGNS: $ 2,681.00

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $ 438.00

SIGNAGE DOLLAR LIMITS (eff. 01-01-01)

PERMANENT OUTSIDE SIGNS: $ 1,140.00

PERMANENT INSIDE SIGNS: $ 2,553.00

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $ 415.00

SIGNAGE DOLLAR LIMITS (eff. 01-01-00)

PERMANENT OUTSIDE SIGNS: $ 1,086.00

PERMANENT INSIDE SIGNS: $ 2,431.00

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $ 395.00

SIGNAGE DOLLAR LIMITS (eff. 01-01-99)

PERMANENT OUTSIDE SIGNS: $ 1,034.00

PERMANENT INSIDE SIGNS: $ 2,315.00

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $ 376.00

SIGNAGE DOLLAR LIMITS (eff. 01-01-98)

PERMANENT OUTSIDE SIGNS: $ 985.00

PERMANENT INSIDE SIGNS: $ 2,205.00

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $ 359.00

SIGNAGE DOLLAR LIMITS (eff. 01-01-97)

PERMANENT OUTSIDE SIGNS: $ 938.00

PERMANENT INSIDE SIGNS: $ 2,100.00

TEMPORARY INSIDE SIGNS

AND OTHER ADVERTISING

MATERIALS $ 341.00

TPP-11 Consumer Coupons and Rebates

I. Purpose

To set the policy of the Illinois Liquor Control Commission and establish the procedures whereby coupons/rebates may be provided by manufacturers, distributors and importing distributors to consumers through retail licensees.

II. Policy

It is the policy of this Commission that coupons/rebates may be given to consumers so long as such promotions are offered to similarly situated retailers offering off-premise sales in the manufacturer’s, distributor’s or importing distributor’s geographical areas; on a non-discriminatory basis, in direct relation to the amount of product purchased.

III. Background

Section 5/6-5 of the Illinois Liquor Control Act and this Commission’s Trade Practice Policy TP-1 on the “Of Value” Standard are incorporated herein by reference. The usual manner in which manufacturers, distributors, and importing distributors provide consumer rebates or refunds involves the use of coupons. There are two general types of coupons: “mail-in” coupons, also known as “rebate/redemption” coupons, and “cash register” coupons, also known as “instant refund” coupons. To use the “mail-in” the consumer purchases the product for full price from the retailer and then mails the coupon to the manufacturer, distributor or importing distributor, with proof of purchase. The manufacturer, distributor, importing distributor or a designated third-party mails a rebate check directly to the consumer. To use the “cash register” coupon the consumer presents the coupon to the retailer and receives an immediate reduction in the purchase price from the retailer. The retailer forwards the coupon to the manufacturer, distributor or importing distributor, or its third-party agent, which directly reimburses the retailer for the value of the coupon.

Generally, the coupon is an acceptable method of brand promotion, however, such promotion must be done in such a manner so that unfair financial advantage is not given to any similarly situated retailer or group of retailers in a geographical area. Providing an unfair financial advantage or distributing the coupons in a discriminatory manner would allow the retailer using the coupons to receive something “of value” over retailers which had not been provided with the coupons, since customers would generally prefer to purchase an identical brand from the retailer with coupons, resulting in a price saving to the consumer. Manufacturers, distributors and importing distributors must provide similarly situated retailers purchasing product with coupons in relation to the quantity purchased. Thus, one retailer cannot receive a disproportionate number of coupons per case of product, while others receive fewer per case. The practice of unequal distribution shall be considered a discriminatory discounting program by this Commission. The Commission does recognize quantity pricing schemes as between on-and-off premise establishments, and such a distinction will be applied to retail coupon programs.

IV. Procedure

Due to the potential for abuse, including fraud, the redemption of coupons without actual purchase of product, and other “of value” situations, the use of the “point-of-sale instant refund” coupon is not allowed.

Manufacturers, distributors and importing distributors may conduct coupon programs as follows:

1. The program must be through the manufacturer, distributor, importing distributor or a third party, usually a clearinghouse; no retailer redemption shall be allowed.

2. “Mail-in” coupons shall require proof of purchase with a dated, retail-specific receipt.

3. “Instant “ coupons shall be reimbursed to the retailer only with substantiation through documentation that there has been sufficient purchase of product to warrant the reimbursement.

4. Coupons cannot be retailer specific.

5. Coupons may be available in print media (newspapers, magazines etc.) but not by direct mail.

6. Coupons may be available only to adults 21 years of age or older.

7. No purchase requirements may be imposed.

8. Coupons must contain an expiration date.

9. Commission’s rules and regulations prohibiting the giving away of alcoholic liquor for a commercial purpose or in connection with the sale of non-alcoholic products or to promote the sale of non-alcoholic products shall apply. (Regulation 100.280)

10. Coupons must be made available to all similarly situated retailers in similarly situated marketplaces in the distributors designated geographical area.

The Commission realizes that certain larger retailers may wish to have a uniform coupon/rebate program which is regional, state-or-nation-wide. While the Commission does not wish to dictate whether such business practices are undertaken by any retail licensee, it recognizes that certain "of value” situations may come into play with such programs, and mandatory memberships, enrollments, or monthly fees may exclude some or all suppliers from participation (Section 5/6-5 and 5/6-6).

Coupon programs for a specific retail licensee are allowable on the following additional bases:

1. Manufacturer, distributor, and importing distributor coupons may appear in retailer-specific promotional advertisements, however, the coupons must be capable of being redeemed at any retailer.

2. The program may not be compulsory; if manufacturers, distributors or importing distributors wish to use the retailer system, or the system of the third-party’s with which the retailer has contracted, such participation must be on a voluntary basis.

3. Failure of a manufacturer, distributor or importing distributor to participate in the third-party’s retailer program shall not preclude such manufacturer, distributor or importing distributor from offering its own coupon program at said retailer’s premise.

4. Any booklets, leaflets, or other literature containing the manufacturer’s, distributor’s or importing distributor’s products, and describing or promoting the coupon/rebate program shall not be retailer specific. This requirement does not prohibit retailer specific advertisements, flyers or circulars which are paid for by the retailer, and which advertise, promote or contain the retailer’s coupon or rebate for a particular manufacturer’s, distributor’s or importing distributor’s alcoholic liquor products.

5. All checks in reimbursement for coupons shall not be retailer specific, nor shall any such checks which are sent to or to be used by consumers, be redeemable only at such retailer’s place of business.

6. Although coupons may combine the purchase of alcoholic products with other products, such programs may not require that the other items be individual retailers specific, so that the purchase of an alcoholic product which would entitle the purchaser to a specific non-alcoholic items involves items found only at one retailer would operate as an exclusion of other retailers, and would be the giving of something “of value” to such retailer.

Section 5/6-5 and 5/6-6 of the Liquor Control Act should be consulted for additional “of value” signage and inside advertising material limitations.

TPP-12 Hotel/Motel Mini Bars

I. Purpose

To set the policy of the Illinois Liquor Control Commission and establish the procedures whereby hotels and motels possessing retail liquor licenses may sell alcoholic beverages from “mini bars.”

II. Policy

It is the policy of this Commission to allow hotels and motels possessing retail liquor licenses to sell alcoholic beverages from “mini bars.”

III. Procedures

To sell alcoholic beverages from mini bars in hotels and motels, a retail liquor licensee must comply with the following:

1. The licensee must possess valid local and state retail liquor licenses.

a) No licensee, individual, partnership or corporation shall give away any alcoholic liquor for commercial purposes or in connection with the sale of non‑alcoholic products or to promote the sale of non‑alcoholic products.

b) No licensee, individual, partnership, or corporation shall advertise or promote in any way, whether on or off-licensed premises, any of the practices prohibited under subsection (a) above. This includes, but is not limited to, advertisements using the words “free” or “complimentary” with alcoholic liquor.

c) Subsection (a) above shall not apply to test marketing or tasting.

(Source: Amended at 21 Ill. Reg. 5542, effective May 1, 1997)

Section 100.10 Definitions

The following words or phrases are defined as follows:

“Tasting” means a supervised presentation of alcoholic products to the public at an off-premise licensed retailer for the purpose of disseminating product information and education, with consumption of alcoholic products being an incidental part thereof. Only products registered with the Commission may be tasted in the following amounts: Distilled Spirits 1/4 oz., Wine 1 oz., and Beer 2 oz.; notice of the tasting may be given. Tasting must be done by a licensee and/or registered tasting representative in accordance with Section 100.40.

“Test Marketing” means to test new products or products unfamiliar to the sampler through a marketing firm or the like.

Section 100.40 Registration of Tasting Representatives

a) Any non-licensee wishing to conduct a tasting as defined in Section 100.10 must register with the Commission. A registered tasting representative acts as the agent of the licensee.

b) Registration is fulfilled by submitting a form including the name of the person, address, licensee representing, if applicable, and any other questions deemed appropriate and necessary, and a $100.00 administrative fee payable annually to the Commission.

c) The registration identification, or a copy thereof, must be available for inspection during any tasting.

d) Any applicant must meet all eligibility requirements as stated in 235 ILCS 5/6-2.

(Source: Amended at 23 Ill. Reg. 3787, effective March 15, 1999)

5/6-31. Product Sampling.

(a) Retailer, distributor, importing distributor, manufacturer and nonresident dealer licensees may conduct product sampling for consumption at a licensed retail location. Up to 3 samples, consisting of no more than (i) 1/4 ounce of distilled spirits, (ii) one ounce of wine, or (iii) 2 ounces of beer may be served to a consumer in one day.(Source: P.A. 90-432, eff. 1/1/98; 90-626,eff. 1-1-99)

From the general prohibition against the giving away of alcoholic liquors, it is the Commission’s position that “test marketing” and tasting of products, including those of an alcoholic nature, are valuable research tools in the development, production and ultimate marketing of products. With the creation of the “tasting” it became apparent that there were individuals and companies which were providing services to the liquor industry who were dispensing alcoholic beverages to the public without being licensed themselves, or being direct employees or agents of licensees. It was to deal with this situation that the “Tasting Representative” was created.

IV. Procedures

Please note that the regulatory “sampling” has been removed from this trade practice policy. With the passage of P.A. 90-432, and the creation of the statutory “product sampling” the “sampling” activities authorized by rule were made moot. The “sampling” section of Regulation 100.10 was thereafter repealed. There is both statutory and regulatory authority for the commercial consumption of alcohol for which payment by the consumer has not been made. The major distinction between these types of consumption is the nature of the premises upon which the activity may be conducted: the “tasting” may be conducted upon “off-premises” licensed retail premises, while the “product sampling” may be conducted upon any retail licensed premises.

From the general prohibition against the giving away of alcoholic liquors for commercial purposes, it is the Commission's position that product sampling and tasting of alcoholic liquor products are valuable research tools in the marketing of products and the creation of brand loyalty. This Commission will grant approval to the test marketing of alcoholic products, on a case-by-case basis, only upon written request, stating with specificity the parameters of the testing, and to include at a minimum the following information.

Test marketing requirements:

Manufacturers, Distributors and Importing Distributors:

1. The name and address of the marketing firm conducting the test marketing.

2. The location where the testing will be conducted.

3. The number of participants involved.

4. Representation that the age of the participants is 21 years of age or older.

5. The duration of the test.

6. The total amount of liquor involved in the testing and the total amount to be given each participant.

~~7. Statement that all federal and Illinois taxes have been or will be paid.~~

~~8. The name and address of the wholesaler from whom the product is purchased.~~

Tasting and Product Sampling requirements are simply set forth in the statute and rules. An important point to remember is that both the rules tasting and the statutory product sampling must be performed upon licensed retail liquor premises. No tasting or product sampling can legally be conducted on a non-licensed premises, i.e., “in-home tastings,” or product samplings at a flower shop.

A manufacturer, distributor and importing distributor may furnish, free of charge to the retail liquor licensee, cups and napkins in conjunction with tastings, test marketings and product samplings.

If the retailer has previously purchased the product to be tasted or tested, the manufacturer, distributor or importing distributor may pay for such product at the retailer’s original cost. If the manufacturer, distributor or importing distributor supplies the product, the product remaining after the tasting or testing must be returned to the manufacturer, distributor or importing distributor (variations from these provisions will be considered consignment sales pursuant to Federal Regulations and the “Of Value” provisions of 235 ILCS 5/6-5).

TPP-15 Geographic Territories

I. Purpose

To set the policy of the Illinois Liquor Control Commission and establish the guidelines which shall control the relationship between Manufacturers and Distributors in the following areas:

A. Geographic Territories

B. Registration of Brands

C. Sales Outside of Geographic Territory

D. Sub-distributor Exception

E. Withdrawal of Registered Distributor

F. Registration of Products and Distributors

G. “Secondary” alcohol marketplace

II. Policy

It is the policy of this Commission that manufacturers shall designate distributors for the sale and distribution of their brands within specified geographic territories, and that retail licensees must purchase alcoholic beverages from distributors authorized to sell in such designated geographic territories. Distributors shall regularly service all retail licensees within their geographic territories without prejudice in accordance with State statute (235 ILCS 5/6-17.1); and shall make available to all retail licensees any products for which they have distribution rights.

III. Background, Statutes, Regulations

235 ILCS 5/6-9 of the Liquor Control Act (235 ILCS 5/1, et seq.) and 815 ILCS 720/5(8) of the Beer Industry Fair Dealing Act (815 ILCS 720/1, et seq.) provide the guidelines for the sale of alcoholic liquors within geographic territories.

Section 100.60 of the Rules and Regulations of the ILCC also apply.

815 ILCS 720/3 and 4 provide the guidelines for cancelling an agreement between the brewer and the wholesaler-distributor.

For the purposes of this policy, a “manufacturer” shall include any manufacturer, importing distributor, distributor, non-resident dealer or foreign importer who owns or controls a trade mark, brand or name of alcoholic liquor.

IV. Procedures

A. Restricted Geographic Territories

Each manufacturer shall designate a distributor(s) for the sale of its product(s) to retailers within a designated geographic territory (235 ILCS 5/5-1(a-1) and 5/6-9).

1. The manufacturer of an alcoholic product other than beer may designate more than one distributor within a geographic territory (235 ILCS 5/6-9).

2. A beer manufacturer may designate only one distributor within a geographic territory (815 ILCS 720/5(8)).

B. Registration of Brands

1. Every manufacturer must register the name of each distributor to whom such manufacturer has granted the right to sell its product with the ILCC (235 ILCS 5/6-9).

2. The registration statement must specify:

a. the particular brands of alcoholic liquor each distributor has been granted;

b. the geographical area for which such right is granted; and

c. the period of time for which such right is granted.

3. Such registration shall be made only by the person who owns or controls the trademark, brand

or name of any alcoholic liquor (Section 100.60(b)).

4. Such registration shall be fulfilled by submitting the form to the Commission (235 ILCS 5/5-1(a-1).

C. No Sales Outside of Geographic Territory

1. A distributor may not sell alcoholic liquor outside its designated geographic territory. Nor may a distributor sell alcoholic liquor to a retail licensee whose premises are located outside of such geographic territory (235 ILCS 5/6-9).

2. A retailer may not purchase alcoholic liquor from a distributor who does not bear distributing rights in the geographic territory in which the retailer’s place of business is situated (Section 100.60(d)).

D. Sub-distributor Exception

In 1979, the narrow “Sub-distributor” exception to 235 ILCS 5/6-9 has been carved out for certain distributors who qualify as “sub-distributors.” These sub-distributors, to whom the manufacturer has not granted the right to sell a brand of alcoholic liquor, may nevertheless purchase such brand from a duly appointed distributor and sell at wholesale. However, the following restrictions apply:

1. The sub-distributor must be a licensed Illinois distributor who has been engaged in the purchase of a brand for resale for a period of two years prior to November 8, 1979;

2. The sub-distributor must properly notify the Commission in writing of the brands it wishes to purchase and resell;

3. The sub-distributor’s business address must be within the geographical area of his distributor; and

4. The sub-distributor may only make sales within the geographical area of its distributor.

This subsection was amended in 1998 to add language which mandated that the sub-distributor sales could only be made to retail licensees whose licensed premises were located within the geographical area for which the licensed Illinois distributor from whom the sub-distributor purchased were made. And the 1998 amendment also added to the paragraph following the above, that any licensed Illinois distributor who had not been granted the right to sell any alcoholic liquor at wholesale and was purchasing alcoholic liquor from a person who had been granted the right to sell at wholesale may sell and deliver only to retail licensees whose licensed premises were within the same geographical area as the person who had been granted the right to sell at wholesale.

E. Withdrawal of Registered Distributor

1. Beer

a. When a brewer terminates an agreement granting a wholesaler the right to sell a particular brand, that brewer must file a “Withdrawal of Registration” form with the ILCC. A copy of this “Withdrawal of Registration” shall be sent registered or certified mail to all those listed thereon to serve as notice of the contents (Reg. 100.60).

b. A brewer may terminate an agreement without furnishing any prior notification for the following reasons:

i. Wholesaler’s failure to pay any account when due, upon demand by the brewer for such payment, in accordance with agreed payment terms.

ii. Wholesaler’s assignment for the benefit of creditors, or similar disposition, of substantially

all of the assets of such party’s business.

ii. Insolvency of wholesaler, or the institution of voluntary or involuntary proceedings in

bankruptcy involving the wholesaler.

iv. Dissolution or liquidation of the wholesaler.

v. Any attempted transfer of business assets, voting stock

c. For all other reasons, the brewer or wholesaler must provide written notice not less than ninety (90) days prior to the date upon which a termination of any such agreement is sought.

The notice shall contain the following:

i. a statement of intention to cancel, refusal to renew, or termination for other specified reasons;

ii. a complete statement of reasons, including all data and documentation necessary to apprise the wholesaler of the reasons for the action; and

iii. the date on which the action shall take effect (815 ILCS 720/3(2)).

d. The brewer and wholesaler must make reasonable good faith efforts to resolve any disagreements. If, within 90 days after receiving notification of an intent to terminate, the affected party rectifies or otherwise eliminates the specified cause of the disagreement, the party serving notice to cancel, refusal to renew, or otherwise terminate, may not do so (815 ILCS 720/4).

2. Alcoholic Liquors Other Than Beer

a. There is no 90 day notification provision governing the termination of an agreement between a manufacturer and a distributor for the sale and distribution of alcoholic liquors other than beer.

b. However, upon termination of an agreement, the manufacturer must file a “Withdrawal of Registration” form.

“Manufacturer” means every brewer, fermenter, distiller, rectifier, wine maker, blender, processor, bottler or person who fills or refills an original package, whether for himself or for another, and others engaged in brewing, fermenting, distilling, rectifying or bottling alcoholic liquors.

B.235 ILCS 5/1-3.17. Retailer

“Retailer” means a person who sells, or offers for sale, alcoholic liquor for use or consumption and not for resale in any form.

C.235 ILCS 5/5-1(n) Brew Pub

A brew pub license shall allow the licensee to manufacturer beer only on the premises specified on the license, to make sales of the beer manufactured on the premises to importing distributors, distributors and to non-licensees for use and consumption, to store the beer upon the premises, and to sell and offer for sale at retail.

D.235 ILCS 5/1-3.13. Manufacture

“Manufacture” means to distill, rectify, ferment, brew, make, mix, concoct, process, blend, bottle or fill an original package with an alcoholic liquor, whether for oneself or for another, and includes blending but does not include the mixing or other preparation of drinks for serving by those persons authorized and permitted in this Act to serve drinks for consumption on the premises where sold. All containers or packages of blended alcoholic liquors shall have affixed thereto a label setting forth and stating clearly the names of all ingredients which the blended alcoholic liquors offered for sale shall contain.

V. Procedures

A. Brewing on Premises for Sale at Retail

1.Pursuant to 235 ILCS 5/5-1(n), a brew pub license requires and permits the following:

a. the licensee must manufacture the beer on the licensed premises;

b. the licensee must store and sell the beer from the licensed premises;

c. the licensee may sell the beer to distributors and importing distributors for resale;

d. the licensee may sell and offer for sale the beer at retail for consumption only on the licensed premises, and

e. the licensee may sell and offer for sale other alcoholic beverages at retail.

B. The ILCC views a Brew Pub as a retailer which manufactures its own beer. All retailer statutes and regulations apply. A Brew Pub licensee may not obtain a distributor’s license.

C. The Commission has received recent inquiries about activities which may be taking place upon the premises of “brew pubs.” Prior to the enactment of the “Brew Pub” statute (235 ILCS 5/1-3.33; 5/5-1(n)) entities seeking to conduct business under the umbrella of a “brew pub” were required to secure both a retailer and a brewer license. Local approval/licensing was also required of the “retailer” aspects of such a business.

When the General Assembly enacted the amendments to the Illinois Liquor Control Act, referenced above, the “brew pub” was as defined as follows:

A' 1-3.33. “Brew Pub’ means a person who manufactures beer only at a designated premises to make sales to importing distributors, distributors, and to non-licensees for use and consumption only, who stores beer at the designated premises, and who is allowed to sell at retail. (Source: P.A. 88-91)” The licensing description of a “brew pub” is as follows: “A brew pub license shall allow the licensee to manufacture beer only on the premises specified in the license, to make sales of the beer manufactured on the premises to importing distributors, distributors, and to non-licensees for use and consumption, to store the beer upon the premises, and to sell and offer for sale at retail.”

Some confusion may have arisen from a reading of the portion of the statute which dealt with the right of a manufacturer to secure one retailer license, which predated the foregoing “brew pub” legislation. Section 5/6-4(e) provided that the manufacturer which had received a retailer’s license was permitted to sell “beer only.”

The omission of a similar limitation on the brew pub license was intended to not restrict the brew pub licensee to such “sale of beer only” upon the licensed premises. It was the intent of the legislation, and it is the position of this Commission, that a brew pub licensee may sell wine and distilled spirits, in addition to, beer only for consumption upon its licensed premises. This therefore allows brew pub licensees to purchase for resale whatever alcoholic liquors all other retail liquor licensees can, subject only to the type of license the entity has secured from the local liquor control commissioner. Further, the question has been posed whether a brew pub can bottle its product for sale to retail consumers for “off-premises” consumption. Notwithstanding the nature of the local license issued the business, i.e., combination, on- and off-premises, the Illinois Liquor Control Act does allow sales for “off-premises” consumption. A brew pub which wants its product to be able to be sold for such “off-premises” consumption, would have to act as any other brewer and register a distributor, which will handle the product for retail purchase.

TPP-21 Reserved

TPP-22 HAPPY HOUR LAW

I. Purpose

This Policy statement establishes this Commission’s policy as to various licensee promotions, and defines the general procedure used by this Commission to enforce the Happy Hour Law (235 ILCS 5/6-28).

II. Policy

It is the policy of this Commission to define the types of promotions and activities allowed under the Happy Hour Law, to monitor and verify compliance with those defined promotions and activities, and to enforce this policy as provided by law.

III. Definitions

A. MEAL PACKAGE

Any food, excluding snacks and other so-called “finger food,” that is served on the licensed premises, which includes the service of alcoholic beverages as part of such package.

B. DAY

The period of time beginning from the opening of business to the close of business, not exceeding twenty-four hours.

C. DRINKS

The term shall also include more than one container of an alcoholic beverage or a pitcher of an alcoholic beverage.

IV. Procedure

The Happy Hour Law, effective 8/31/89, was passed in order to eliminate the over consumption of alcoholic liquor and was intended to eliminate promotions that would encourage such over consumption.

The Happy Hour Law states in relevant part:

(b) No retail licensee or employee or agent of such licensee shall:

(1) serve 2 or more drinks of alcoholic liquor at one time to one person for consumption by that one person, except selling or delivering wine by the bottle or carafe;

(2) sell, offer to sell or serve to any person an unlimited number of drinks of alcoholic liquor during any set period of time for a fixed price, except at private functions not open to the general public;

(3) sell, offer to sell or serve any drink of alcoholic liquor to any person on any date at a reduced price other than that charged other purchasers of drinks on that day where such reduced price is a promotion to encourage consumption of alcoholic liquor...;

(4) increase the volume of alcoholic liquor contained in a drink, or the size of a drink of alcoholic liquor, without increasing proportionately the price regularly charged for the drink on that day;

(5) encourage or permit, on the licensed premises, any game or contest which involves drinking alcoholic liquor or awarding of drinks of alcoholic liquor as prizes for such game or contest on the licensed premises; or

(6) advertise or promote in any way, whether on or off the licensed premises, any practices prohibited under paragraphs (1) through (5).”

(1) offering free food or entertainment at any time;

(2) including drinks of alcoholic liquor as part of a meal package;

(3) including drinks of alcoholic liquor as part of a hotel package;

(4) negotiating drinks of alcoholic liquor as part of a contract between hotel or multi-use establishments and another group for the holding of any function, meeting, convention or trade show;

(5) providing room service to persons renting rooms at a hotel;

(6) selling pitchers (or the equivalent, including but not limited to buckets), carafes, or bottles of alcoholic liquor which are customarily sold in such manner and delivered to 2 or more persons at one time; or

(7) increasing prices of drinks of alcoholic liquor in lieu of, in whole or in part, a cover charge to offset the

cost of special entertainment not regularly scheduled.”

In addition, Regulation 100.280 of this Commission states as follows:

a) No individual, partnership or corporation shall give away any alcoholic liquor for commercial purposes or in connection 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.

c) No individual, partnership, corporation or licensee shall advertise or promote in any way, whether on or off licensed premises, any of the practices prohibited under subsections (a) or (b) above.”

A. The Happy Hour Law prohibits:

1. Serving two or more drinks to one person for consumption by that person. This requires that individuals be served only one drink at a time. Also prohibited are promotions such as A2 for 1” drinks, or any type of promotion which discounts drinks at a 2 for 1 or greater (3-1) price. A “shot and a beer” (boilermaker) promotion is allowable as such is considered one drink under this provision.

2. Serving an unlimited amount of drinks during a set period of time for a fixed price. This prohibits the practice of charging a flat fee for “all you can drink” all day or during a set period of time. However, an exception is made for private functions not open to the general public, but this requires that the number of participants at the event must be limited by the licensee either through the issuance of tickets, invitations or set number of participants at the activity. Specifically excepted are weddings, private parties, fund-raising functions, etc., at which the emphasis is on the participants, event itself or beneficent purpose, and not on the consumption of alcohol.

3. Reducing prices of drinks during a specified period during the day or to a specified group of individuals. This is the provision that prohibits the euphemistic “Happy Hour” and “Ladies Night” during which all patrons or only a specific group is given a promotion encouraging consumption. Prices for any specific product may not change during the business day. All customers must be charged the same price for the same alcoholic liquor. A multi-use establishment may charge different prices in different rooms, provided such prices remain the same all day, and separate price schedules are kept for each room. Regulation 100.280 forbids retailers from giving away alcoholic liquor, however, the practice of a bartender buying a drink for a customer is allowable if such practice is not advertised, if such drink is purchased as a “reward” for patronage or loyalty, and is not done to encourage consumption.

4. Increasing the volume of alcoholic liquor contained in a drink but must be capable of being used for any type of purchase at the licensed premises (e.g. food, soft drinks, promotional items). without proportionately increasing the price regularly charged for that drink on that given day. This requires that the price of a drink be increased by the proportionate increase of the alcohol in the drink. The price of a “double” must therefore be twice the price of a regular, one-shot drink.

5. A licensee from encouraging or permitting, on its premises, games or contests which involve drinking alcoholic liquor or awarding drinks as prizes. Although a licensee may sponsor games and contests at its premises, alcoholic product may not be a prize for winning such contests, and the drinking of alcohol may not be part of the contest (e.g. chugging contest). A licensee may offer coupons for winning such contest; however, the coupons may not be used solely for alcohol (e.g. drink coupons)

6. Advertising, in any way, any practice prohibited by the Happy Hour Law. The act of advertising a promotion which violates the Happy Hour Law is, in itself, a violation. This Commission takes the position that using the word “free” (or any form thereof) in any advertising promotion regarding alcoholic liquor (e.g. “buy a case, get a six-pack free”) is a violation of both 5/6-28 and Regulation 100.280. Such promotions encourage the over consumption of alcoholic liquor.

7. Serving traditionally “individual” drinks in carafes, pitchers, etc., is considered by the Commission to be a violation of “Happy Hour.”

B. The Happy Hour Law permits:

1.Offering free food or entertainment. The Happy Hour Law was intended to control only the sale of alcoholic liquor, thus promotions which offer free products, including entertainment, to attract customers, are not prohibited. Nothing in this Practice or in the Act prohibits a licensee from discriminating between classes of customers in areas other than the sale of alcohol. Therefore, it is the position of this Commission that free or reduced prices for food, cover charges and other non-alcohol related items are not controlled by the Happy Hour Law.

2.Including drinks with a meal or hotel package. The emphasis of such promotion must be the meal or hotel package itself, and not unlimited consumption of alcohol. A meal package is defined above, and must not be of the general hors d’oeuvres variety. Meal package promotions must be confined to a restricted area of the licensed premises and customers not partaking of the meal package may not be allowed to mingle with the patrons participating in the meal package.

3. Selling pitchers, carafes or bottles of alcoholic liquor customarily sold in that manner and delivered to two (2) or more persons. Promotions such as “buckets” are allowable, as long as such promotions comply with all the other stated provisions of the Happy Hour Law.

4. Increasing drink prices in lieu of a cover charge if special entertainment, which is not regularly scheduled, is at the licensed premises. This provision allows a licensee to increase drink prices, in lieu of a cover charge, to defray the cost of non-regularly scheduled entertainment. However, this practice is not allowed for entertainment which is of the “house band” variety. If an establishment has various entertainment acts scheduled on a regular basis, this will also be considered to be of the “house band” variety. Nothing in this practice, or in the Act, prohibits the licensed establishment from discriminating between classes of customers in other area, not involving the sale of alcohol. Therefore it is the position of this Commission that free or reduced prices for cover charges is not controlled by the Happy Hour Law.

TPP-23 Transportation And Delivery Of Alcohol

I. Purpose

This policy establishes guidelines for the transportation and delivery of alcohol within the State of Illinois.

II. Policy

It is the policy of the Illinois Liquor Control Commission (ILCC) to allow the transportation and delivery of alcohol under specified circumstances.

III. Background

235 ILCS 5/2-1 provides that no person shall transport or deliver any alcoholic liquor for beverage purposes, except as specifically provided by the Liquor Control Act (“Act”). However, the Act does not prevent the transportation of alcoholic liquor for the personal use of the possessor, his family or guests.

235 ILCS 5/6-7 provides that any package containing alcoholic liquor shall have affixed to it all cancelled revenue stamps which may be provided by Federal law and shall bear a clear and legible label containing certain specified information. Additionally, the package shall be securely sealed so that the contents cannot be removed without breaking the manufacturer’s seal.

235 ILCS 5/6-8 provides the procedure for the transportation and delivery of alcohol into Illinois.

235 ILCS 5/6-29, the Interstate Reciprocal Wine Shipments provision, limits the shipping of wine for personal use to not more than two (2) cases per year per adult resident of Illinois. Each case may contain not more than nine (9) liters.

235 ILCS 5/6-29.1, Direct shipments of alcoholic liquor.

Pursuant to the Twenty-First Amendment to the United States Constitution allowing the states to regulate the distribution and sale of alcoholic liquor and pursuant to the federal Webb-Kenyon Act declaring that alcoholic liquor shipped in interstate commerce must comply with state laws, the General Assembly hereby finds and declares that selling alcoholic liquor from a point outside this State through various direct marketing means, such as catalogs, newspapers, mailers, and the Internet, directly to residents of this State poses a serious threat to the State's efforts to prevent youths from accessing alcoholic liquor; to State revenue collections; and to the economy of this State.

Any person manufacturing, distributing, or selling alcoholic liquor who knowingly ships or transports or causes the shipping or transportation of any alcoholic liquor from a point outside this State to a person in this State who does not hold a manufacturer's, distributor's, importing distributor's, or non-resident dealer's license issued by the Liquor Control Commission, other than a shipment of sacramental wine to a bona fide religious organization, a shipment authorized by Section 6-29, or any other shipment authorized by this Act, is in violation of this Act.

The Commission, upon determining, after investigation, that a person has violated this Section, shall give notice to the person by certified mail to cease and desist all shipments of alcoholic liquor into this State and to withdraw from this State within 5 working days after receipt of the notice all shipments of alcoholic liquor then in transit.

Whenever the Commission has reason to believe that a person has failed to comply with the Commission notice under this Section, it shall notify the Department of Revenue and file a complaint with the State's Attorney of the county where the alcoholic liquor was delivered or with appropriate law enforcement officials.

Failure to comply with the notice issued by the Commission under this Section constitutes a business offense for which the person shall be fined not more than $1,000 for a first offense, not more than $5,000 for a second offense, and not more than $10,000 for a third or subsequent offense. Each shipment of alcoholic liquor delivered in violation of the cease and desist notice shall constitute a separate offense.

235 ILCS 5/8-12 and Section 420.100 of the Revenue Regulations provide that every person or carrier transporting alcoholic liquors into the State of Illinois shall keep a record of any deliveries and file a monthly report with the Department of Revenue.

235 ILCS 5/8-1 and Section 420.30 of the Revenue Regulations provide for the gallonage tax liability for the sale and transportation of alcohol.

IV. Procedures

A. All alcoholic liquor imported into Illinois must be off-loaded from the common carrier, vehicle or mode of transportation by which the alcoholic liquor was delivered into Illinois.

B. All alcoholic liquor imported into Illinois must be delivered to an importing distributor.

C. A distributor or importing distributor, upon application to the ILCC, may secure permission to deliver beer directly to a retail licensee holding or otherwise participating in a special event.

D. Any manufacturer, distributor, importing distributor or foreign importer may only sell or deliver packages containing alcoholic liquor which have affixed to them the following:

1. all cancelled revenue stamps which may be provided by Federal law,

2. a clear and legible label containing

a. the name and address of the manufacturer,

b. the kind of alcoholic liquor contained therein, and

c. in the case of alcoholic liquor (other than beer, imported Scotch whiskey and brandy 4 years old or more) the date when manufactured and the minimum alcoholic content thereof.

E. No package shall be delivered by any manufacturer, distributor, importing distributor or

foreign importer unless the same shall be securely sealed so that the contents thereof cannot be removed without breaking the seal so placed thereon by the manufacturer.

F. Any person or party who brings, carries or transports alcoholic liquors into the State of

Illinois for delivery in Illinois must prepare and file with the Department of Revenue for each month, not later than the fifteenth day of the month following that for which it is made, a report stating the following information:

1. the name of the person or party making the report,

2. the address in Illinois at which the records supporting such report are kept and open to inspection,

3. the period of time covered by the report,

4. the name and business address of each consignor,

5. the name and business address of each consignee,

6. the kind and quantity of alcoholic liquors delivered to each consignee, and

7. the date(s) of delivery.

G. The books and records supporting such report shall be kept and preserved for a period of three (3) years, unless their destruction sooner is authorized in writing by the Director of the Department of Revenue.

H. All applicable taxes must be paid to the Department of Revenue (see 235 ILCS 5/8-1 and Section 420.30 of the Revenue Regulations).

I. The Liquor Control Act does not prevent the possession and transportation of alcoholic liquor for the personal use of the possessor, his family and guests.

A. Each adult may receive up to two (2) cases of wine per year. Each case may contain not more than nine (9) liters.

V. Exceptions

There are situations in which the shipping into the State of Illinois of unregistered alcoholic beverages is permissible notwithstanding the above prohibitions and conditions.

A. Test Marketing of product in accordance with TPP-14.

B. Shipment of limited quantities to writers or reviewers in the alcoholic beverage industry, to whom shipments are made for the purpose of consumption, evaluation and critical comment. The quantities allowable are usually one bottle per product type, but in no event should the quantity be sufficient to be considered “re-sellable.”

C. Other situations will be evaluated on a case-by-case submission.

TPP-24 Reserved

TPP-25 Stocking, Rotating And Re-Setting Of Products

I. Purpose

This Policy statement defines procedures regarding manufacturers and distributors stocking, rotating and re-setting their products at retail establishments.

II. Policy

It is the policy of this Commission that manufacturers and distributors may stock and rotate their product at retail establishments as long as such activities are done in conjunction with and incidental to delivery of such product in the normal course of business or at the time of a sales call to the retailer. However, such services must be done voluntarily by the manufacturer, distributor and importing distributor, and may not be required to be performed by the retailer. This policy allows distributors to take part in retailer prompted resets up to four times per year, as long as all distributors are notified of the reset. This policy prohibits manufacturers and distributors from acting as the employee of the retailer, from pricing the retailer’s products and, generally, from handling any other supplier’s products.

III. Background

Pursuant to 235 ILCS 5/6-5, it is illegal “for any person having a retailer’s license or any officer, associate, member, representative or agent of such licensee to accept or receive ... anything...of value...directly or indirectly from any manufacturer, importing distributor or distributor of alcoholic liquor.” Similarly, 235 ILCS 5/6-5 makes it “unlawful for any manufacturer or distributor or importing distributor to give or lend...anything...of value...directly or indirectly to any retail licensee or to the manager, representative, agent, officer or director of such licensee”. Thus, distributors and manufacturers may not give or lend anything of value to retailers, and retailers may not accept or receive anything of value from distributors or manufacturers.

Pursuant to Policy TPP-1, “Of-Value Standards”, this Commission will determinate on a case-by-case basis whether services may be provided by manufacturer and distributors to retailers. Unless such services are specifically allowed under statute, regulation or trade practice policy, services provided by manufacturers, distributors and importing distributors to retailers will be presumed to be in violation of the “of value” provisions of 235 ILCS 5/6-5.

IV. Procedures

This policy defines the limits on what manufacturers and distributors may legally do for retailers and not risk Commission intervention.

A. General

Under no circumstances may manufacturers, distributors and importing distributors affix prices to product on behalf of retailers. They may not clean or dust shelves, coolers, or products which are on display at the retailer’s location. Generally, they may not touch, move, alter, or disturb the product of a competitor.

Employees of manufacturers, distributors and importing distributors may not be treated as employees of retailers, nor may they work free of charge to the retailer.

B. Stocking

At their discretion, manufacturers, distributors and importing distributors may stock only their own products at a retail establishment. This shall be done during the course of the regular sales call or delivery to the retailer, however, such services must be done voluntarily by the manufacturer, distributor and importing distributor, and may not be required to be performed by the retailer. Nothing in this Trade Practice Policy shall prohibit the exchange of product that is near the manufacturer’s expiration or ‘code’ date. If stocking is performed with any greater frequency, it will be viewed as more than minimal provision of free labor to the retailer. Stocking is defined as any placing of product where it is to be stored or offered for sale on a retailer’s premises (e.g. on shelves, in coolers, against walls, in displays or in storage areas). Manufacturers, distributors and importing distributors may place product at any of the aforementioned locations on the theory that stocking is a service incidental to a sales call or a delivery in the ordinary course of business.

However, with respect to special promotions and displays constructed in connection therewith, manufacturers, distributors and importing distributors may assemble or construct displays for retailers, may place or position the display at the retail premises, and may stock or replenish the display at any time during the course of the special promotion. In this circumstance there is no “normal sales call or delivery” limitation as it is often necessary to perform such service on a daily basis.

C. Rotation

At their discretion, manufacturers, distributors and importing distributors may rotate only their own products at a retail establishment, during the normal course of a sales call or a delivery. In the beer industry this practice is required to ensure compliance with freshness dates. However, such services must be done voluntarily by the distributor, and may not be required to be performed by the retailer. This shall be done during the normal course of a sales call or a delivery, and if done with any greater frequency, it will be viewed as more than minimal provision of free labor to the retailer. Rotation shall include the moving of newer, fresher product from a storage area to an area where it is offered for sale. Permissible rotation also includes the moving of older product to the front of a point-of-sale location and replenishing of the location with fresh product. Rotation may be performed at any location in the retail premises. Manufacturers, distributors and importing distributors may rotate product on the theory that such rotation is a service incidental to the sales call or delivery of product in the ordinary course of business. However, with respect to special promotions and displays constructed in connection therewith, manufacturers and distributors may assemble or construct the display for retailers, may place or position the display at the retail premises, and may stock or replenish the display at any time. In this circumstance there is no “normal sales call or delivery” limitation as it is often necessary to perform such service on a daily basis. Note that the cost of the display must be in compliance with the dollar limitation provisions of 235 ILCS 5/6-6.

D. Resetting

Manufacturers, distributors and importing distributors are permitted to participate in resets conducted at retail establishments no more than four (4) times per calendar year per licensed premises. Resets called by retailers more often than four (4) times a year will be considered to be an unfair burden on the provider of the goods to the retailers.

Whether initiated by the manufacturer, distributor, importing distributor or retailer, where a reset is called it shall be the duty of the retailer to notify in writing all affected manufacturers, distributors and importing distributors of the reset no less than two (2) weeks prior to the date scheduled for the reset. The retailer must make all reasonable efforts to schedule the reset for a time most convenient for the majority of manufacturers, distributors and importing distributors involved. During the reset, participants are limited to the movement of their own goods only, unless another supplier which has been properly notified is not attending. In such case, the participants may assist the retailer in moving the goods of the non-attending supplier. The point is that the retailer can reset the product, on his own, whenever he wants, and a distributor can reset its product so long as it does not touch a competitor’s.

Manufacturers, distributors and importing distributors may provide diagrams to retailers, which suggest the most beneficial location within the store for the presentation and sale of product to the consumer. If the retailer decides to follow the location suggestion, manufacturers, distributors and importing distributors may reset only their product within the store in accordance with the diagrams, or any modifications thereof, and a formal reset date in not required to be arranged. However, in this circumstance, the party performing the reset may move only its product.

TPP-26 Transfer Of Alcohol

I. Purpose

It is policy to establish guidelines in determining when a licensed Illinois retailer may transfer alcohol from its premises to that of another premises or retailer.

II. Policy

It is the policy of the Illinois Liquor Control Commission (ILCC) to allow a transfer of alcohol from one retail premises to another retail premises only in exceptional situations.

III. Background

Section 100.250 of the Rules and Regulations of the ILCC prohibits a retail licensee to transfer alcohol off its licensed premises to another retail licensed premises. However, the ILCC believes that a licensee may transfer alcohol in certain situations. These situations relate to business transactions which occur outside the ordinary course of a licensee’s business.

Section 100.250 Transfer of Alcohol

The holder of a retail license for the privilege of selling alcoholic liquors at retail on the premises specified in the license, for use or consumption, is hereby restricted to such sale from the licensed premises only and is not permitted to sell to, purchase from or transfer such alcoholic liquor to any other retail licensee or licensed premises. This Section does not apply to transactions not in the ordinary course of business, such as a business closure, if prior approval is given by the Commission. (Source: Amended at 23 Ill. Reg. 3787, effective March 15, 1999)

IV. Procedures

A. Permissible transfers include the following:

1. the licensee either sells or closes his or her business and wishes to transfer any remaining liquor inventory; or

2. miscellaneous circumstances in which a transfer is authorized by the ILCC.

B. Before a licensee may enter into a permissible transfer, the licensee must inform the ILCC in writing of the following:

1. the seller’s licensed premises location;

2. the seller’s license number;

3. the buyer’s licensed premises location;

4. the buyer’s license number; and

5. the inventory being purchased, including type of liquor and quantity of items.

C. All transfers must be approved by the Executive Director or appropriate designee.

D. The buyer must keep a copy of the written document sent to the ILCC on his or her licensed premises in order to show where the liquor was purchased.

E. The buyer must keep a copy of the written document sent to the ILCC on his or her licensed premises for a period of ninety (90) days.

V. Other

Approval of “alternate delivery sites” for retail licensees

The question of the power of the Commission to approve alternate delivery sites for retail licensees must be answered by reference to the Liquor Control Act, Rules and Regulations, and then the Commission’s inherent power to manage an orderly system of alcoholic beverage manufacture, delivery and sale. This issue was raised legislatively with H.B.137, introduced 1/12/99, which sought to amend the Liquor Control Act to provide for minimum delivery intervals and purchase amounts, and to establish “alternative delivery” sites.

The bill, as originally presented, contained the following language:

“If a retailer does not wish to accept delivery at its retail establishment, the retailer may designate an alternate site within the distributor’s geographic area to which the distributor must make delivery if that site has been approved in advance by the State Commission.”

Senate Amendment No. 1. deleted the above provision authorizing a retailer to designate an alternative delivery site and substituted the county-based system which ultimately became law.

The law as passed and signed by the Governor failed to contain any reference to the “alternate delivery site.”

Since it is for the legislature and the courts to state the public policy of the State of Illinois, the public policy in the area of “alternative delivery sites” is that they are not allowed. It is neither within the designated, or inherent, powers of the Liquor Control Commission to set public policy. Since an administrative agency is a creature of statute, any power or authority claimed by the agency must find its source within the provisions of the statute by which it is created. Granite City Division of National Steel Co. v. Illinois Pollution Control Board, 155 Ill. 2d 149, 171, 613 N.E.2d 719, 729 (1993). Agency interpretations of statutes are not binding on the courts, and we must overturn any agency action that is inconsistent with the statute. Carson Pirie Scott & Co. v. State of Illinois Department of Employment Security, 131 Ill. 2d 23, 34, 544 N.E.2d 772, 777 (1989).

The fundamental principle of statutory construction is to ascertain and give effect to the intent of the legislature. Bowne of Chicago, Inc. v. Human Rights Comm'n, 301 Ill. App. 3d 116, 119, 703 N.E.2d 443, 446 (1998). The most reliable indicator of legislative intent is the statute's language, which must be given its plain and ordinary meaning. Boaden v. Department of Law Enforcement, 171 Ill. 2d 230, 237, 664 N.E.2d 61, 65 (1996).

In Gilchrist v. Human Rights Commission, No. 1‑99‑1054, 1st District, March 27, 2000, the Appellate Court held that Section 8A‑102 of the Human rights Act did not confer upon the Commission the authority to allow an Administrative Law Judge, other than the presiding ALJ, to author the findings and recommended order merely because the parties agree by stipulation to such action. To the extent that the Commission determined that the parties' agreement alone satisfied the requirements of the statute, that determination was erroneous. An erroneous construction of a statute by an administrative agency is not binding on a reviewing court, and even a reviewing court's deference to administrative expertise does not serve to license a governmental agency to expand the operation of a statute. Boaden, supra.

The Court further held that the Commission exceeded its authority in deciding the case in the manner it did, and therefore the cause was remanded so that the matter may be reset for another full hearing. The Court was not unmindful of the fact that its decision prolonged the ultimate resolution of the Petitioner's case, but, even in instances where an administrative body has discretion in its decision, whenever it must choose between justice and speed, it must pick the side of justice. Six‑Brothers King Drive Supermarket, Inc. v. Department of Revenue, 192 Ill. App. 3d 976, 984, 549 N.E.2d 586, 591 (1989).

TPP-27 Special Event Retailers (Not-For-Profit) License

I. Purpose

To set the policy of the Illinois Liquor Control Commission and establish the procedures whereby Special Event Retailers (Not-For-Profit) shall be licensed and operate within the State.

II. Policy

It is the policy of this Commission that Special Event Retailers shall be licensed and allowed to purchase alcoholic beverages at “special events” in accordance with the applicable provisions of the Illinois Liquor Control Act and Rules and Regulations of this Commission.

III. Statutory And Regulatory Bases

Sec. 1-3.17.1 of the Liquor Control Act (235 ILCS 5/1-3.17.1) defines the “Special Event Retailer” as “an educational, fraternal, political, civic, religious or non-profit organization which sells or offers for sale beer or wine, or both, only for consumption at the location and on the dates designated by a special event retail license.”

Sec. 5-1(e) of the Liquor Control Act (235 ILCS 5/5-1(e)) delineates the permission granted by the “Special Event Retailer’s (Not-For-Profit) license” to “permit the licensee to purchase alcoholic liquors from an Illinois licensed distributor (unless the licensee purchases less than $500 of alcoholic liquors for the special event, in which case the licensee may purchase the alcoholic liquors from a licensed retailer) and shall allow the 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. An applicant for a Special Event Retailer license must also submit with the application proof satisfactory to the State Commission that the applicant will provide dram shop liability insurance in the maximum limits and have local authority approval.”

Regulation 100.330, designated “Advertising” provides:

(a) Pursuant to Sections 6-4, 6-5, and 6-5 of the Act (235 ILCS 5/6-4, 6-5, and 6-6), no retail licensee or entity having more than a 5% interest in a retail licensee shall have any, direct or indirect, interest in or control of any advertising or promotional company which receives funds, directly or indirectly from, or for the account of, any manufacturer, non-resident dealer, broker, distributor, importing distributor or foreign importer of alcoholic beverages; nor shall any manufacturer, non-resident dealer, broker, distributor, importing distributor or foreign importer make any payment, direct or indirect, to any retailer or any other entity which provides advertising, promotional or display services for retailers in consideration of any advertising or promotional efforts of any kind not allowed under the Illinois Liquor Control Act or the rules and regulations of the Commission.

(b) Nothing herein shall prohibit any manufacturer, non-resident dealer, distributor, importing distributor, or foreign importer from sponsoring an event at a venue which sole purpose is to host live entertainment, provided that no indirect or direct payment is made to the retailer and that any reference to the retailer in any advertising is incidental to the event itself.

IV. Additional Terms And Definitions

The following additional terms and definitions shall be applicable to “Special Event Retailers (Not-For-Profit)”:

“Special event” shall mean “an occurrence having the same theme, the duration of which shall not exceed fifteen (15) consecutive calendar days.”

“Theme” shall mean “a recurring, unifying subject or idea,” such as is embodied in the concept of “Friday Night Fish Fry,” “Thursday Night Spaghetti Dinner,” or the like.

V. Procedures For Licensure

A. Secure State of Illinois Special Event Retailer’s Liquor License Application and Application Instructions.

B. If the locality in which the special event is to be held issues a “Local Special Event License,” documents necessary to secure the issuance of such a license prior to presenting the State Application to this Commission must be completed. If the locality does not issue an actual license, determine what method of approval it utilizes and secure such approval; i.e., letter from Local Liquor Commissioner or Commission indicating approval of the event. In the City of Chicago, the completed State Application must be presented to the Mayor’s License Commission which will review same and stamp the State Application with its approval.

C. Secure Dram Shop insurance coverage for the special event, which coverage must be in amounts sufficient to satisfy the Local Liquor Commissioner, and must underwrite the premises upon which the event is to be held and all periods of time encompassing the event.

D. Secure and bring either the documents of incorporation of the applicant, or the letter of exemption from the Illinois Department of Revenue.

E. Bring all items referred to in A. through D. above to the Illinois Liquor Control Commission, with appropriate application fee check(s).

VI. Procedures To Be Followed At The “Special Event”

A. License Posted

All licensees must post the Special Event Retailer (Not-For-Profit) license in plain view at the event.

B. Beer Taps must be Clean and Sanitary

Beer taps must be clean and sanitary. The taps must be inspected to ensure they are clean and sanitary. In cases where the distributor provides the beer taps, the distributor will be responsible for providing clean beer taps.

C. Proper Display of the “Alcohol Pregnancy Warning” Sign

An Alcohol Pregnancy Warning Sign is provided to each licensee. This sign must be posted at all sites where the alcoholic beverages are sold and must be visible to all patrons. It is the duty of the licensee to request more signs as needed.

D. Pre-Mix Alcoholic Beverage Requirements

If the licensee is selling any pre-mixed alcoholic beverages, all containers of the pre-mixed alcoholic beverages must be cleaned weekly and pre-mix destroyed weekly. Containers should be covered to prevent outside contaminates from entering. Note: All alcoholic beverages, except pre-mix, must be kept in their original containers (i.e. bottles).

E. Requirements Prohibiting “Happy Hours” Must Be Followed

The Happy Hour provisions of the Illinois Liquor Control Act (235 ILCS 5/6-28) apply to Special Event Retailers.

F. Schedule of Drink Prices

A schedule of drink prices must be available at the site of the event.

G. Liquor Invoices Available at the Event Premises

The invoices for liquor purchased must be available for inspection at the site of the event, not at the office or any other location. All purchases of alcoholic liquor may be made from a licensed distributor, except that purchases of up to $500 can be made from licensed retailers.

H. Uphold Minimum Age Law

It is a criminal offense to serve or sell alcoholic beverages to anyone under the age of 21 years. It is also against the law for a person under 21 years of age to purchase and consume alcoholic beverages. The licensee must take steps to prevent the illegal sale of alcohol to persons under 21 years of age. Preventative measures include, but are not limited to, the checking of all identification for age, identity and authenticity, and the posting of warning signs for minors (included in the information package given to each approved Special Event license. Please note that local laws may establish a minimum age to sell or serve alcoholic beverages. The licensee may find out about local restriction by contacting the local authorities where the event is to be held.

I. Prohibited service or sale to an intoxicated person. It is against the law to serve or sell an intoxicated person alcoholic beverages

TPP-28 Employment/Ownership Arrangements Between Classes Of Licensees

I. Purpose

This policy defines two issues:

A. whether employees of one class of license (manufacturer, distributor and retailer) may work for another class of license (e.g. distributor’s employees working for a retail licensee), and

B. whether a person may own interest in different classes of licensees.

II. Policy

It is the policy of the Illinois Liquor Control Commission (ILCC) to prevent any employment or ownership arrangements between different classes of licensees which violate the “of value” provisions of 235 ILCS 5/6-5.

III. Background

The applicable statutes are 235 ILCS 5/6-4, which prohibits certain transactions and interests between different classes of licensees, and 235 ILCS 5/6-5, which prohibits the giving away “of value.”

IV. Procedure

A. Employment Arrangements

Employees of one class of licensee may not work for another class of licensee. For instance, a distributor’s employee may not work for a retail licensee.

Secs. 5/6-4 clearly prohibits relations where an officer, associate, member, partner, representative, employee, agent or shareholder owning more than 5% of the outstanding shares seeks a license, or to be affiliated with a licensee on another tier.

But actually the inquiry depends on the status and duties of the employee. While an owner, shareholder, manager, etc., on one tier can't be employed on another tier, an hourly employee for one tier may be employed as an hourly employee on another.

Again, allowance of such employment relations is dealt with on a case-by-case basis.

B. Ownership Arrangements

1. GENERAL RULE - No distiller or wine manufacturer (or any affiliate, agent or shareholder owning more than 5% interest) may be licensed as a distributor or a retailer. No distributor or retailer (or any affiliate, agent or shareholder owning more than 5% interest) may be licensed as a distiller or wine manufacturer (235 ILCS 5/6-4(a)).

2. EXCEPTIONS

a. Beer Distributor exception. A distributor, which on January 1, 1985, was owned by a brewer (or any affiliate, agent or shareholder owning more than 5% interest) may own or acquire an ownership interest of more than 5% in a wine manufacturer and be issued a wine manufacturer’s license (235 ILCS 5/6-4(a)).

b. Grandfather Clause exception. There is a grandfather clause for certain entities licensed prior to June 30, 1947. See 235 ILCS 5.6-4(b)(c)&(d).

c. Brew Pub Exception. A brewer may receive one retailer’s license for the premises in which he actually conducts the manufacturing business. Such retailer’s license shall permit the sale of beer only on such premises.

TPP-29 Retailers Making Excessive Purchases

I. Purpose

This policy defines the procedures to be followed when a retailer makes excessive purchases of alcohol from a wholesaler for purposes of resale.

II. Policy

It is the policy of the Illinois Liquor Control Commission (ILCC) to prevent a retailer from purchasing more alcoholic liquor than it can possibly sell for use or consumption.

III. Background

According to 235 ILCS 5/5-1(d), a retailer's license allows the licensee to sell or offer for sale alcoholic liquor only for use or consumption and not for resale in any form. The retailer may warehouse liquor. Thus, when a retailer purchases excessive amounts of alcoholic liquor, ~~more than it could hope to sell to consumers for use and consumption, the logical conclusion is that the retailer hopes to sell or offer to sell alcoholic liquor for resale~~ the presumption may arise that the retailer intends to sell or offer for sale alcoholic liquor for resale.

Regulation 100.30 provides that no licensee shall violate any federal, state, or Illinois law. The violation of any such law is sufficient cause for revocation or suspension of any licensed issued by the ILCC.

IV. Procedure

A. When a distributor reasonably believes a retailer is making excessive purchases in accordance with this policy, the distributor shall immediately notify the Commission. The distributor shall continue to supply products to the retailer until such time as he is notified by the ILCC that the retailer’s actions were in violation of law. In the event it is preliminarily determined by the ILCC that a violation occurred, the retailer and distributor will be notified and the matter shall proceed through the normal disciplinary channels.

B. The distributor may make his own independent determination of this situation by examining the retailer's previous purchase patterns for a particular product and comparing them with current behavior. The distributor shall not unilaterally cease to supply products to the retailer, but shall do so only on direction from the ILCC.

C. The distributor must notify the ILCC immediately of such practice.

D Failure to do so could subject the distributor's license to suspension or revocation pursuant to Regulation 100.30.

TPP-30 Salvaged Alcoholic Liquors

I. Purpose

This policy establishes guidelines for the sale of salvaged alcoholic liquors which have been damaged as a result of flood, wreck, fire or similar occurrence.

II. Policy

It is the policy of the Illinois Liquor Control Commission (ILCC) to allow the resale of salvaged alcohol by an insurance company, a common carrier, or the duly authorized representative of either, after a determination has been made that proper procedures and safeguards have been followed and approval and release by the Commission.

III. Background

The power to regulate distressed merchandise is given to the Commission under Sec. 5/3-12 of the Liquor Control Act, “Powers and duties of Commission”:

(a) The State Commission shall have the following powers, functions and duties:

(10) To adopt such rules and regulations consistent with the provisions of this Act which shall be necessary for the control, sale or disposition of alcoholic liquor damaged as a result of an accident, wreck, flood, fire or other similar occurrence.

The power given in Sec. 5/3-12 is implemented through the Rules and Regulations of the Commission:

Section 100.150 of the ILCC Rules and Regulations (Regulations) which provides:

a) Insurance companies or their duly authorized representatives may take possession of alcoholic beverages insured by such companies and damaged as a result of flood, wreck, fire or similar occurrence, for which insurance was provided.

b) Common carriers or their duly authorized representatives may take possession of alcoholic beverages transported by such carrier and damaged in transit.

c) Alcoholic beverages salvaged as in paragraphs (a) and (b) may be sold to retail licensees provided the conditions enumerated below shall have been complied with. Alcoholic beverages so salvaged shall be referred to as "distressed merchandise.”

d) Each container of alcoholic beverages sold pursuant to this rule shall be labeled to identify such goods as distressed merchandise. The letters on the label shall be no smaller than pica type, bold faced, not less than 12 point. The label shall be no less than two inches long and one inch wide, and shall be affixed diagonally over the regular label on each container prior to delivery to any retail licensee. The label once applied shall not be capable of removal without damaging the said label or causing damage to the underlying product label. The following statement shall be printed on the label: "The alcoholic beverages contained herein have been designated distressed merchandise by the Illinois Liquor Control Commission. This container has been salvaged from a fire, flood, wreck or similar catastrophe. This label is not affixed by the manufacturer. Do not remove this label."

e) Any insurance company, common carrier or representative of either, seeking to sell distressed merchandise shall first obtain a distributor's license from the Illinois Liquor Control Commission. The application shall provide, "The applicant seeks to sell distressed merchandise in Illinois." Retailer's licenses may also be applied for, if the insurance company, common carrier or representative of either seeks to sell alcoholic liquors to consumers in Illinois.

f) Alcoholic beverages so salvaged outside of Illinois may not be imported into Illinois for purposes of sale pursuant to this rule. Prior to release of distressed merchandise for sale in Illinois, an affidavit by the insurance company's or common carrier's authorized representative must be presented to the Commission stating first-hand knowledge that the distressed merchandise was salvaged from a fire, flood, wreck or similar catastrophe which occurred within the State of Illinois, stating with particularity the time, place and nature of the occurrence, and a complete inventory of the items so salvaged as the quantity, brand names and container sizes.

g) In the event the tax provided under Sections 8-1 through 8-14 of the Act [235 ILCS 5/8-1

through 8-14] is unpaid on the distressed merchandise, the applicant shall make payment of the tax on such merchandise to the Department of Revenue, and evidence of payment must be presented to the Commission prior to release of such distressed merchandise for sale in Illinois.

h) It shall also indicate on its letter of application to sell such distressed merchandise in Illinois, whether the sale shall be by auction or to a designated licensee. If the sale shall be by auction, the time and place of the auction and the name of the auctioneer or other person authorized to sell such distressed merchandise shall be listed. If the sale is to be made directly to a given licensee or licensees, the name and address of the licensee or licensees, together with the current State retail liquor license number of such licensee or licensees shall be listed. No sale may be made by auction to any person, firm or corporation not licensed under the provisions of the Act.

i) Written approval and release for sale made hereunder must first be obtained from the Commission. Approval and release as aforesaid shall not be issued until a physical

inspection has been made of the merchandise by an authorized representative of the Commission in order to determine that compliance has been had with the provisions of this Rule. After any sale of distressed merchandise shall have been completed, the insurance company, common carrier or their representative shall report in writing to the Commission the name of the licensee or licensees who have purchased the distressed merchandise, the quantities and brand names of such distressed merchandise.

j) In the event that the insurance company, common carrier by this sale, disposed of less than the entire inventory of distressed merchandise, the written report shall list the remaining inventory, indicating the quantity, container sizes and brand names, the place where such inventory is stored, and the person in control of possession of such inventory.

k) No distressed merchandise shall be sold in Illinois where the original packages shall have been so damaged as to render the label thereon illegible, or when the substantive labeling requirements under Section 6-7 of the Act [235 ILCS 5/6-7] and under Section 100.70 are not complied with as a result of the damage to the container. (Source: Amended at 18 Ill. Reg. 4811, effective March 9, 1994)

The Attorney General of the State of Illinois in Opinion No. 26, dated November 16, 1956, states that: (a) Section 7a of Article VI of the Liquor Control Act (“Warehouses”) is not applicable to a salvage company serving numerous insurance companies; and (b) brand names or trade marked liquor which shall become the property of an insurance company as a result of salvage and which is turned over to a salvage company for distribution does not create an ownership interest in the trade mark or brand name in a salvage company which would require registration with the Illinois Liquor Control Commission under Sec. 5/6-9 of the Liquor Control Act, and also require the designation of the geographical area in which salvage company has been granted a right of resale.

And, finally, the Beer Industry Fair Dealing Act (815 ILCS 720/1, et seq. ) provides in Sec. 5. “Prohibited conduct,” that “No brewer shall: (7) Require a wholesaler to assent to any requirement prohibiting the wholesaler from disposing, after notice to the brewer, of a product which has been deemed salvageable by a local or State health authority. Nothing herein shall prohibit the brewer from having the first right to purchase the salvageable product from the wholesaler at a price not to exceed the original cost of the product or to subsequently repurchase the product from the insurance company or salvage company.”

This granting to a brewery the first option to repurchase salvageable products is a self-executing, contractual provision.

IV. Procedures

A. Who May Salvage

Only persons who are authorized by statute or rule shall be allowed to salvage and conduct sales of distressed alcoholic liquors, namely:

1. Insurance companies or their duly authorized representatives may take possession of alcoholic beverages insured by such companies and damaged as a result of flood, wreck, fire or similar occurrence, for which insurance was provided.

2. Common carriers or their duly authorized representatives may take possession of alcoholic beverages transported by such carrier and damaged in transit.

B. Request for Approval and Release

The process of securing approval and release shall begin with written notification sent or delivered to the Commission Investigations Division. Such notification shall include the following information:

1. Name, address and professional capacity of the person, firm or representative making the request.

2. The date, time and place of the casualty which has resulted in the distressed merchandise.

3.. A complete inventory of all distressed merchandise, including the quantity, brand names and container sizes.

4. A statement of the place and date after the distressed merchandise may be inspected by an agent of the Commission.

C. Inspection and Cleaning of the Distressed Merchandise

Permission is granted with the understanding that each container was cleaned and then affixed with a salvage label appropriately placed in an irregular position so that it can be easily determined that the product is not of first quality.

D. Labeling

1. Each container (can, bottle, or other original package as defined in the Liquor Control Act) of alcoholic beverage to be sold shall be labeled to identify such goods as distressed merchandise.

2. The letters on the label shall be no smaller than 12 point and shall be bold faced.

3. The label shall be no less than two inches long and one inch wide, and shall be affixed diagonally over the regular label on each container prior to delivery to any retail licensee.

4. The label shall read:

THE ALCOHOLIC BEVERAGES CONTAINED HEREIN HAVE BEEN DESIGNATED DISTRESSED MERCHANDISE BY THE ILLINOIS LIQUOR CONTROL COMMISSION. THIS CONTAINER HAS BEEN SALVAGED FROM A FIRE, FLOOD, WRECK OR SIMILAR CATASTROPHE. THIS LABEL IS NOT AFFIXED BY THE MANUFACTURER. DO NOT REMOVE THIS LABEL.

E. Licensing Procedure

1. An insurance company, common carrier or their representative, seeking to sell distressed merchandise to retail licensees shall first obtain a distributor's license from the Commission.

2. An insurance company, common carrier, or their representative, seeking to sell distressed merchandise to consumers in Illinois, shall first obtain a retailer's license from the Commission.

3. Application filed with the Commission shall provide that, "the applicant seeks to sell distressed merchandise in Illinois."

4. An affidavit executed by an agent or employee of the insurance company, common carrier, or representative, with first hand knowledge of the content of the affidavit, must be accompany the license application, and shall contain the following:

a. that the distressed merchandise was salvaged from a fire, flood, wreck or similar catastrophe which occurred within the State of Illinois;

b. the time, place and nature of the occurrence;

c. a complete inventory of the items so salvaged, including the quantity, brand names and container sizes.

d. indicate whether the sale shall be by public auction or private sale to a designated licensee.

(1) if the sale shall be by auction, the time and place of the auction and the name of the auctioneer or other person authorized to sell such alcohol shall be listed.

(2) if the sale is private, the date of the sale, the name and address of the purchases, and if a retail liquor licensee, the current State retail liquor license number, shall be listed.

5. Written approval and release for sale must be obtained from the Commission prior to sale. Before such approval and release shall be given, an authorized agent of the Commission will conduct a physical inspection of the salvaged alcoholic beverages.

6. No sale may be made by auction to any person, firm or corporation not licensed under the provisions of the Act.

F. Written Report after Sale

1. After any sale of salvaged alcoholic beverages, the insurance company, common carrier, or representative shall report in writing to the ILCC:

a. the name and address of any licensee, and/or any consumer, who made purchases.

b. quantity, brand names and container sizes purchased.

2. In the event that the insurance company, common carrier, or representative has disposed of less than the entire inventory of salvaged alcoholic beverages, the written report shall list:

a. the remaining inventory, indicating the quantity, brand names and container sizes which remain.

b. the place where such inventory is stored, and

c. the name and address of the person in possession or custody of such remaining inventory.

G. Taxes

In the event the tax provided under Sections 8-1 through 8-14 of the Act [235 ILCS 5/8-1 through 8-14] is unpaid on the distressed merchandise, the applicant shall make payment of the tax on such merchandise to the Department of Revenue, and evidence of payment must be presented to the Commission prior to release of such distressed merchandise for sale in Illinois.

H. Prohibited Sales

1. No alcoholic beverages which has been salvaged outside the State of Illinois may be imported into this state for the purpose of sale of salvaged alcohol.

2. No salvaged alcoholic beverages may be sold if the original packages has been damaged so as to render the label illegible, or where the substantive labeling requirements under 235 ILCS 5/6-7 and Section 100.70 of the Regulations are not complied with ~~as a result of the damage to the container~~.

I. Format of Approval and Release

(Date)

(Insurance companies, common carrier or their duly authorized representatives)

(Address)

Dear (name):

The Commission has completed its inspection of the following lot(s) of distressed alcoholic beverages as requested, and those products may be sold or disposed of as salvaged merchandise.

(Identify Lot(s), identify address where lot is located)

If the sale is to be made to a retail licensee or licensees, the licensee’s name, address, and current state retail liquor license number shall be provided to the Commission with the total inventory of products so sold. If the sale is by auction, the time, place, and the name of the auctioneer or other person authorized to sell such distressed merchandise shall be submitted to the Commission.

Reports of sale shall be filed with the Commission within a reasonable period of time after the sale. Reports of distressed merchandise not sold shall likewise be filed with the Commission which report shall contain a full inventory of the remaining merchandise, indicating the quantity, brand names and container sizes which remain; the place where such inventory is stored; and the name and address of the person in possession or custody of such remaining inventory.

Sincerely,

TPP-31 Electronic Data Interchanges And Fund Transfers

I. Purpose

To set the procedures of the Illinois Liquor Control Commission whereby product information, pricing, promotions, purchasing, invoicing, and sales data information may be maintained via electronic data interchanges (EDI) and the payment of invoices for alcoholic liquors may be made by electronic fund transfers (EFT).

II. Policy Statement

It is the policy of this Commission that the product information, pricing, promotions, purchasing, invoicing, and sales data information may be maintained via electronic data interchanges (EDI) and the payment of invoices for alcoholic liquors may be made by electronic fund transfers (EFT).

III. Background

The Illinois Liquor Control Act presently provides for the maintenance of business records via an electronic medium, 235 ILCS 5/6-10, and the Rules of the Commission, 100.240, recognize the electronic payment of invoices, as a “cash” transaction. [Section 100.240 Transactions Involving Use of Checks and Their Equivalent (Source: Repealed at 23 Ill. Reg. 3787, effective March 15, 1999); Subsection (c) was transferred to Section 100.90(k).]

Further, prudent business practice dictates that the implementation and expansion of electronic data interchanges can facilitate communication and reduce delays.

IV. Procedures

The following procedures shall be applicable to the use of EDI systems in the alcoholic beverage industry:

1. The use of the system must be available, but cannot be mandated as a requirement for conducting business, to all wholesalers and retailers.

2. The use of a specific Value Added Network (VAN) cannot be mandated; all users of the system must be allowed to transmit information through any VAN.

3. The users of the system must continue to maintain all required records of alcoholic beverage purchases and sales.

4. The Commission shall have access, upon reasonable notice, to the systems for the purpose of inspection and review.

The use of electronic fund transfers (EFT) shall be allowed so long as the transfer of funds is initiated by an irrevocable payment order on or before delivery of the alcoholic liquor, which is supported by appropriate documentation.

TPP-32 Breakage; Replacement Of Damaged Or Defective Products

I. Purpose

To set the policy of the ILCC and establish the procedures by which distributors may replace damaged or defective product for a retailer.

II. Policy

It is the policy of the ILCC that unless there is a bona fide business reason for replacement of damaged or defective product when delivered, the product may not be replaced free of charge to the retailer. The Commission follows the federal guidelines on acceptable reasons for replacement.

If the product is damaged while in the retailer’s possession in most instances it will be considered to be something “of value” and a violation of Sections 5/6-4, 5/6-5 and 5/6-6 for the distributor when replacing the product without charge.

III. Background

The provisions of Section 5(d) of the Federal Alcohol Administration Act and Sections 11.31 through 11.39, 11.45 and 11.46 of the Federal Alcohol Administration Act Regulations prohibit the sale of alcoholic liquor products with the privilege of return for any reason other than for ordinary and customary commercial reasons.

The provisions of the federal regulations permitting alcoholic liquor to be exchanged and returned for ordinary and usual commercial reasons are as follows:

Subpart D‑‑Rules for the Return of Distilled Spirits, Wine, and Malt Beverages

Sec. 11.31 General. When a producer or importer discontinues the production or importation of a product, a trade buyer's invento(a) Section 5(d) of the Act provides, in part, that it is unlawful to sell, offer to sell, or contract to sell products with the privilege of return for any reason, other than those considered to be “ordinary and usual commercial reasons” arising after the product has been sold. Sections 11.32 through 11.39 specify what are considered “ordinary and usual commercial reasons” for the return of products, and outline the conditions and limitations for such returns.

(b) An industry member is under no obligation to accept the return of products for the reasons listed in Secs. 11.32 through 11.39.Exchanges and Returns for Ordinary and Usual Commercial Reasons

Sec. 11.32 Defective products. Products which are unmarketable because of product deterioration, leaking containers, damaged labels or missing or mutilated tamper evident closures may be exchanged for an equal quantity of identical products or may be returned for cash or credit against outstanding indebtedness.

Sec. 11.33 Error in products delivered. Any discrepancy between products ordered and products delivered may be corrected, within a reasonable period after delivery, by exchange of the products delivered for those which were ordered, or by a return for cash or credit against outstanding indebtedness.

Sec. 11.34 Products which may no longer be lawfully sold.

Products which may no longer be lawfully sold may be returned for cash or credit against outstanding indebtedness. This would include situations where, due to a change in regulation or administrative procedure over which the trade buyer or an affiliate of the trade buyer has no control, a particular size or brand is no longer permitted to be sold.

Sec. 11.35 Termination of business. Products on hand at the time a trade buyer terminates operations may be returned for cash or credit against outstanding indebtedness. This does not include a temporary seasonal shutdown (see Sec. 11.39).

Sec. 11.36 Termination of franchise.

When an industry member has sold products for cash or credit to one of its wholesalers and the distributorship arrangement is subsequently terminated, stocks of the product on hand may be returned for cash or credit against outstanding indebtedness.

Sec. 11.37 Change in product.

A trade buyer's inventory of a product which has been changed in formula, proof, label or container (subject to Sec. 11.46) may be exchanged for equal quantities of the new version of that product.

Sec. 11.38 Discontinued products.

ry of that product may be returned for cash or credit against outstanding indebtedness.

Sec. 11.39 Seasonal dealers.

Industry members may accept the return of products from retail dealers who are only open a portion of the year, if the products are likely to spoil during the off season. These returns will be for cash or for credit against outstanding indebtedness.

Exchanges and Returns for Reasons Not Considered Ordinary and Usual

Sec. 11.45 Overstocked and slow‑moving products.

The return or exchange of a product because it is overstocked or slow‑moving does not constitute a return for “ordinary and usual commercial reasons.”

Sec. 11.46 Seasonal products.

The return or exchange of products for which there is only a limited or seasonal demand, such as holiday decanters and certain distinctive bottles, does not constitute a return for “ordinary and usual commercial reasons.”

IV. Procedures

A. Distributors may not accept the return of alcoholic liquor products as “breakage” if the product was damaged after delivery and while in the possession of the retailer. The distributor may replace damaged cartons or packaging at any time.

B. Under no circumstances may product or other compensation be furnished to a retailer for product breakage which occurs as a result of handling by the retailer, its agents, employees, or its customers.

C. If the product has been damaged prior to or at the time of actual delivery, the product may only be exchanged for an equal quantity of identical product or returned for case or credit. If identical product is unavailable, the exchange will be permissible for similar type product.

D. If the product has been damaged prior to or at the time of actual delivery, the product may only be exchanged within a reasonable time after delivery. It is the Commission’s position that fifteen (15) days is a reasonable time, from the date of delivery, within which such time the retailer shall notify the distributor of the damage and request the return of the product.

E. A distributor is under no obligation to accept a return or make an exchange for any product. A distributor who elects to make an exchange of product or return of product for case or credit in accordance with the policy does so at its sole discretion.

F. Nothing in this Trade Practice Policy shall prohibit the exchange of product that is near the manufacturer’s expiration or ‘code’ date.

TPP-33 Brew On Premises

I. Purpose

The purpose of this policy is to set the procedures whereby a person may be licensed to operate within the State of Illinois, to provide to individuals over the age of 21 years, for a fee, the facilities, equipment, component grains and hops, ingredients, water, instruction, reference materials, and other products and services necessary to brew, ferment or bottle beer upon his premises, for personal use and consumption by the person(s) performing the brewing tasks, and not for re-sale.

II. Policy

It is the policy of this Commission to allow person(s) to be licensed to operate within the State of Illinois, to provide for a fee, the facilities, equipment, component grains and hops, water, instruction, reference materials, and other products and services necessary to brew beer upon its premises, for consumption off the premises by the person(s) performing the brewing tasks.

III. Background

Section 5/2-1 of the Liquor Control Act (235 ILCS 5/2-1), entitled “Scope of Act” provides in relevant part:

“No person shall manufacture, bottle, blend, sell, barter, transport, deliver, furnish or possess any alcoholic liquor for beverage purposes, except as specifically provided in this Act, provided, however, nothing herein contained shall prevent the possession and transportation of alcoholic liquor for the personal use of the possessor, his family and guests, nor prevent the making of wine, cider or other alcoholic liquor by a person from fruits, vegetables or grains, or the products thereof, by simple fermentation and without distillation, if it is made solely for the use of the maker, his family and his guests; . . .”

Federal law allows the production of one hundred (100) gallons of beer per person, per household, per year, to a maximum of two hundred (200) gallons if the household had two or more adults, without payment of federal taxes.

IV. Procedures

A. Brew On Premises as a Business

Individuals wishing to conduct a business which shall provide to individuals over the age of 21 years, for a fee, the facilities, equipment, component grains and hops, ingredients, water, instruction, reference materials, and other products and services necessary to brew, ferment or bottle beer upon his premises, for personal use and consumption by the person(s) performing the brewing tasks, and not for re-sale shall comply with the following:

1. Secure a local retail liquor license, the type to be determined by local ordinance.

2. Secure a State retail liquor license.

3. Possess no manufacturer, distributor or importing distributor license

4. Allow no employee, agent or servant to manufacturer beer.

5. Neither sell nor allow sales on premises of the beer manufacture thereon.

6. Allow no consumption of beer or other alcoholic products on the premises.

II. Policy

It is the policy of the ILCC that indirectly furnishing, giving, renting, lending or selling of equipment

, fixtures, signs, supplies, money, services, including but not limited to display and pricing services or other things “of value” by a manufacturer, distributor and importing distributor to a third party, where the resulting benefits from such indirect thing “of value” flow to retailers, is the furnishing of things “of value” in violation of Sections 5/6-5, 5/6-5 and 5/6-6 of the Illinois Liquor Control Act (235 ILCS 5/6-4, 5.6-5, 5/6-6).

III. Background

Sections 5/6-5, 5/6-5 and 5/6-6 of the Illinois Liquor Control Act (235 ILCS 5/6-4, 5.6-5, 5/6-6) prohibit the furnishing, directly or indirectly, of things “of value” by manufacturers, distributors and importing distributors to retailers, and the reciprocal receiving of such things “of value” by retailers from manufacturers, distributors and importing distributors. Trade Practice Policy No. 1 (TPP-1) is incorporated by reference as though fully set forth herein.

IV. Exceptions

A. An indirect furnishing of things “of value” will not arise with respect to advertising as provided in Section 100.330 of the Rules of the Commission and furnished in accordance with Trade Practice Policy concerning “Sponsorship of Events at Retail Premises (TPP-3).

B. Nothing herein shall prohibit manufacturers, distributors and importing distributors from selling alcoholic beverages through the use of quantity or promotional price discounts.

C. Nothing herein shall prohibit third party arrangements, if the holder of the license is a public body.

D. Nothing herein shall prohibit third party arrangements for the benefit of special events, provided a special event retailer license has been issued by the Commission.

TPP-35 Original Package; Refilling

I. Purpose

The purpose of this policy is to set the definition of “original package” and procedures licensees may refill those original packages.

II. Background

Two sections of the Liquor Control Act must be examined, namely:

A. What is an original package?

5/1-3.06. Original Package

"Original package" means any bottle, flask, jug, can, cask, barrel, keg, hogshead or other receptacle or container, whatsoever, used, corked or capped, sealed and labeled by the manufacturer of alcoholic liquor, to contain and to convey any alcoholic liquor.

5/6-22. Refilling Original Packages – Retail Sales from Original Packages

No person except a manufacturer or distributor, or importing distributor, shall fill or refill, in whole or in part, any original package of alcoholic liquor with the same or any other kind or quality of alcoholic liquor, and it shall be unlawful for any person to have in his possession for sale at retail any bottles, casks or other containers containing alcoholic liquor, except in original

packages. (Source: P.A. 82‑783) (from Ch. 43, par. 137)

Sec. 1-3.06 indicates that the package is the vessel into which the alcoholic liquor is put by the manufacturer, or other, which is then sealed and labeled.

For purposes of considering what is the original package, we can also look to the guidelines of the Bureau of Alcohol, Tobacco and Firearms. The Application for and Certification/Exemption of Label/Bottle Approval form which is required for all alcoholic products sold in the United States makes reference to the Brand, Class and Type, and Net Contents, and requires the affixing of a complete product label. It appears settled that the vessel with approved label constitutes the “original package” for all purposes.

Neither the shipping container (such as flats for beer) nor cardboard cases (such as for distilled spirits and wine) nor the printed packaging (such as the open six-pack or the 12- or 24-pack) are original packages for any purpose herein.

Predicated upon the foregoing, it is the bottle, can, etc., into which the alcoholic liquor is put by the manufacturer, and not the packaging associated with the vessels.

B. Who may refill an original package?

The following statutory and rules sections are applicable:

5/1-3.06. Original Package

5/1-3.07. Distiller

"Distiller" means a person who distills, ferments, brews, makes, mixes, concocts, processes, blends, bottles or fills an original package with any alcoholic liquor.

The above definition for a distiller includes a manufacturer of wine, but does not include a manufacturer of beer or bottler of wine. (Source: P.A. 82‑783) (from Ch. 43, par. 95.07)

5/1-3.08. Manufacturer

"Manufacturer" means every brewer, fermenter, distiller, rectifier, wine maker, blender, processor, bottler or person who fills or refills an original package, whether for himself or for another, and others engaged in brewing, fermenting, distilling, rectifying or bottling alcoholic liquors as above defined. (Source: P.A. 82‑783) (from Ch. 43, par. 95.08)

5/1-3.13. Manufacture

"Manufacture" means to distill, rectify, ferment, brew, make, mix, concoct, process, blend, bottle or fill an original package with an alcoholic liquor, whether for oneself or for another, and includes blending but does not include the mixing or other preparation of drinks for serving by those persons authorized and permitted in this Act to serve drinks for consumption on the premises where sold. All containers or packages of blended alcoholic liquors shall have affixed thereto a label setting forth and stating clearly the names of all ingredients which the blended alcoholic liquors offered for sale shall contain. (Source: P.A. 82‑783) (from Ch. 43, par. 95.13)

5/1-3.14. Rectifier

"Rectifier," means any person who rectifies, ferments, brews, makes, mixes, concocts, processes, blends, bottles or fills an original package with any alcoholic liquor, other than by original or continuous distillation. (Source: P.A. 82‑783) (from Ch. 43, par. 95.14)

5/6-22. Refilling Original Packages – Retail Sales from Original Packages

5/6-7. Affixing Stamps – Labeling – Sealing

No manufacturer or distributor or importing distributor or foreign importer shall sell or deliver any package containing alcoholic liquor manufactured or distributed by him unless the same shall have affixed thereto all cancelled revenue stamps which may be provided by Federal law, and shall also bear thereon a clear and legible label containing the name and address of the manufacturer, the kind of alcoholic liquor contained therein, and in the case of alcoholic liquor (other than beer and imported Scotch whiskey and brandy 4 years old or more) the date when manufactured and the minimum alcoholic content thereof. No person or persons, corporation, partnership or firm shall label alcoholic liquor as "whiskey" or "gin" or shall import for sale or shall sell in this State alcoholic liquor labeled as "whiskey" or "gin" unless the entire alcoholic content thereof, except flavoring materials, is a distillate of fermented mash of grain or mixture of grains. Alcoholic liquor of the type of whiskey or gin not conforming to this requirement must be labeled "imitation whiskey" or "imitation gin" (as the case may be). No spirits shall contain any substance, compound or ingredient which is injurious to health or deleterious for human consumption. No package shall be delivered by any manufacturer or distributor or importing distributor or foreign importer unless the same shall be securely sealed so that the contents thereof cannot be removed without breaking the seal so placed thereon by said manufacturer, and no other licensee shall sell, have in his possession, or use any package or container which does not comply with this Section or does not bear evidence that said package, when delivered to him, complied herewith. (Source: P.A. 82‑783) (from Ch. 43, par. 124)

Section 100.70 Labels

a) No manufacturer, nonresident dealer, distributor or importing distributor shall sell or deliver any package or container containing alcoholic liquor manufactured or delivered by such person unless the same is labeled in conformity with this Section.

b) General requirements and Restrictions:

1) Federal Alcohol Administration Regulations Nos. 4, 5 and 7 relating to the labeling of wine, distilled spirits and malt beverages (27 C.F.R. Section 4, 5, and 7, April 1997, not including any later amendments or editions), are hereby adopted and made a part of this Section for labeling every package or container of wine, distilled spirits and malt beverages, with the following exceptions:

A) Wine includes all products as defined in Section 1-3.03 of the Act [235 ILCS 5/1 3.03] and Section 100.10(h) of this Part.

B) Alcoholic content must be stated on all wine labels.

2) The aforesaid regulations shall apply to wine, distilled spirits and malt beverages packaged purely for intrastate commerce within the State of Illinois to the same extent as though intended for interstate or foreign shipment.

3) No manufacturer, nonresident dealer, distributor or importing distributor shall affix any label to any package or container containing alcoholic liquor for sale or delivery in the State of Illinois until such label has been submitted to and approved by the federal government. Such manufacturer, nonresident dealer, distributor or importing distributor shall submit to the Illinois Liquor Control Commission a photostatic copy of the federal label approval.

4) No package or container containing alcoholic liquor labeled as "whiskey" or "gin" may be imported into, delivered or sold in the State of Illinois unless the entire alcoholic content thereof, except flavoring materials, is a distillate of fermented mash of grain or mixtures of grains. Packages or containers of alcoholic liquor of the type of whiskey or gin not conforming to the requirement must be labeled "imitation whiskey" or "imitation gin", as the case may be.

5) Wine Labels A) Wine labels must contain the name and address of the manufacturer or the bottler of the product.

B) For the purpose of this Section, the use of an assumed trade name which has been registered with the Clerk of the County in which the manufacturer or bottler is located, is acceptable.

6) Malt Beverage Labels

A) Malt beverage labels must contain the name and address of the brewery which manufactured or canned or bottled the product.

B) For the purpose of this Section, the use of an assumed trade name which has been registered with the Clerk of the County in which the manufacturer or bottler is located, is acceptable.

7) Distilled Spirits Labels

A) Labels of all alcoholic liquors other than wine and malt beverages must contain either the phrase "Bottled By" or "Distilled By" (or other descriptive identification of the manufacturer of the product) followed by the name and address of the bottler or manufacturer, as the case may be.

B) For the purpose of this Section, the use of an assumed trade name which has been registered with the Clerk of the County in which the manufacturer or bottler is located, is acceptable.

8) No statement of age shall be made with respect to gins, cordials, liqueurs or specialties.

9) The Commission shall withhold approval of any label if it has reasonable cause to believe that the wording or design contained on the label may, in any manner, tend to deceive the purchaser as to the true nature of such alcoholic liquor. (Source: Amended at 21 Ill. Reg. 5542, effective May 1, 1997)

Section 100.290 Refilling

No retail licensee shall offer for sale or possess on said licensed premises:

a) Any original package of alcoholic liquor which contains any kind or quality of alcoholic liquor other than that which has been sealed and labeled by the manufacturer or nonresident dealer of alcoholic liquor, to contain and to convey said alcoholic liquor.

b) Any original package of alcoholic liquor to which there has been added any water or other substance.

c) Any bottles, casks, or other containers containing alcoholic liquor which contain any deleterious, contaminated, filthy, putrid substance or insects. (Source: Amended at 20 Ill. Reg. 834, effective January 2, 1996)

Section 100.10 Definitions

The following words or phrases are defined as follows:

"Manufacturer" shall include every person who, in the process of filling or refilling an original package with alcoholic liquors purchased by such person, changes the degree or quality of such alcoholic liquors by any manner or means whatsoever.

III. Conclusion

The only conclusion which can be reached after review of the foregoing is that a retailer cannot refill. And by way of extension of the foregoing, a retailer may not under the foregoing authority “pre-fill” containers with alcoholic liquors.

TPP-36 Consignment Sales

1) The following sections of the Liquor Control Act relate to definitions of “sale” and “to sell” and on the power of retail licensees to sell their products.

The term “consignment” does not appear anywhere in the Act.

5/5-1. Licenses issued by Illinois Liquor Control Commission

Licenses issued by the Illinois Liquor Control Commission shall be of the following classes:

(d) A retailer's license shall allow the licensee to sell and offer for sale at retail, only in the premises specified in such license, alcoholic liquor for use or consumption, but not for resale in any form: Provided that any retail license issued to a manufacturer shall only permit such manufacturer to sell beer at retail on the premises actually occupied by such manufacturer. After January 1, 1995, there shall be 2 classes of licenses issued under a retailers license:

(1) A "retailers on premise consumption license" shall allow the licensee to sell and offer for sale at retail, only on the premises specified in the license, alcoholic liquor for use or consumption on the premises or on and off the premises, but not for resale in any form.

(2) An "off premise sale license" shall allow the licensee to sell, or offer for sale at retail, alcoholic liquor intended only for off premise consumption and not for resale in any form. Notwithstanding any other provision of this subsection (d), a retail licensee may sell alcoholic liquors to a special event retailer licensee for resale to the extent permitted under subsection (e).

5/1-3.17. Retailer

"Retailer" means a person who sells, or offers for sale, alcoholic liquor for use or consumption and not for resale in any form. (Source: P.A. 82‑783) (from Ch. 43, par. 95.17)

5/1-3.18. Sell at retail

"Sell at retail" and "sale at retail" refer to and mean sales for use or consumption and not for resale in any form. (Source: P.A. 82‑783) (from Ch. 43, par. 95.18)

5/1-3.21. Sale

"Sale" means any transfer, exchange or barter in any manner, or by any means whatsoever, including the transfer of alcoholic liquors by and through the transfer or negotiation of warehouse receipts or certificates, and includes and means all sales made by any person, whether principal, proprietor, agent, servant or employee. The term "sale" includes any transfer of alcoholic liquor from a foreign importer's license to an importing distributor's license even if both licenses are held by the same person.

(Source: P.A. 82‑783) (from Ch. 43, par. 95.21)

5/1-3.22. To sell

"To sell" includes to keep or expose for sale and to keep with intent to sell. (Source: P.A. 82‑783) (from Ch. 43, par. 95.22)

5/6-5. Receiving Money or Credit from Manufacturer or Distributor B Report of Delinquent Retail Licenses B Cure of Delinquency B Revocation of License

Except as otherwise provided in this Section, it is unlawful for any person having a retailer's license or any officer, associate, member, representative or agent of such licensee to accept, receive or borrow money, or anything else of value, or accept or receive credit (other than merchandising credit in the ordinary course of business for a period not to exceed 30 days) directly or indirectly from any manufacturer, importing distributor or distributor of alcoholic liquor, or from any person connected with or in any way representing, or from any member of the family of, such manufacturer, importing distributor, distributor or wholesaler, or from any stockholders in any corporation engaged in manufacturing, distributing or wholesaling of such liquor, or from any officer, manager, agent or representative of said manufacturer. Except as provided below, it is unlawful for any manufacturer or distributor or importing distributor to give or lend money or anything of value, or otherwise loan or extend credit (except such merchandising credit) directly or indirectly to any retail licensee or to the manager, representative, agent, officer or director of such licensee. A manufacturer, distributor or importing distributor may furnish free advertising, posters, signs, brochures, hand‑outs, or other promotional devices or materials to any unit of government owning or operating any auditorium, exhibition hall, recreation facility or other similar facility holding a retailer's license, provided that the primary purpose of such promotional devices or materials is to promote public events being held at such facility. A unit of government owning or operating such a facility holding a retailer's license may accept such promotional devices or materials designed primarily to promote public events held at the facility. No retail licensee delinquent beyond the 30 day period specified in this Section shall solicit, accept or receive credit, purchase or acquire alcoholic liquors, directly or indirectly from any other licensee, and no manufacturer, distributor or importing distributor shall knowingly grant or extend credit, sell, furnish or supply alcoholic liquors to any such delinquent retail licensee; provided that the purchase price of all beer sold to a retail licensee shall be paid by the retail licensee in cash on or before delivery of the beer, and unless the purchase price payable by a retail licensee for beer sold to him in returnable bottles shall expressly include a charge for the bottles and cases, the retail licensee shall, on or before delivery of such beer, pay the seller in cash a deposit in an amount not less than the deposit required to be paid by the distributor to the brewer; but where the brewer sells direct to the retailer, the deposit shall be an amount no less than that required by the brewer from his own distributors; and provided further, that in no instance shall this deposit be less than 50 cents for each case of beer in pint or smaller bottles and 60 cents for each case of beer in quart or half‑gallon bottles; and provided further, that the purchase price of all beer sold to an importing distributor or distributor shall be paid by such importing distributor or distributor in cash on or before the 15th day (Sundays and holidays excepted) after delivery of such beer to such purchaser; and unless the purchase price payable by such importing distributor or distributor for beer sold in returnable bottles and cases shall expressly include a charge for the bottles and cases, such importing distributor or distributor shall, on or before the 15th day (Sundays and holidays excepted) after delivery of such beer to such purchaser, pay the seller in cash a required amount as a deposit to assure the return of such bottles and cases. Nothing herein contained shall prohibit any licensee from crediting or refunding to a purchaser the actual amount of money paid for bottles, cases, kegs or barrels returned by the purchaser to the seller or paid by the purchaser as a deposit on bottles, cases, kegs or barrels, when such containers or packages are returned to the seller. Nothing herein contained shall prohibit any manufacturer, importing distributor or distributor from extending usual and customary credit for alcoholic liquor sold to customers or purchasers who live in or maintain places of business outside of this State when such alcoholic liquor is actually transported and delivered to such points outside of this State.

No right of action shall exist for the collection of any claim based upon credit extended to a distributor, importing distributor or retail licensee contrary to the provisions of this Section.

Every manufacturer, importing distributor and distributor shall submit or cause to be submitted, to the State Commission, in triplicate, not later than Thursday of each calendar week, a verified written list of the names and respective addresses of each retail licensee purchasing spirits or wine from such manufacturer, importing distributor or distributor who, on the first business day of that calendar week, was delinquent beyond the above mentioned permissible merchandising credit period of 30 days; or, if such is the fact, a verified written statement that no retail licensee purchasing spirits or wine was then delinquent beyond such permissible merchandising credit period of 30 days.

Every manufacturer, importing distributor and distributor shall submit or cause to be submitted, to the State Commission, in triplicate, a verified written list of the names and respective addresses of each previously reported delinquent retail licensee who has cured such delinquency by payment, which list shall be submitted not later than the close of the second full business day following the day such delinquency was so cured.

Such written verified reports required to be submitted by this Section shall be posted by the State Commission in each of its offices in places available for public inspection not later than the day following receipt thereof by the Commission. The reports so posted shall constitute notice to every manufacturer, importing distributor and distributor of the information contained therein. Actual notice to manufacturers, importing distributors and distributors of the information contained in any such posted reports, however received, shall also constitute notice of such information.

The 30 day merchandising credit period allowed by this Section shall commence with the day immediately following the date of invoice and shall include all successive days including Sundays and holidays to and including the 30th successive day.

In addition to other methods allowed by law, payment by check during the period for which merchandising credit may be extended under the provisions of this Section shall be considered payment. All checks received in payment for alcoholic liquor shall be promptly deposited for collection. A post dated check or a check dishonored on presentation for payment shall not be deemed payment.

A retail licensee shall not be deemed to be delinquent in payment for any alleged sale to him of alcoholic liquor when there exists a bona fide dispute between such retailer and a manufacturer, importing distributor or distributor with respect to the amount of indebtedness existing because of such alleged sale.

A delinquent retail licensee who engages in the retail liquor business at 2 or more locations shall be deemed to be delinquent with respect to each such location. The license of any person who violates any provision of this Section shall be subject to suspension or revocation in the manner provided by this Act.

If any part or provision of this Article or the application thereof to any person or circumstances shall be adjudged invalid by a court of competent jurisdiction, such judgment shall be confined by its operation to the controversy in which it was mentioned and shall not affect or invalidate the remainder of this Article or the application thereof to any other person or circumstance and to this and the provisions of this Article are declared severable.

2) Since we do not find direct reference to “consignment sales” in our Act, we look to other sources of authority. The Code of Federal Regulations makes reference to “consignments” in the following section:

[Code of Federal Regulations]

[Title 27, Volume 1, Parts 1 to 199]

[Revised as of April 1, 1999]

From the U.S. Government Printing Office via GPO Access

[CITE: 27CFR11]

[Page 226‑230]

TITLE 27‑‑ALCOHOL, TOBACCO PRODUCTS AND FIREARMS

CHAPTER I‑‑BUREAU OF ALCOHOL, TOBACCO AND FIREARMS, DEPARTMENT OF THE

TREASURY

PART 11‑‑CONSIGNMENT SALES

Subpart A‑‑Scope of Regulations

Sec.

11.1 General.

11.2 Territorial extent.

11.3 Application.

11.4 Jurisdictional limits.

11.5 Administrative provisions.

Subpart B‑‑Definitions

11.11 Meaning of terms.

Subpart C‑‑Unlawful Sales Arrangements

11.21 General.

11.22 Consignment sales.

11.23 Sales conditioned on the acquisition of other products.

11.24 Other than a bona fide sale.

Subpart D‑‑Rules for the Return of Distilled Spirits, Wine, and Malt Beverages

11.31 General. Exchanges and Returns for Ordinary and Usual Commercial Reasons

11.32 Defective products.

11.33 Error in products delivered.

11.34 Products which may no longer be lawfully sold.

11.35 Termination of business.

11.36 Termination of franchise.

11.37 Change in product.

11.38 Discontinued products.

11.39 Seasonal dealers. Exchanges and Returns for Reasons Not Considered Ordinary and Usual

11.45 Overstocked and slow‑moving products.

11.46 Seasonal products.

Authority: 15 U.S.C. 49‑50; 27 U.S.C. 202 and 205.

Source: T.D. ATF‑74, 45 FR 63258, Sept. 23, 1980, unless otherwise

noted.

Subpart A‑‑Scope of Regulations

Sec. 11.1 General.

The regulations in this part, issued pursuant to section 105 of the Federal Alcohol Administration Act (27 U.S.C. 205), specify arrangements which are consignment sales under section 105(d) of the Act and contain guidelines concerning return of distilled spirits, wine and malt beverages from a trade buyer. This part does not attempt to enumerate all of the practices prohibited by section 105(d) of the Act. Nothing in this part shall operate to exempt any person from the requirements of any State law or regulation.

[T.D. ATF‑364, 60 FR 20427, Apr. 26, 1995]

Sec. 11.2 Territorial extent.

This part applies to the several States of the United States, the District of Columbia, and Puerto Rico.

Sec. 11.3 Application.

(a) General. The regulations in this part apply to transactions between industry members and trade buyers.

(b) Transactions involving State agencies. The regulations in this part apply to transactions involving State agencies operating as retailers or wholesalers.

Sec. 11.4 Jurisdictional limits.

(a) General. The regulations in this part apply where:

(1) The industry member sells, offers for sale, or contracts to sell to a trade buyer engaged in the sale of distilled spirits, wines, or malt beverages, or for any such trade buyer to purchase, offer to purchase, or contract to purchase, any such products on consignment or under conditional sale or with the privilege of return or on any basis other than a bona fide sale, or where any part of such transaction involves, directly or indirectly, the acquisition by such person from the trade buyer or the agreement to acquire from the trade buyer other distilled spirits, wine, or malt beverages; and,

(2) If: (i) The sale, purchase, offer or contract is made in the course of interstate or foreign commerce; or

(ii) The industry member engages in using the practice to such an extent as substantially to restrain or prevent transactions in interstate or foreign commerce in any such products; or

(iii) The direct effect of the sale, purchase, offer or contract is to prevent, deter, hinder, or restrict other persons from selling or offering for sale any such products to such trade buyer in interstate or foreign commerce.

(b) Malt beverages. In the case of malt beverages, this part applies to transactions between a retailer in any State and a brewer, importer, or wholesaler of malt beverages inside or outside such State only to the extent that the law of such State imposes requirements similar to the requirements of section 5(d) of the Federal Alcohol Administration Act (27 U.S.C. 205(d)), with respect to similar transactions between a retailer in such State and a brewer, importer, or wholesaler of malt beverages in such State.

Sec. 11.5 Administrative provisions.

(a) General. The Act makes applicable the provisions including penalties of sections 49 and 50 of Title 15, United States Code, to the jurisdiction, powers and duties of the Director under this Act, and to any person (whether or not a corporation) subject to the provisions of law administered by the Director under this Act.

(b) Examination and subpoena. The Director or any authorized ATF officers shall at all reasonable times have access to, for the purpose of examination, and the right to copy any documentary evidence of any person, partnership, or corporation being investigated or proceeded against; and the Director shall have the power to require by subpoena the attendance and testimony of witnesses and the production of all such documentary evidence relating to any matter under investigation, upon a satisfactory showing that the requested evidence may reasonably be expected to yield information relevant to any matter being investigated under the Act.

[T.D. ATF‑364, 60 FR 20427, Apr. 26, 1995]

Subpart B‑‑Definitions

Sec. 11.11 Meaning of terms.

As used in this part, unless the context otherwise requires, terms have the meanings given in this section. Any other term defined in the Federal Alcohol Administration Act and used in this part shall have the meaning assigned to it by that Act.

Act. The Federal Alcohol Administration Act.

ATF officer. An officer or employee of the Bureau of Alcohol, Tobacco and Firearms (ATF) authorized to perform any function relating to the administration or enforcement of this part.

Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the Department of the Treasury, Washington, DC.

Exchange. The transfer of distilled spirits, wine, or malt beverages from a trade buyer to an industry member with other products taken as a replacement.

Industry member. Any person engaged in business as a distiller, brewer, rectifier, blender, or other producer, or as an importer or wholesaler of distilled spirits, wine or malt beverages, or as a bottler or warehouseman and bottler, of distilled spirits.

Product. Distilled spirits, wine or malt beverages, as defined in the Federal Alcohol Administration Act.

Retailer. Any person engaged in the sale of distilled spirits, wine or malt beverages to consumers. A wholesaler who makes incidental retail sales representing less than five percent of the wholesaler's total sales volume for the preceding two‑month period shall not be considered a retailer with respect to such incidental sales.

Return. The transfer of distilled spirits, wine, or malt beverages from a trade buyer to the industry member from whom purchased, for cash or credit.

Trade buyer. Any person who is a wholesaler or retailer of distilled spirits, wine or malt beverages.

[T.D. ATF‑74, 45 FR 63258, Sept. 23, 1980, as amended by T.D. ATF‑364, 60 FR 20427, Apr. 26, 1995]

Subpart C‑‑Unlawful Sales Arrangements

Sec. 11.21 General.

It is unlawful for an industry member to sell, offer for sale, or contract to sell to any trade buyer, or for any such trade buyer to purchase, offer to purchase, or contract to purchase any products (a) on consignment; or (b) under conditional sale; or (c) with the privilege of return; or (d) on any basis other than a bona fide sale; or (e) if any part of the sale involves, directly or indirectly, the acquisition by such person of other products from the trade buyer or the agreement to acquire other products from the trade buyer. Transactions involving the bona fide return of products for ordinary and usual commercial reasons arising after the product has been sold are not prohibited.

Sec. 11.22 Consignment sales.

Consignment sales are arrangements wherein the trade buyer is under no obligation to pay for distilled spirits, wine, or malt beverages until they are sold by the trade buyer.

[[Page 229]]

Sec. 11.23 Sales conditioned on the acquisition of other products.

(a) General. A sale in which any part of the sale involves, directly or indirectly, the acquisition by the industry member from the trade buyer, or the agreement, as a condition to present or future sales, to accept other products from the trade buyer is prohibited.

(b) Exchange. The exchange of one product for another is prohibited as a sales transaction conditioned on the acquisition of other products. However, the exchange of a product for equal quantities (case for case) of the same type and brand of product, in containers of another size is not considered an acquisition of ``other'' products and is not prohibited if there was no direct or implied privilege of return extended when the product was originally sold. Industry members may make price adjustments on products eligible for exchange under this paragraph.

Sec. 11.24 Other than a bona fide sale.

``Other than a bona fide sale'' includes, but is not limited to, sales in connection with which the industry member purchases or rents the display, shelf, storage or warehouse space to be occupied by such products at premises owned or controlled by the retailer.

[T.D. ATF‑364, 60 FR 20427, Apr. 26, 1995]

Subpart D‑‑Rules for the Return of Distilled Spirits, Wine, and Malt Beverages

Sec. 11.31 General.

(a) Section 5(d) of the Act provides, in part, that it is unlawful to sell, offer to sell, or contract to sell products with the privileges of return for any reason, other than those considered to be ``ordinary and usual commercial reasons'' arising after the product has been sold.

Sections 11.32 through 11.39 specify what are considered ``ordinary and usual commercial reasons'' for the return of products, and outline the conditions and limitations for such returns.

(b) An industry member is under no obligation to accept the return of products for the reasons listed in Secs. 11.32 through 11.39.

Exchanges and Returns for Ordinary and Usual Commercial Reasons

Sec. 11.32 Defective products.

Products which are unmarketable because of product deterioration, leaking containers, damaged labels or missing or mutilated tamper evident closures may be exchanged for an equal quantity of identical products or may be returned for cash or credit against outstanding

indebtedness.

[T.D. ATF‑364, 60 FR 20427, Apr. 26, 1995]

Sec. 11.33 Error in products delivered.

Any discrepancy between products ordered and products delivered may be corrected, within a reasonable period after delivery, by exchange of the products delivered for those which were ordered, or by a return for cash or credit against outstanding indebtedness.

Sec. 11.34 Products which may no longer be lawfully sold.

[T.D. ATF‑364, 60 FR 20428, Apr. 26, 1995]

Sec. 11.35 Termination of business.

Products on hand at the time a trade buyer terminates operations may be returned for cash or credit against outstanding indebtedness. This does not include a temporary seasonal shutdown (see Sec. 11.39).

[T.D. ATF‑364, 60 FR 20428, Apr. 26, 1995]

Sec. 11.36 Termination of franchise.

[[Page 230]]

Sec. 11.37 Change in product.

A trade buyer's inventory of a product which has been changed in formula, proof, label or container (subject to Sec. 11.46) may be exchanged for equal quantities of the new version of that product.

Sec. 11.38 Discontinued products.

When a producer or importer discontinues the production or importation of a product, a trade buyer's inventory of that product may be returned for cash or credit against outstanding indebtedness.

Sec. 11.39 Seasonal dealers.

Exchanges and Returns for Reasons Not Considered Ordinary and Usual

Sec. 11.45 Overstocked and slow‑moving products.

The return or exchange of a product because it is overstocked or slow‑moving does not constitute a return for ``ordinary and usual commercial reasons.''

Sec. 11.46 Seasonal products.

[This was last updated on September 17, 1999]

TPP-37 Importation of Alcohol into Illinois

Personal Importation of Alcoholic Beverages

The Bureau of Alcohol, Tobacco and Firearms (ATF) regulates the importation of alcoholic beverages into the United States for commercial use. Under the Federal Alcohol Administration Act and the Internal Revenue Code of 1986, any person engaged in the business of importing alcoholic beverages into the United States for commercial use must have an importer's basic permit and obtain a certificate of label approval.

When a person, or business, imports alcoholic beverages into the United States on a one-time basis for personal use, the above requirements do not apply. In some cases, individuals who import alcoholic beverages for personal use on a repetitive or continuous basis, may be required to obtain an importer's basic permit and possess a certificate of label approval for these imported shipments. ATF and the U.S. Customs Service have concurrent jurisdiction in the area of personal use importations of alcoholic beverages. As a practical matter, it is usually the U.S. Customs Service and the district director at the port of entry who decide whether or not a particular importation is, in fact, for personal use only. In certain unusual circumstances, ATF may exercise joint jurisdiction with Customs in making this determination.

If U.S. Customs and/or ATF decide that imported alcohol is for personal use, an importer's basic permit is not required nor is it necessary to obtain the certificate of label approval, however, all federal, state and local taxes must be paid. In addition, other State, local or U.S. Customs requirements may apply. It should be noted that some States prohibited the direct shipment of alcoholic beverages to individuals. Anyone interested in importing alcohol for personal use should contact their State liquor control agency. A list of State Liquor Control Boards is available on this web site.

If the alcoholic beverages are to be given away as personal gifts to friends, neighbors, or relatives, etc., or are to be similarly distributed, the Federal Government health warning label requirement is applicable. Gifts of alcoholic beverages connected with the solicitation of orders for, or the sale of, such products constitutes commercial use and can only be conducted by a federally licensed Importer.

Finally, the determination whether or not a shipment is for personal or commercial use cannot be decided solely on the size of the shipment but must be determined on a case-by-case basis considering the circumstances surrounding the importation. However, the size of the shipment may give rise to a question resulting in the need for an investigation by Customs or ATF.

For Further Information Contact:

Bureau of ATF U.S. Customs Service

Alcohol Import-Export Branch Commercial Rulings Division

TEL: (202) 927-8110 Office of Regulations & Rulings

FAX: (202) 927-8605 1300 Pennsylvania Ave., NW

Washington, D.C. 20229

TEL: (202) 927-2244

{The foregoing courtesy of the Bureau of Alcohol, Tobacco and Firearms website.}

Requests for Import Authorization into the State of Illinois

Generally, individuals are not permitted to import more than one gallon of alcoholic beverages into Illinois. Illinois is has a “Three-Tier” system for the transportation and sale of alcohol, and in quantities greater than one gallon, the product must first pass from importers or manufacturers to distributors and then to retailers before finally being offered for sale to consumers.

The Commission, however, can make exceptions on a case-by-case basis for individuals who are returning or moving to Illinois from overseas with personal collections of alcoholic beverages. The following information is provided to you as a courtesy by the Illinois Liquor Control Commission and does not guarantee your request for import authorization will be granted. Each request will be reviewed by the Commission’s staff with an eye toward determining if the alcohol requested for import is of a “saleable” quality or quantity. A final determination will be made by the Commission’s Executive Director, and if appropriate, approved and issued within one or two days of receipt of the request.

Prior to requesting import authorization from the Illinois Liquor Control Commission, the United States Department of Customs should be contacted. That agency will have federal requirements for the importation of alcohol, including excise tax and duties that must be paid to the federal government. U.S. Customs will also require authorization from the state into which the alcohol is to be imported. If the final destination of the alcoholic beverage you wish to import is in a state other than Illinois, you must contact that state’s alcoholic beverage control authority, even if your imported alcohol passes through the State of Illinois. U.S. Customs will hold the imported alcoholic beverage at a port of entry until presented with authorization from the state of final destination for the product.

The importation of alcohol into the State of Illinois for personal consumption only and not for resale in any form, is allowed with: 1) prior authorization by the Illinois Liquor Control Commission; and 2) payment of the required “Use Tax” to the Illinois Department of Revenue. Both the import authorization and a receipt for the taxes paid are required for U.S. Customs officials to the release the imported alcohol from its port of entry.

A request for import authorization from the State of Illinois must be received by the Illinois Liquor Control Commission in writing (e-mail is acceptable) and must include the following information about the individual importing the beverage, and about the beverage itself:

Regarding the individual importing the alcoholic beverage:

1. The individual's name

2. The individual's address (the final destination of the alcoholic beverage)

3. The individual's date of birth

4. The individual's Social Security Number (or resident, visa number)

Regarding the alcoholic beverage:

1. The names of the alcoholic beverages

2. The type of alcoholic beverages (beer, wine or spirits)

3. The number of bottles, cases, cans, etc., of each beverage being imported

4. The amount of beverage per container (typically 750 ml per bottle of wine)

5. The percentage of alcohol by volume (typically 9-14% for wine)

6. The approximate dollar value per bottle, can, etc.

7. The country or state of origin of the alcoholic beverage

Once the Commission has received this information, it will be reviewed and, if appropriate, authorization will issue. The original authorization will be sent to the address specified in the request, a copy forwarded to the Illinois Department of Revenue, and a copy retained as an official record by this office. If the importer wishes to have an additional copy faxed to another location, such as a current overseas residence, include that address in the request. At this time the Commission cannot issue authorizations over e-mail.

Finally, the person importing must remit an alcohol “Use Tax” to the Illinois Department of Revenue, a receipt for which will also be required prior to the shipment’s release from U.S. Customs. The tax will be calculated by volume and alcohol type (beer, wine or spirits). If you have questions regarding taxation issues, please address them to the following individual:

Mr. Richard Murphy

Illinois Department of Revenue

Cashier and Deposit Division

James R. Thompson Center

100 West Randolph Street, Suite C-300

Chicago, Illinois 60601

(312) 814-2620

Note that this procedure is an exception to the general prohibition against importing alcoholic beverages outside of the “three tier” system, and it is not intended to be used by individuals for bulk purchases of alcohol overseas. Under no means is any alcohol imported in the above fashion to be resold in any form. Existing Illinois licensees who import alcoholic beverages in a manner not proscribed by the Illinois Liquor Control Act are subject to revocation of their licenses. Individuals re-selling alcoholic beverages without a requisite Illinois Liquor license are subject to criminal penalties. (235 ILCS 5/10-1(a))

TPP- 38 Distributor Warehousing

I. Policy

It is the policy of the Illinois Liquor Control Commission (ILCC) that licensed Illinois distributors, importing distributors and foreign importers shall only store alcoholic liquors for sale to licensees in this State and to persons without the State, as may be permitted by law, from licensed premises located within the State of Illinois.

II. Background

The following sections of the Liquor Control Act apply:

5/5-1. Licenses issued by Illinois Liquor Control Commission

Licenses issued by the Illinois Liquor Control Commission shall be of the following classes:

(b) A distributor's license shall allow the wholesale purchase and storage of alcoholic liquors and sale of alcoholic liquors to licensees in this State and to persons without the State, as may be permitted by law.

5/6-8.Record of Alcoholic Liquor B Storage

Each manufacturer or importing distributor or foreign importer shall keep an accurate record of all alcoholic liquors manufactured, distributed, sold, used, or delivered by him in this State during each month, showing therein to whom sold, and shall furnish a copy thereof or a report thereon to the State Commission, as the State Commission may, request. Each importing distributor or manufacturer to whom alcoholic liquors imported into this State have been consigned shall effect possession and physical control thereof by storing such alcoholic liquors in the premises wherein such importing distributor or manufacturer is licensed to engage in such business as an importing distributor or manufacturer and to make such alcoholic liquors together with accompanying invoices, bills of lading and receiving tickets available for inspection by an agent or representative of the Department of Revenue and of the State Commission.

All alcoholic liquor imported into this State must be off‑loaded from the common carrier, vehicle, or mode of transportation by which the alcoholic liquor was delivered into this State. The alcoholic liquor shall be stored at the licensed premises of the importing distributor before sale and delivery to licensees in this State. A distributor or importing distributor, upon application to the Commission, may secure a waiver of the provisions of this Section for purposes of delivering beer directly to a licensee holding or otherwise participating in a special event sponsored by a unit of government or a not‑for‑profit organization.

5/6-9. Registration of trade marks, etc. B Sale within geographical area B Delivery to authorized persons

The Legislature hereby finds and declares that for purposes of ensuring the preservation and enhancement of interbrand competition in the alcoholic liquor industry within the State, ensuring that importation and distribution of alcoholic liquor in the State will be subject to thorough and inexpensive monitoring by the State, reducing the importation of illicit or untaxed alcoholic liquor into the State, excluding misbranded alcoholic liquor products from the State, providing incentives to distributors to service and sell to larger numbers of retail licensees in the geographic area where such distributors are engaged in business, and reducing the amount of spoiled and overaged alcoholic liquor products sold to consumers, it is necessary to restrict the purchase of alcoholic liquors at wholesale in the State to those persons selected by the manufacturer, distributor, importing distributor or foreign importer who owns or controls the trade mark, brand or name of the alcoholic liquor products sold to such persons, and to restrict the geographic area or areas within which such persons sell such alcoholic liquor at wholesale, as provided in this Section.

Each manufacturer, non‑resident dealer, distributor, importing distributor, or foreign importer who owns or controls the trade mark, brand or name of any alcoholic liquor shall register with the State Commission, in the Chicago office, on or before the effective date, the name of each person to whom such manufacturer, non‑resident dealer, distributor, importing distributor, or foreign importer grants the right to sell at wholesale in this State any such alcoholic liquor, specifying the particular trade mark, brand or name of alcoholic liquor as to which such right is granted, the geographical area or areas for which such right is granted and the period of time for which such rights are granted to such person. Each manufacturer, non-resident dealer, distributor or importing distributor, or foreign importer who is required to register under this Section must furnish a copy of the registration statement at the time of appointment to the person who has granted the right to sell alcoholic liquor at wholesale. Such manufacturer, non‑resident dealer, distributor, importing distributor, or foreign importer may grant the right to sell at wholesale any trade mark, brand or name of any alcoholic liquor in any geographical area to more than one person. If the registration is received after the effective date, the Commission shall treat the date the registration was received in the Chicago office as the effective date. Such registration shall be made on a form prescribed by the State Commission and the State Commission may require such registration to be on a form provided by it. No such registration shall be made by any other person or in any other manner than as is provided in this Section and only those persons registered by the manufacturer, non‑resident dealer, distributor, importing distributor or foreign importer, shall have the right to sell at wholesale in this State, the brand of alcoholic liquor specified on the registration form. However, a licensed Illinois distributor who has not been registered to sell a brand of alcoholic liquor, but for a period of 2 years prior to November 8, 1979, has been engaged in the purchase of a brand for resale from a licensed Illinois distributor who has the right to sell that brand at wholesale, may continue to purchase and resell the brand at wholesale, and may purchase from the same distributor and resell at wholesale any new brands of the same manufacturer, provided that:

(1) Within 60 days after November 8, 1979, he identifies the brand which he so purchased to the State Commission and the Commission within 30 days thereafter verifies that the purchases have occurred;

(2) Thereafter, he notifies the State Commission in writing of any brands of the same manufacturer which he wishes to purchase from the same distributor that were not available for distribution on or before November 8, 1979, and that the Commission within 30 days of such notification verifies that the brand is a new brand of the same manufacturer, and that the same licensed Illinois distributor has the right to sell the new brand at wholesale;

(3) His licensed business address is within the geographical area for which the licensed Illinois distributor from whom the purchases are made has the right to sell said brand or brands of alcoholic liquor; and

(4) His sales are made within the geographical area for which the licensed Illinois distributor from whom the purchases are made has the right to sell the brand or brands of alcoholic liquor and only to retail licensees whose licensed premises are located within the aforementioned geographical area.

No person to whom such right is granted shall sell at wholesale in this State any alcoholic liquor bearing such trade mark, brand or name outside of the geographical area for which such person holds such selling right, as registered with the State Commission, nor shall he sell such alcoholic liquor within such geographical area to a retail licensee if the premises specified in such retailer's license are located outside such geographical area. Any licensed Illinois distributor who has not been granted the right to sell any alcoholic liquor at wholesale and is purchasing alcoholic liquor from a person who has been granted the right to sell at wholesale may sell and deliver only to retail licensees whose licensed premises are within the same geographical area as the person who has been granted the right to sell at wholesale.

No manufacturer, importing distributor, distributor, non‑ resident dealer, or foreign importer shall sell or deliver any package containing alcoholic liquor manufactured or distributed by him for resale, unless the person to whom such package is sold or delivered is authorized to receive such package in accordance with the provisions of this Act.

Sec. 6-9.1. Deliveries to retail establishments.

(a) A distributor of wine or spirits shall deliver to any retailer within any geographic area in which that distributor has been granted by a wholesaler the right to sell its trademark, brand, or name at least once every 2 weeks if (i) in the case of a retailer located in a county with a population of at least 3,000,000 inhabitants or in a county adjacent to a county with at least 3,000,000 inhabitants, the retailer agrees to purchase at least $200 of wine or spirits from the distributor every 2 weeks; or (ii) in the case of a retailer located in a county with a population of less than 3,000,000 that is not adjacent to a county with a population of at least 3,000,000 inhabitants, the retailer agrees to purchase at least $50 of wine or spirits from the distributor every 2 weeks.

(b) On January 1, 2002 and every 2 years thereafter, the dollar amount in items (i) and (ii) of subsection (a) shall be increased or decreased by a percentage equal to the percentage increase or decrease in the Consumer Price Index during the previous 2 years according to the most recent available data.

The Peerless changes: 5/6-9

(4) His sales are made within the geographical area for which the licensed Illinois distributor from whom the purchases are made has the right to sell the brand or brands of alcoholic liquor and only to retail licensees whose licensed premises are located within the aforementioned geographical area.

No person to whom such right is granted shall sell at wholesale in this State any alcoholic liquor bearing such trade mark, brand or name outside of the geographical area for which such person holds such selling right, as registered with the State Commission, nor shall he sell such alcoholic liquor within such geographical area to a retail licensee if the premises specified in such retailer's license are located outside such geographical area. Any licensed Illinois distributor who has not been granted the right to sell any alcoholic liquor at wholesale and is purchasing alcoholic liquor from a person who has been granted the right to sell at wholesale may sell and deliver only to retail licensees whose licensed premises are within the same geographical area as the person who has been granted the right to sell at wholesale.

(Source: P.A. 90-0596, eff. 6-24-98 )

III. Procedures

1. All licensed Illinois distributors, importing distributors and foreign importers shall have licensed warehouse facilities within the State of Illinois.

2. All sales to retailers, located within each distributor, importing distributor and foreign importer’s geographic territory, shall be made from the licensed warehouse facilities within the State of Illinois.

3. All business records, as defined in Sec. 5/6-8 and Regulation 100.130, shall be maintained upon the licensed warehouse facilities within the State of Illinois.

4. All alcoholic products sold to the licensed Illinois distributors, importing distributors and foreign importers shall be off‑loaded at the licensed warehouse facilities within the State of Illinois.

5 The alcoholic products shall be stored at the licensed warehouse facilities within the State of Illinois before sale and delivery to licensees in this State.

6. Illinois distributors, importing distributors and foreign importers may warehouse product in public warehouses, registered under Article VIIA of the Liquor Control Act, however, sales of such products may not take place from such warehouse premises.

TPP-39 Multi-tier licensing arrangements

THIRD-PARTY COMPANY AFFIDAVIT

TPP-7 Point Of Sale Materials - Manufacturer To Distributor

TPP-11 Consumer Coupons and Rebates

I. Purpose

TPP-16 Deposits On Bottles And Barrels

TPP-18 Pre-Mixing Of Alcoholic Products

TPP-20 Brew Pubs

C. Rotation

II. Policy

III. Background

IV. Exceptions