Senate Bill S3808A

                                
 
BILL NUMBER: S3808

SPONSOR: SKOUFIS
 
TITLE OF BILL:

An act to amend the alcoholic beverage control law, in relation to
delivery fee waivers

 
PURPOSE:

This legislation would require liquor wholesalers to waive the delivery
fee for any order in excess of $200. Any delivery fee for a single order
shall equal $7.50. Requires wholesalers assessing a delivery fee to
implement a customer fee transparency program.

 
SUMMARY OF PROVISIONS:

Section 1: Amends the alcohol beverage control law by adding a new
section 68.

Subdivision one of Section 3: requires liquor wholesalers to waive
              

delivery fees for any order in excess of $200 and prohibits such whole-
salers from passing on the delivery fee that would otherwise be assessed
on orders to its clients by any means, including but limited to
increases in product pricing, reductions in discount programs or other
means resulting in net positive revenue for the wholesaler.  Mandates
that any delivery fee for a single order shall equal $7.50.

Subdivision two of Section 3: Requires wholesalers assessing a delivery
fee pursuant to this section to implement a customer fee transparency
program. Such program requires wholesalers to disclose to any and all
entities purchasing liquor from such wholesaler, at a minimum, a
detailed description of (a) the fee, (b) a reasoning of the manner for
assessing such fee; and (c) methodology used to determine such fee for
all purchases.

Subdivision three of Section 3 Requires the State Liquor Authority to
approve any fee or charge imposed by a liquor wholesaler to a customer.

Section 2: Effective date.

 
JUSTIFICATION:

The proposed legislation would amend several provisions of the Alcoholic
Beverage Control law to create a "primary American source of supply" of
liquor and wine for distribution and sale of alcoholic beverages in New
York State. It directs the manufacturer and/or owner of a brand of
liquor or wine to designate a primary American source of supply. Such
manufacturer and/or owner is required to file an application for desig-
nation with the State Liquor Authority. This legislation, is passed,
will provide greater accountability and transparency in the distribution
and sale of liquor and wine in New York State.

Under a primary American source statute, wholesalers are permitted to
purchase wine and liquor directly from the brand, manufacturer, or
owner. The primary source of liquor or wine may be the manufacturer of
the product or the source closest to the manufacturer in the channel of
commerce, from whom the product can be secured by wholesalers.

Under New York State law, there is no restriction on wholesalers
purchasing wine and liquor from a source other than from the direct
primary source. Such non-primary sources include importers from outside
the United States. This legislation would make it unlawful for any New
York wholesaler to purchase liquor or wine from any source other than
the primary source of supply in the United States.  This bill requires
brand owners, distributors, manufacturers, and retainers to maintain
accurate records of the sale, size, and brand of products. Such require-
ments will contribute to the integrity of the products being purchased
and sold to New York consumers.

This legislation also includes delivery fee reform, by prohibiting
wholesalers from assessing a delivery fee on any order in excess of $200
and authorizing a set fee of $7.50 for any order less than $200.  Deliv-
ery fees assessed by wholesalers have been steadily increasing to the
detriment of smaller restaurants and bars. Many of these establishments
do not have the capacity to order supplies in bulk, and therefore do not
qualify for free deliveries. Limiting the amount wholesalers can charge
in delivery fees is imperative for local restaurants to maintain econom-
ic wellbeing, especially in light of COVID-19 mandated closures.

 
LEGISLATIVE HISTORY:

New bill

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law; provided, however, that effective immediately, the addi-
tion, amendment and/or repeal of any rule or regulation necessary for
the implementation of this act on its effective date are authorized and
directed to be made and completed on or before such effective date.