CHAPTER 102. INTRA-INDUSTRY RELATIONSHIPS

State Codes and Statutes

Statutes > Texas > Alcoholic-beverage-code > Title-4-regulatory-and-penal-provisions > Chapter-102-intra-industry-relationships

ALCOHOLIC BEVERAGE CODE

TITLE 4. REGULATORY AND PENAL PROVISIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 102.01. TIED HOUSE PROHIBITED. (a) In this section, "tied

house" means any overlapping ownership or other prohibited

relationship between those engaged in the alcoholic beverage

industry at different levels, that is, between a manufacturer and

a wholesaler or retailer, or between a wholesaler and a retailer,

as the words "wholesaler," "retailer," and "manufacturer" are

ordinarily used and understood, regardless of the specific names

given permits under Subtitle A, Title 3, of this code.

(b) In considering an original or renewal application for a

permit issued under Subtitle A, Title 3, of this code, the

commission or administrator may make any investigation or request

any additional information necessary to enforce this section and

to provide strict adherence to a general policy of prohibiting

the tied house and related practices. The activities prohibited

by this section are unfair competition and unlawful trade

practices.

Subtitle A, Title 3, of this code may secure or hold, directly or

indirectly, an ownership interest in the business or corporate

stocks, including a stock option, convertible debenture, or

similar interest, in a permit or business of a permittee of a

different level who maintains licensed premises in Texas.

(d) No person may act or serve as officer, director, or employee

of the businesses of permittees at different levels.

(e) No permittee may own the premises, fixtures, or equipment of

a permittee of a different level.

(f) No permittee may secure or in any manner obtain the use of

any premises, fixtures, or equipment on the credit of a permittee

of a different level.

(g) No permittee may loan to, or by means of his credit secure a

loan for, a permittee of a different level. If a permittee

secures a loan from a source outside the state, there is a

presumption of a tied house relationship or subterfuge, and the

permittee securing the loan has the burden of showing that he has

not violated this section.

(h) No permittee may enter with a permittee of a different level

or with another person or legal entity into a conspiracy or

agreement to control or manage, financially or administratively,

directly or indirectly, in any form or degree, the business or

interests of a permittee of a different level.

(i) No permittee may enter with another permittee into any type

of profit-sharing agreement or any agreement relating to the

repurchase of any assets or any agreement attempting to

effectuate the shipment or delivery of an alcoholic beverage on

consignment.

(j) On finding that a person has violated any provision of

Subsections (c) through (i) of this section, the commission or

administrator shall suspend for not less than six months or

cancel the permit of any permittee involved. A person who held or

had an interest in a permit cancelled under this subsection is

ineligible to hold or have an interest in a permit for one year

after the cancellation.

(k) This section does not apply to the application for renewal

of a permit held by an applicant who was engaged in the legal

alcoholic beverage business in this state under a charter or

permit before August 24, 1935, or to an application for a

nonresident seller's or wholesaler's permit held by an applicant

who continuously has been the holder of a permit of that type

since January 1, 1941.

Acts 1977, 65th Leg., p. 498, ch. 194, Sec. 1, eff. Sept. 1,

1977.

Sec. 102.02. PROVIDING SAMPLES. Notwithstanding any other

provision of this code, the holder of a wholesaler's permit or

the holder's agent, representative, or employee may furnish or

give a sample of liquor to a holder of a permit authorizing the

sale of that category of alcoholic beverage at retail if the

retail permittee has not previously purchased that brand from

that wholesaler permittee. The wholesaler may give the retail

permittee not more than 750 milliliters of any brand of distilled

spirits, not more than three liters of any brand of wine in that

package, and not more than one six-pack of any other alcoholic

beverage so packaged. The retail permittee or the permittee's

agent, servant, or employee may sample the product on the

licensed premises only if the wholesaler or the wholesaler's

agent, servant, or employee is present.

Added by Acts 1993, 73rd Leg., ch. 934, Sec. 64, eff. Sept. 1,

1993.

Sec. 102.03. PERSONS BARRED FROM INTEREST IN PREMISES OF RETAIL

LIQUOR OUTLET. (a) This section applies to the holder of a

brewer's, distiller's and rectifier's, winery, wholesaler's,

class B wholesaler's, or wine bottler's permit.

(b) No holder of a permit named in Subsection (a) of this

section may directly or indirectly, or through a subsidiary,

affiliate, agent, employee, officer, director, or firm member,

own an interest of any kind in the premises where a package store

permittee, wine only package store permittee, or mixed beverage

permittee conducts his business.

Acts 1977, 65th Leg., p. 499, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1979, 66th Leg., p. 2118, ch. 819, Sec. 9,

eff. June 13, 1979; Acts 1983, 68th Leg., p. 1352, ch. 278, Sec.

52, eff. Sept. 1, 1983.

Sec. 102.04. PERSONS BARRED FROM INTEREST IN MIXED BEVERAGE

BUSINESS. (a) This section applies to any person who has an

interest in the business of a distiller-rectifier, brewer,

wholesaler, class B wholesaler, winery, wine bottler, or local

distributor's permittee. This section also applies to the agent,

servant, or employee of a person who has an interest in one of

those businesses.

(b) Except as permitted in Section 23.01 of this code, no person

to whom this section applies may:

(1) have a direct or indirect interest in the business,

premises, equipment, or fixtures of a mixed beverage

establishment;

(2) furnish or lend any money, service, or other thing of value

to a mixed beverage permittee or guarantee the fulfillment of a

financial obligation of a mixed beverage permittee;

(3) enter or offer to enter into an agreement, condition, or

system which in effect amounts to the shipment and delivery of

alcoholic beverages on consignment;

(4) furnish, rent, lend, or sell to a mixed beverage permittee

any equipment, fixtures, or supplies used in the selling or

dispensing of alcoholic beverages;

(5) pay or make an allowance to a mixed beverage permittee for a

special advertising or distributing service, or allow the

permittee an excessive discount;

(6) offer to a mixed beverage permittee a prize, premium, or

other inducement, except as permitted by Section 102.07(b) of

this code; or

(7) advertise in the convention program or sponsor a function at

a meeting or convention or a trade association of holders of

mixed beverage permits, unless the trade association was

incorporated before 1950.

Acts 1977, 65th Leg., p. 499, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1977, 65th Leg., p. 1183, ch. 453, Sec. 9,

eff. Sept. 1, 1977; Acts 1979, 66th Leg., p. 2118, ch. 819, Sec.

10, eff. June 13, 1979; Acts 1983, 68th Leg., p. 1352, ch. 278,

Sec. 53, eff. Sept. 1, 1983.

Sec. 102.05. HOTEL: MULTIPLE INTERESTS AUTHORIZED. A hotel may

hold a package store permit, mixed beverage permit, wine and beer

retailer's permit, and retail dealer's license if the businesses

are completely segregated from each other.

Acts 1977, 65th Leg., p. 499, ch. 194, Sec. 1, eff. Sept. 1,

1977.

Sec. 102.06. RELATIONSHIP BETWEEN AGENT OR MANUFACTURER'S AGENT

AND PACKAGE STORE. No holder of an agent's or manufacturer's

agent's permit may directly or indirectly have an interest in a

package store permit or wine only package store permit or be

residentially domiciled with a person who has a financial

interest in a package store permit or wine only package store

permit.

Acts 1977, 65th Leg., p. 499, ch. 194, Sec. 1, eff. Sept. 1,

1977.

Sec. 102.07. PROHIBITED DEALINGS WITH RETAILER OR CONSUMER. (a)

Except as provided in Subsections (b), (d), and (g), no person

who owns or has an interest in the business of a distiller,

brewer, rectifier, wholesaler, class B wholesaler, winery, or

wine bottler, nor the agent, servant, or employee of such a

person, may:

(1) own or have a direct or indirect interest in the business,

premises, equipment, or fixtures of a retailer;

(2) furnish, give, or lend any money, service, or thing of value

to a retailer;

(3) guarantee a financial obligation of a retailer;

(4) make or offer to enter an agreement, condition, or system

which will in effect amount to the shipment and delivery of

alcoholic beverages on consignment;

(5) furnish, give, rent, lend, or sell to a retail dealer any

equipment, fixtures, or supplies to be used in selling or

dispensing alcoholic beverages, except that alcoholic beverages

may be packaged in combination with other items if the package is

designed to be delivered intact to the ultimate consumer and the

additional items have no value or benefit to the retailer other

than that of having the potential of attracting purchases and

promoting sales;

(6) pay or make an allowance to a retailer for a special

advertising or distribution service;

(7) allow an excessive discount to a retailer; or

(8) offer a prize, premium, gift, or similar inducement to a

retailer or to the agent, servant, or employee of a retailer.

(b) A permittee covered by Subsection (a) of this section may

furnish to a retailer without cost advertising specialties

showing the name of the product advertised. The total value of

all advertising specialties for any one brand furnished to a

retailer in any one calendar year may not exceed $78. Not more

than once a year, the administrator on the administrator's own

motion or on the motion of the permittee may increase or decrease

the total amount of advertising specialties permitted under this

subsection by not more than six percent based on the consumer

price index and previous adjustments, if any. For the purposes of

this subsection, "consumer price index" means the annual average

over a calendar year of the consumer price index (all items,

United States city average) published monthly by the Bureau of

Labor Statistics, United States Department of Labor, or its

successor in function. Permittees covered by Subsection (a) of

this section may not pool or combine their dollar limitations to

provide a retailer with advertising specialties valued in excess

of the maximum permitted under this subsection.

package store or wine only package store, nor the agent, servant,

or employee of the person, may allow an excessive discount on

liquor.

(d) A permittee covered under Subsection (a) may offer prizes,

premiums, or gifts to a consumer. The use of rebates or coupons

redeemable by the public for the purchase of alcoholic beverages

is prohibited. The holder of a winery permit may furnish to a

retailer without cost recipes, recipe books, book matches,

cocktail napkins, or other advertising items showing the name of

the winery furnishing the items or the brand name of the product

advertised if the individual cost of the items does not exceed

$1.

(e) A permittee covered under Subsection (a) may conduct a

sweepstakes promotion. A purchase or entry fee may not be

required of any person to enter a sweepstakes event authorized

under this subsection. A person affiliated with the alcoholic

beverage industry may not receive a prize from a sweepstakes

promotion.

(f) Notwithstanding Subsection (a) of this section, Section

108.05 of this code, or any other provision of this code, a

holder of a brewer's permit, nonresident brewer's permit,

distiller's and rectifier's permit, winery permit, nonresident

seller's permit, manufacturer's license, or nonresident

manufacturer's license may, in order to promote the brand name of

the permittee's or licensee's products, contract with a person

licensed under the Texas Racing Act (Article 179e, Vernon's Texas

Civil Statutes) for on-site advertising signs, for advertising in

programs, and to supplement purses for races even though the

licensees under that Act or the owners or operators of the racing

facilities also hold a mixed beverage permit or other permit or

license under this code. In addition, a permittee or licensee

described by this subsection may contract for off-site

advertising promoting specific races. A part of the cost of an

advertisement or promotion authorized by this section may not be

charged to or paid, directly or indirectly, by the holder of a

wholesale permit, general class B wholesaler's permit, local

class B wholesaler's permit, local distributor's permit, general

distributor's license, or local distributor's license, except

through the price paid by that holder for products purchased from

the holder's supplier.

(g) Subsection (a) does not prohibit a permittee covered under

Subsection (a) from prearranging or preannouncing a promotional

activity otherwise permitted by this code with a retailer about a

promotional activity to be held on the retailer's premises. A

holder of a wholesaler's or class B wholesaler's permit may

prearrange a promotional activity only for distilled spirits or

wine. Notwithstanding any other provision, a permittee may:

(1) preannounce a promotion to a consumer; or

(2) preannounce the purchase of wine or distilled spirits to a

consumer.

Acts 1977, 65th Leg., p. 500, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1979, 66th Leg., p. 2118, ch. 819, Sec. 11,

eff. June 13, 1979; Acts 1989, 71st Leg., ch. 859, Sec. 1, eff.

June 14, 1989; Acts 1993, 73rd Leg., ch. 934, Sec. 65, eff. Sept.

1, 1993; Acts 1999, 76th Leg., ch. 424, Sec. 1, eff. Sept. 1,

1999.

Amended by:

Acts 2005, 79th Leg., Ch.

236, Sec. 1, eff. September 1, 2005.

Acts 2007, 80th Leg., R.S., Ch.

1022, Sec. 1, eff. September 1, 2007.

Sec. 102.071. SALE OF GLASSWARE AND NONALCOHOLIC BEVERAGES. (a)

In this section:

(1) "Branded glassware" means glassware that contains the name,

emblem, or logo of or any reference to a brand of alcoholic

beverage.

(2) "Unbranded glassware" means glassware that does not contain

the name, emblem, or logo of or any reference to a brand of

alcoholic beverage.

(b) Notwithstanding Sections 102.04 and 102.07 or any other

provision of this code, the holder of a wholesaler's permit who

is primarily engaged in the wholesale sale of distilled spirits

and wine may sell branded or unbranded glassware to retailers,

provided that the glassware is not marketed or sold in a manner:

(1) to influence a retailer to purchase any quantity of

alcoholic beverages;

(2) to affect the terms by which a retailer may purchase

alcoholic beverages; or

(3) that threatens the independence of a retailer.

glassware bearing the name, emblem, or logo of a brand of

distilled spirits or wine by the holder of a wholesaler's permit

under Subsection (b).

(d) Sections 61.73 and 102.31 apply to payment for glassware

bearing the name, emblem, or logo of a brand of malt beverage by

the holder of a wholesaler's permit or a distributor's license.

(e) For the purposes of Subchapters C and D, the sale, by the

holder of a distributor's license, of a nonalcoholic beverage

produced or sold by a manufacturer of malt beverages and that

bears the name, emblem, logo, or brand of a manufacturer of malt

beverages is the same as a sale of beer.

Added by Acts 2009, 81st Leg., R.S., Ch.

196, Sec. 1, eff. September 1, 2009.

Sec. 102.08. WHOLESALER: LIQUOR MANUFACTURED BY AFFILIATE. (a)

No holder of a wholesaler's permit may own, possess, or sell any

liquor manufactured, distilled, or rectified by a person, firm,

or corporation that is directly or indirectly affiliated with the

wholesale permittee, regardless of whether the affiliation is

corporate, by management, direction, or control, or through an

officer, director, agent, or employee.

(b) This section does not apply to a holder of a wholesaler's

permit who held the permit on January 1, 1941, and has held it

continuously since that date, who was on that date selling liquor

manufactured, distilled, or rectified by such an affiliate.

Acts 1977, 65th Leg., p. 500, ch. 194, Sec. 1, eff. Sept. 1,

1977.

Sec. 102.09. WHOLESALER: INTEREST IN DISTILLER AND RECTIFIER.

No holder of a wholesaler's permit may be affiliated with the

holder of a distiller's and rectifier's permit, or with a person,

firm, or corporation engaged in distilling or rectifying liquor

inside or outside this state, regardless of whether the

affiliation is direct or indirect, through an officer, director,

agent, or employee, or by management, direction, or control.

Acts 1977, 65th Leg., p. 500, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1983, 68th Leg., p. 1353, ch. 278, Sec. 54,

eff. Sept. 1, 1983.

Sec. 102.10. DISTILLER AND RECTIFIER: INTEREST IN WHOLESALER.

(a) This section applies to the following:

(1) a holder of a distiller's and rectifier's permit;

(2) a person, firm, or corporation engaged in distilling or

rectifying liquor, either inside or outside this state;

(3) an officer, director, agent, or employee of an entity named

in Subdivision (1) or (2) of this subsection; or

(4) an affiliate of an entity named in Subdivision (1) or (2) of

this subsection, regardless of whether the affiliation is

corporate or by management, direction, or control.

(b) No entity named in Subsection (a) of this section may have

any interest in the permit, business, assets, or corporate stock

of a holder of a wholesaler's permit.

Acts 1977, 65th Leg., p. 500, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1983, 68th Leg., p. 1353, ch. 278, Sec. 55,

eff. Sept. 1, 1983.

Sec. 102.11. MANUFACTURER OR DISTRIBUTOR: PROHIBITED INTERESTS.

No manufacturer or distributor directly or indirectly, or through

a subsidiary, affiliate, agent, employee, officer, director, or

firm member, may:

(1) own any interest in the business or premises of a retail

dealer of beer;

(2) hold or have an interest in a license to sell brewery

products for on-premises consumption, except to the extent that a

manufacturer's license permits on-premises consumption.

Acts 1977, 65th Leg., p. 501, ch. 194, Sec. 1, eff. Sept. 1,

1977.

Sec. 102.12. COMMERCIAL BRIBERY BY MANUFACTURER OR DISTRIBUTOR.

No manufacturer or distributor directly or indirectly, or through

a subsidiary, affiliate, agent, employee, officer, director, or

firm member, may give or permit to be given money or any thing of

value in an effort to induce agents, employees, or

representatives of customers or prospective customers to

influence their employers or principals to purchase or contract

to purchase brewery products from the manufacturer or distributor

or to refrain from buying those products from other persons.

Acts 1977, 65th Leg., p. 501, ch. 194, Sec. 1, eff. Sept. 1,

1977.

Sec. 102.13. EXCLUSIVE OUTLET AGREEMENT AS TO BREWERY PRODUCTS.

No manufacturer or distributor directly or indirectly, or through

a subsidiary, affiliate, agent, employee, officer, director, or

firm member, may require, by agreement or otherwise, that a

retailer engaged in the sale of brewery products purchase any of

those products from him to the total or partial exclusion of the

products sold or offered for sale by a competitor or require the

retailer to take or dispose of a certain quota of the product.

Acts 1977, 65th Leg., p. 501, ch. 194, Sec. 1, eff. Sept. 1,

1977.

Sec. 102.14. MANUFACTURER OR DISTRIBUTOR: FURNISHING EQUIPMENT

OR FIXTURES. (a) No manufacturer or distributor directly or

indirectly, or through a subsidiary, affiliate, agent, employee,

officer, director, or firm member, may furnish, give, rent, lend,

or sell any equipment, fixtures, or supplies to a person engaged

in selling brewery products for on-premises consumption.

(b) This section does not apply to equipment, fixtures, or

supplies furnished, given, loaned, rented, or sold before

November 16, 1935, except that transactions made before that date

may not be used as consideration for an agreement made after that

date with respect to the purchase of brewery products. If a

manufacturer or distributor of brewery products or an agent or

employee of one of them removes the equipment, fixtures, or

supplies from the premises of the person to whom they were

furnished, given, loaned, rented, or sold, the exemption granted

by this subsection no longer applies to the equipment, fixtures,

or supplies.

manufacturer or distributor may, with written approval of the

administrator, sell for cash devices designed to extract brewery

products from legal containers subject to the following

conditions:

(1) the legal containers must not exceed a one-eighth barrel

capacity and must not be reused or refilled;

(2) the selling price of such devices may be no less than the

cost of acquisition to the manufacturer or distributor; and

(3) such devices which extract brewery products from legal

containers covered by this section may not be furnished, given,

rented, or sold by the manufacturer or distributor to a licensee

or permittee authorized to sell or serve brewery products for

on-premise consumption, or to the ultimate consumer.

Acts 1977, 65th Leg., p. 501, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1981, 67th Leg., p. 2664, ch. 719, Sec. 1,

eff. June 16, 1981.

Sec. 102.15. MANUFACTURER OR DISTRIBUTOR: PROHIBITED DEALINGS

WITH RETAILER. No manufacturer or distributor directly or

indirectly, or through a subsidiary, affiliate, agent, employee,

officer, director, or firm member, may:

(1) furnish, give, or lend any money or other thing of value to

a person engaged or about to be engaged in selling brewery

products for on-premises or off-premises consumption, or give the

person any money or thing of value for his use, benefit, or

relief; or

(2) guarantee the repayment of a loan or the fulfillment of a

financial obligation of a person engaged in or about to be

engaged in selling beer at retail.

Acts 1977, 65th Leg., p. 502, ch. 194, Sec. 1, eff. Sept. 1,

1977.

Sec. 102.16. UNLAWFUL AGREEMENTS. (a) A brewer, distiller and

rectifier, winery permittee, or alcoholic beverage manufacturer,

or the agent, servant, or employee of any of them, commits an

offense if he orally or in writing enters or offers to enter into

an agreement or other arrangement with a wholesaler or other

person in the state:

(1) by which a person is required or influenced, or that is

intended to require or influence a person, to purchase, otherwise

obtain, produce, or require a certain volume or quota of

business, more or less, of one or more types or brands of

alcoholic beverages, either in a certain area, in a certain

period of time, or on fulfillment of any condition; or

(2) to require or influence a person, or attempt to require or

influence a person, to sell an alcoholic beverage in a manner

contrary to law or in a manner calculated to induce a violation

of the law.

(b) The commission or administrator shall investigate suspected

violations of this section, and if either of them finds or has

good reason to believe that this section has been or is being

violated, the commission or administrator shall give the affected

parties notice of hearing as provided in this code. On finding

that a person has violated or is violating a provision of this

section, the commission or administrator shall enter an order

prohibiting the violator or his agents to directly or indirectly

ship any of his goods into the state for a period not to exceed

one year. No person may violate that order.

this section.

Acts 1977, 65th Leg., p. 502, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1983, 68th Leg., p. 1353, ch. 278, Sec. 56,

eff. Sept. 1, 1983.

Sec. 102.17. CONTRACT FOR SALE OF LIQUOR. A brewer, distiller

and rectifier, winery permittee, manufacturer, or nonresident

seller of liquor and the holder of a wholesaler's permit may

enter into a contract for the sale and purchase of a specified

quantity of liquor to be delivered over an agreed period of time,

but only if the contract is first submitted to the commission or

administrator and found by the commission or administrator not to

be calculated to induce a violation of this code.

Acts 1977, 65th Leg., p. 502, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1983, 68th Leg., p. 1354, ch. 278, Sec. 57,

eff. Sept. 1, 1983.

Sec. 102.18. MANUFACTURER: PROHIBITED INTERESTS. (a) This

section applies to the following:

(1) a holder of a manufacturer's or nonresident manufacturer's

license;

(2) an officer, director, agent, or employee of an entity named

in Subdivision (1) of this subsection; or

(3) an affiliate of an entity named in Subdivision (1) of this

subsection, regardless of whether the affiliation is corporate or

by management, direction, or control.

(b) No entity named in Subsection (a) of this section may have

any interest in the license, business, assets, or corporate stock

of a holder of a general, local, or branch distributor's license.

Added by Acts 1979, 66th Leg., p. 1973, ch. 777, Sec. 24, eff.

Aug. 27, 1979.

Sec. 102.19. PROMOTIONAL GIFT WINE. A holder of a winery permit

may give one or more unopened bottles of Texas-made wine produced

or bottled by the winery to a person 21 years of age or older on

the premises of a convention center or civic center that holds a

mixed beverage permit if no charge is made by the winery or by

the mixed beverage permittee for the wine. A recipient of a

bottle of wine under this section must take the unopened gift

bottle off the premises of the mixed beverage permittee.

Added by Acts 1993, 73rd Leg., ch. 649, Sec. 1, eff. Aug. 30,

1993.

Sec. 102.20. RESTOCKING AND ROTATION OF ALCOHOLIC BEVERAGES

AUTHORIZED. Restocking of a display and rotation of alcoholic

beverage stock in a retail establishment from the retailer's

storeroom, salesroom, display counter, or cooler by a

representative of a wholesaler or distributor is lawful. The

commission or administrator may publish guidelines regarding this

activity as the commission or administrator determines to be

necessary.

Added by Acts 1993, 73rd Leg., ch. 934, Sec. 66, eff. Sept. 1,

1993. Renumbered from Alcoholic Beverage Code Sec. 102.19 by Acts

1995, 74th Leg., ch. 76, Sec. 17.01(1), eff. Sept. 1, 1995.

Sec. 102.21. CONTINUITY OF CERTAIN PROTECTIONS FOR BEER

DISTRIBUTORS. The protections provided to beer distributors by

Subchapters C and D apply regardless of whether there is a

transfer or change of ownership of a brand at the manufacturing

level.

Added by Acts 2009, 81st Leg., R.S., Ch.

894, Sec. 1, eff. September 1, 2009.

SUBCHAPTER B. REGULATION OF CREDIT TRANSACTIONS

Sec. 102.31. CASH PAYMENT REQUIRED. (a) This section applies

to:

(1) the sale of beer or its containers or the original packages

in which it is received, packaged, or contained by a

distributor's licensee to a retail dealer's on-premise or

off-premise licensee, a wine and beer retailer's permittee, or a

wine and beer retailer's off-premise permittee; and

(2) the sale of malt beverages by a local distributor's

permittee, or by any licensee authorized to sell those beverages

for resale, to a mixed beverage or daily temporary mixed beverage

permittee.

(b) No person directly or indirectly, or through a subsidiary,

affiliate, agent, employee, officer, director, or firm member,

may make a sale covered by this section except for cash on or

before delivery to the purchaser.

extended to the purchaser violates this code. Acceptance of a

postdated check is not a cash sale, but a valid check or draft

payable on demand may be accepted as cash. If a check or draft is

accepted in payment, it must be deposited in the bank for payment

or presented for payment within two days after it is received. If

the check or draft is dishonored by the drawee, the licensee or

permittee who accepted it shall report that fact to the

commission within two days after receiving notice of dishonor.

The report shall be on a form prescribed by the commission and

shall contain any information the commission requires.

(d) Sundays and legal holidays are not counted in determining

time periods under this section.

(e) The commission may promulgate rules to give effect to this

section.

Acts 1977, 65th Leg., p. 502, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1979, 66th Leg., p. 55, ch. 33, Sec. 8,

eff. Aug. 27, 1979.

Sec. 102.32. SALE OF LIQUOR: CREDIT RESTRICTIONS. (a) In this

section:

(1) "Wholesale dealer" means a wholesaler, class B wholesaler,

winery, wine bottler, or local distributor's permittee.

(2) "Retailer" means a package store, wine only package store,

wine and beer retailers, wine and beer retailer's off-premise, or

mixed beverage permittee, any other retailer, or a private club

registration permittee.

(3) "Month" means a calendar month.

(b) No wholesale dealer may sell and no retailer may purchase

liquor except for cash or on terms requiring payment by the

retailer in accordance with Subsection (c) of this section.

payment must be made on or before the 25th day of that month. On

purchases made on the 16th through the last day of a month,

payment must be made on or before the 10th day of the following

month.

(d) Each delivery of liquor shall be accompanied by an invoice

giving the date of purchase. If a retailer becomes delinquent in

the payment of an account for liquor, the wholesale dealer

immediately shall report that fact in writing, including by

electronic mail or facsimile transmission, to the commission or

administrator. A wholesale dealer may not sell any liquor to a

retailer who is delinquent until the delinquent account is paid

in full and cleared from the records of the commission. An

account becomes delinquent if it is not paid when it is required

to be paid under Subsection (c).

(d-1) The commission or administrator may not accept the

voluntary cancellation or suspension of a permit or allow a

permit to be renewed or transferred if the permit holder is

delinquent in the payment of an account for liquor under this

section. A person whose permit is canceled by the commission or

whose permit has expired is not eligible to hold any other permit

or license under this code until the person has cured any

delinquency of the person under this section.

(e) A wholesale dealer who accepts a postdated check, a note or

memorandum, or participates in a scheme to assist a retailer in

the violation of this section commits an offense.

(f) The commission shall adopt rules and regulations to give

effect to this section.

Acts 1977, 65th Leg., p. 503, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1979, 66th Leg., p. 2119, ch. 819, Sec. 12,

eff. June 13, 1979.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

68, Sec. 22, eff. September 1, 2007.

Acts 2009, 81st Leg., R.S., Ch.

78, Sec. 1, eff. May 20, 2009.

SUBCHAPTER C. TERRITORIAL LIMITS ON SALE OF BEER

Sec. 102.51. SETTING OF TERRITORIAL LIMITS. (a) Each holder of

a manufacturer's or nonresident manufacturer's license shall

designate territorial limits in this state within which the

brands of beer the licensee manufactures may be sold by general,

local, or branch distributor's licensees.

(b) Each holder of a general, local, or branch distributor's

license shall enter into a written agreement with each

manufacturer from which the distributor purchases beer for

distribution and sale in this state setting forth the sales

territory within which each brand of beer purchased by that

distributor may be distributed and sold. No holder of a general,

local, or branch distributor's license shall make any sales of

any brand of beer outside the sales territory specified in the

written agreement. No such agreement shall interfere with the

rights of retailers to purchase beer as provided in Section

102.53. A manufacturer may not assign all or any part of the same

sales territory to more than one distributor. A copy of the

agreement and any amendments to it shall be filed with the

administrator.

state under the provisions of the Twenty-first Amendment to the

United States Constitution to promote the public interest in the

fair, efficient, and competitive distribution of beer, to

increase competition in such areas, and to assure product quality

control and accountability by allowing manufacturers to assign

sales territories within this state.

Acts 1977, 65th Leg., p. 504, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1983, 68th Leg., p. 5229, ch. 959, Sec. 1,

eff. Aug. 29, 1983; Acts 1995, 74th Leg., ch. 152, Sec. 1, eff.

May 19, 1995.

Sec. 102.52. RIGHTS OF DISTRIBUTORS. Nothing in Section 102.51

of this code limits or alters the right of a holder of a general,

local, or branch distributor's license to sell beer to any other

holder of a general, local, or branch distributor's license,

except that a distributor who has purchased beer from another

distributor may distribute and sell the beer only within a

territory for which the manufacturer of the brand has designated

that it may be sold by the general, local, or branch distributor

making the purchase.

Acts 1977, 65th Leg., p. 504, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1979, 66th Leg., p. 55, ch. 33, Sec. 9,

eff. Aug. 27, 1979; Acts 1993, 73rd Leg., ch. 934, Sec. 67, eff.

Sept. 1, 1993.

Sec. 102.53. RIGHTS OF RETAILERS. Nothing in Section 102.51 or

102.52 of this code limits or alters the right of a holder of a

retail license or permit to purchase beer at the licensed

premises of any general, local, or branch distributor's licensee

in the state and transport that beer to his licensed premises,

except that the retailer may sell the beer only within a

territory for which the manufacturer of the brand has designated

that it may be sold by a distributor.

Acts 1977, 65th Leg., p. 504, ch. 194, Sec. 1, eff. Sept. 1,

1977. Amended by Acts 1979, 66th Leg., p. 55, ch. 33, Sec. 10,

eff. Aug. 27, 1979.

Sec. 102.54. ADDITIONAL REQUIREMENTS FOR APPLICANTS FOR

DISTRIBUTOR'S LICENSE. (a) In addition to any other

requirements necessary for issuance or renewal of a distributor's

license, the commission or administrator shall require an

applicant for a license or a holder of a license to show that the

applicant or holder:

(1) has entered into or will acquire a written agreement

designating an assigned territory from a manufacturer in

accordance with this subchapter and Subchapter D;

(2) has received or has applied for and will maintain all

licenses or permits required to engage in business in the

assigned territory as a holder of a distributor's license,

including any state or federal licenses or permits;

(3) has ordered, received, and stored or has committed to order,

receive, and store a sufficient amount of beer that the

distributor is authorized to sell to ensure that the distributor

can supply the reasonable needs of all retailers in the assigned

territory;

(4) has received and stored or has committed to receive and

store beer received from a manufacturer in a manner complying

with a product quality control standard established by the

manufacturer or the commission; and

(5) has or will have the ability to sell, deliver, and promote

each brand of beer sold by the distributor to all retailers in

the assigned territory:

(A) in a manner that complies with the product quality control

standards of the manufacturer or of the commission; and

(B) on a continuing and recurring basis in response to

reasonable market demand for a brand of beer by the retailer or

the retailer's customers in the assigned territory.

(b) In determining whether an applicant for or holder of a

distributor's license meets the requirement of Subsection (a)(5),

the commission or administrator may require the applicant or

holder to show that the applicant or holder has or will have:

(1) storage facilities of a sufficient size to store each brand

of beer in an amount equal to the demand for the product from all

retailers in the holder's or applicant's assigned territory;

(2) an inventory or a commitment to acquire an inventory of each

brand of beer in an amount equal to the demand for the brand from

all retailers in the holder's or applicant's assigned territory;

(3) a sufficient number of employees to provide the holder or

applicant with the ability:

(A) to sell, deliver on a reasonably prompt basis, and promote

each brand of beer to all retailers in the holder's or

applicant's assigned territory; and

(B) to prepare and submit in a timely manner any fee or tax

payments or reports required by any authorized governmental

regulatory authority, including the Bureau of Alcohol, Tobacco,

and Firearms and the commission; and

(4) a sufficient number of delivery vehicles and rolling stock

to provide the holder or the applicant with the capability of

transporting, selling, delivering, or promoting each brand of

beer to all retailers in the assigned territory.

application for a distributor's license or shall refuse to renew

a distributor's license if the commission or administrator finds

the holder or applicant has failed to comply with any of the

requirements of Subsection (a) or (b).

(d) In this section:

(1) "Distributor" means a person who holds a license issued

under Chapter 64 or 65.

(2) "Manufacturer" means a person who holds a license issued

under Chapter 62 or 63.

(3) "Retailer" means a person who holds a permit or license

issued under Chapters 25 through 34, Chapter 48, Chapters 69

through 72, or Chapter 74.

Added by Acts 1995, 74th Leg., ch. 152, Sec. 2, eff. May 19,

1995.

Sec. 102.55. TERRITORIAL ASSIGNMENTS; DEFINITIONS. (a) In this

subchapter and Subchapter D, and as the terms relate to an

agreement between a manufacturer and a distributor describing the

sales territory in which a distributor may sell the beer of a

manufacturer:

(1) "Brand" means any word, name, group of letters, symbol, or

trademark or a combination of any word, name, group of letters,

symbol, or trademark that is adopted and used by a manufacturer

on a label or on packaging to identify a specific beer or malt

beverage and to distinguish the beer or malt beverage product

from the label or packaging of another beer or malt beverage

produced or marketed by any manufacturer. The term does not

include the name of the manufacturer unless the name of the

manufacturer is included in the name of the brand.

(2) "Brand extension" means a brand that incorporates a brand

name or brand logo, or a substantial part of an existing brand

name or brand logo, of the same manufacturer.

(b) A brand extension is not a new or different brand.

distributor to whom the brand was originally assigned, if the

distributor elects to distribute and sell the brand extension.

Added by Acts 1995, 74th Leg., ch. 152, Sec. 2, eff. May 19,

1995.

Sec. 102.56. APPLICATION OF TERRITORIAL LIMITS TO CERTAIN PERMIT

HOLDERS. (a) This section applies only to a holder of a local

distributor's permit under Chapter 23 that operates in a county

in which 8,000 or more alcoholic beverage licenses or permits of

any type have been issued under this code and are in effect.

Subsections (b) and (d) apply only to the delivery of a brand of

ale, beer, or malt liquor to a holder of a mixed beverage permit

or a private club permit whose premises is located in a county in

which 8,000 or more alcoholic beverage licenses or permits of any

type have been issued under this code and are in effect.

(b) A holder of a local distributor's permit under Chapter 23

who has purchased a brand of ale, beer, or malt liquor from the

holder of a general, local, or branch distributor's license or

from the holder of a general class B wholesaler's or local class

B wholesaler's permit may not deliver the brand of ale, beer, or

malt liquor to any holder of a mixed beverage permit or private

club permit whose premises is located inside that county and

outside the territory assigned to the distributor or wholesaler

who sold the product under a territorial limit agreement

authorized by this subchapter.

distributor's permit may purchase a brand of ale, beer, or malt

liquor only from a distributor or wholesaler who has been

assigned the territory where the premises of the holder of the

local distributor's permit is located.

(d) A holder of a local distributor's permit who delivers a

brand of ale, beer, or malt liquor to a holder of a mixed

beverage permit or private club permit whose premises is located

inside that county and outside the assigned territory where the

premises of the holder of a local distributor's permit is located

must purchase the brand of ale, beer, or malt liquor from a

distributor or wholesaler who has been assigned the territory

where the premises of the holder of the mixed beverage or private

club permit is located.

Added by Acts 1997, 75th Leg., ch. 1164, Sec. 1, eff. Sept. 1,

1997.

SUBCHAPTER D. BEER INDUSTRY FAIR DEALING LAW

Sec. 102.71. DEFINITIONS. In this subchapter:

(1) "This Act" means this subchapter which shall have the short

title and may be cited as the "Beer Industry Fair Dealing Law."

(2) "Agreement" means any contract, agreement, or arrangement,

whether expressed or implied, whether oral or written, for a

definite or indefinite period between a manufacturer and a

distributor pursuant to which a distributor has the right to

purchase, resell, and distribute any brand or brands of beer

offered by a manufacturer.

(3) "Distributor" means those persons licensed under Section

64.01 or 65.01 of this code.

(4) "Manufacturer" means those persons licensed under Section

62.01 or 63.01 of this code.

(5) "Territory" or "sales territory" means the geographic area

of distribution and sale responsibility designated by an

agreement between a distributor and manufacturer, as provided in

Section 102.51 of this code, for any brands of the manufacturer.

(6) "Good cause" means the failure by any party to an agreement,

without reasonable excuse or justification, to comply

substantially with an essential, reasonable, and commercially

acceptable requirement imposed by the other party under the terms

of an agreement.

Added by Acts 1981, 67th Leg., p. 60, ch. 26, Sec. 1, eff. April

8, 1981.

Sec. 102.72. PURPOSES. (a) This Act is promulgated pursuant to

authority of the state under the provisions of the 21st amendment

to the United States Constitution to promote the public's

interest in the fair, efficient, and competitive distribution of

beer within this state by requiring manufacturers and

distributors to conduct their business relations so as to assure:

(1) that the beer distributor is free to manage its business

enterprise, including the right to independently establish its

selling prices; and

(2) that the public, retailers, and manufacturers are served by

distributors who will devote their reasonable efforts and

resources to the sales and distribution of all the manufacturer's

products which the distributor has the right to sell and

distribute and maintain satisfactory sales levels in the sales

territory assigned the distributor.

(b) This Act shall govern all relations between manufacturers

and their distributors, including any renewals or amendments to

agreements between them, to the full extent consistent with the

constitutions and laws of this state and the United States.

agreement purporting to do so is void and unenforceable to the

extent of such variance only.

Added by Acts 1981, 67th Leg., p. 60, ch. 26, Sec. 1, eff. April

8, 1981.

Sec. 102.73. TERMINATION AND NOTICE OF CANCELLATION. (a)

Except as provided in Subsection (c) of this section, and except

as may be specifically agreed upon at the time by the parties, no

manufacturer or beer distributor may cancel, fail to renew, or

otherwise terminate an agreement unless the manufacturer or

distributor furnishes prior notification in accordance with

Subsection (b) of this section to the affected party.

(b) The notification required under Subsection (a) of this

section shall be in writing and must be received by the affected

party not less than 90 days before the date on which the

agreement will be cancelled, not renewed, or otherwise

terminated. Such notification shall contain a statement of

intention to cancel, failure to renew, or otherwise terminate an

agreement, a statement of reasons therefor, and the date on which

such action shall take effect.

otherwise terminate an agreement without furnishing any prior

notification for any of the following reasons:

(1) in the event of insolvency or bankruptcy or dissolution or

liquidation of the other party;

(2) in the event the other party shall make an assignment for

the benefit of creditors or similar disposition of substantially

all of the assets of such party's business;

(3) in the event of a conviction or plea of guilty or no contest

to a charge of violating a law or regulation or the revocation or

suspension of a license or permit for a period of 30 days or more

relating to the business and which materially and adversely

affects the party's ability to continue in business; or

(4) in the event of the failure to pay amounts owing the other

when due, upon demand therefor, in accordance with agreed payment

terms.

Added by Acts 1981, 67th Leg., p. 60, ch. 26, Sec. 1, eff. April

8, 1981.

Sec. 102.74. CANCELLATION. No manufacturer or beer distributor

may cancel, fail to renew, or otherwise terminate an agreement

unless the party intending such action has good cause for such

cancellation, failure to renew, or termination and, in any case

in which prior notification is required under Section 102.73 of

this code, the party intending to act has furnished said prior

notification and the affected party has not eliminated the

reasons specified in such notification as the reasons for

cancellation, failure to renew, or termination within 90 days

after the receipt of such notification.

Added by Acts 1981, 67th Leg., p. 60, ch. 26, Sec. 1, eff. April

8, 1981.

Sec. 102.75. PROHIBITED CONDUCT. No manufacturer shall:

(1) induce or coerce, or attempt to induce or coerce, any

distributor to engage in any illegal act or course of conduct;

(2) require a distributor to assent to any unreasonable

requirement, condition, understanding, or term of an agreement

prohibiting a distributor from selling the product of any other

manufacturer or manufacturers;

(3) fix or maintain the price at which a distributor may resell

beer;

(4) fail to provide to each distributor of its brands a written

contract which embodies the manufacturer's agreement with its

distributor;

(5) require any distributor to accept delivery of any beer or

any other item or commodity which shall not have been ordered by

the distributor.

Added by Acts 1981, 67th Leg., p. 60, ch. 26, Sec. 1, eff. April

8, 1981.

Sec. 102.76. TRANSFER OF BUSINESS ASSETS OR STOCK. (a) No

manufacturer shall unreasonably withhold or delay its approval of

any assignment, sale, or transfer of the stock of a distributor

or all or any portion of a distributor's assets, distributor's

voting stock, the voting stock of any parent corporation, or the

beneficial ownership or control of any other entity owning or

controlling the distributor, including the distributor's rights

and obligations under the terms of an agreement whenever the

person or persons to be substituted meet reasonable standards

imposed not only upon the distributor but upon all other

distributors of that manufacturer of the same general class,

taking into account the size and location of the sales territory

and market to be served. Upon the death of one of the partners of

a partnership operating the business of a distributor, no

manufacturer shall deny the surviving partner or partners of such

partnership the right to become a successor-in-interest to the

agreement between the manufacturer and such partnership. Provided

that the survivor has been active in the management of the

partnership and/or is otherwise capable of carrying on the

business of the partnership.

(b) Notwithstanding the provisions of Subsection (a) of this

section, upon the death of a distributor no manufacturer shall

deny approval for any transfer of ownership to a surviving spouse

or adult child of an owner of a distributor; provided, however,

that such subsequent transfers of such ownership by such

surviving spouse or adult child shall thereafter be subject to

the provisions of Subsection (a) of this section.

Added by Acts 1981, 67th Leg., p. 60, ch. 26, Sec. 1, eff. April

8, 1981.

Sec. 102.77. REASONABLE COMPENSATION. (a) Any manufacturer

who, without good cause, cancels, terminates, or fails to renew

any agreement, or unlawfully denies approval of, or unreasonably

withholds consent, to any assignment, transfer, or sale of a

distributor's business assets or voting stock or other equity

securities, shall pay such distributor with whom it has an

agreement pursuant to Section 102.51 of this code the fair market

value of the distributor's business with relation to the affected

brand or brands. In determining fair market value, consideration

shall be given to all elements of value, including but not

limited to goodwill and going concern value.

(b) In the event that the manufacturer and the distributor are

unable to mutually agree on whether or not good cause exists for

cancellation under Section 102.74 of this code or on the

reasonable compensation to be paid for the value of the

distributor's business, as defined herein, the matter may, at the

option of either the distributor or manufacturer, be submitted to

three arbitrators, one of whom shall be named in writing by each

party and the third of whom shall be chosen by the two arbiters

so selected. Should the arbiters selected fail to choose a third

arbiter within 10 days, a judge of a district court in the county

in which the distributor's principal place of business is located

shall select the third arbiter. Arbitration shall be conducted in

accordance with the Texas General Arbitration Act, as amended

(Article 224, Revised Civil Statutes of Texas, 1925). Arbitration

costs shall be paid one-half by the distributor and one-half by

the manufacturer. The award of the arbitrators shall be binding

on the parties unless appealed within 10 days from the date of

the award. All proceedings on appeal shall be in accordance with

and governed by the Texas General Arbitration Act, as amended

(Article 224, Revised Civil Statutes of Texas, 1925).

Added by Acts 1981, 67th Leg., p. 60, ch. 26, Sec. 1, eff. April

8, 1981.

Sec. 102.78. RIGHT OF FREE ASSOCIATION. No manufacturer or

distributor shall restrict or inhibit, directly or indirectly,

the right of free association among manufacturers or distributors

for any lawful purpose.

Added by Acts 1981, 67th Leg., p. 60, ch. 26, Sec. 1, eff. April

8, 1981.

Sec. 102.79. JUDICIAL REMEDIES. (a) If a manufacturer or

distributor who is a party to an agreement pursuant to Section

102.51 of this code fails to comply with this Act or otherwise

engages in conduct prohibited under this Act, or if a

manufacturer and distributor are not able to mutually agree on

reasonable compensation under Section 102.77 of this code and the

matter is not to be submitted to arbitration, the aggrieved

manufacturer or distributor may maintain a civil action in a

court of competent jurisdiction in the county in which the

distributor's principal place of business is located.

(b) In any action under Subsection (a) of this section, the

court may grant such relief as the court determines is necessary

or appropriate considering the purposes of this Act.

this section shall be entitled to actual damages, including the

value of the distributor's business, as specified in Section

102.77 of this code, reasonable attorney's fees, and court costs.

Added by Acts 1981, 67th Leg., p. 60, ch. 26, Sec. 1, eff. April

8, 1981.

Sec. 102.80. COVERAGE AND EFFECTIVE DATE. This Act shall cover

agreements in existence on the date of enactment of this Act and

also shall apply to agreements entered into and any cancellation,

termination, failure to renew, amendment, or material

modification of any agreement occurring after the date of

enactment of this Act.

Added by Acts 1981, 67th Leg., p. 60, ch. 26, Sec. 1, eff. April

8, 1981.

Sec. 102.81. ALE AND MALT LIQUOR. This subchapter and

Subchapter C of this chapter apply to agreements concerning ale

and malt liquor in the same manner as they apply to agreements

concerning beer, and each particular class of permittee dealing

with ale and malt liquor is subject to those provisions that

apply to functionally corresponding licensees within the beer

industry.

Added by Acts 1987, 70th Leg., ch. 303, Sec. 4, eff. June 11,

1987.

Sec. 102.82. STATUTE OF LIMITATIONS. A person must bring suit

on an action arising under this chapter not later than four years

after the day the cause of action accrues. If a termination

related to a change in ownership of the brand occurs, the cause

of action accrues when either the new brand owner or the

transferring or selling brand owner provides notice of

termination to the distributor.

Added by Acts 2009, 81st Leg., R.S., Ch.

894, Sec. 3, eff. September 1, 2009.

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

State Codes and Statutes

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