§ 32B-4-705. Exclusions from tied house prohibitions.

(1) Notwithstanding Subsection 32B-4-704(3), a thing of value may be furnished by an industry member to a retailer under the conditions and within the limitations prescribed in:

(a) this section; and

(b) the applicable federal laws cited in this section.

(2) The following may be furnished by an industry member:

(a) a product display as provided in 27 C.F.R. Sec. 6.83;

(b) point of sale advertising material or a consumer advertising specialty as provided in 27 C.F.R. Sec. 6.84;

(c) a thing of value to a temporary retailer to the extent allowed in 27 C.F.R. Sec. 6.85;

(d) equipment and supplies as provided in 27 C.F.R. Sec. 6.88;

(e) combination packaging as provided in 27 C.F.R. Sec. 6.93;

(f) an educational seminar as provided in 27 C.F.R. Sec. 6.94;

(g) a consumer promotion as provided in 27 C.F.R. Sec. 6.96;

(h) an advertising service as provided in 27 C.F.R. Sec. 6.98;

(i) stocking, rotation, and pricing service as provided in 27 C.F.R. Sec. 6.99;

(j) merchandise as provided in 27 C.F.R. Sec. 6.101; and

(k) an outside sign as provided in 27 C.F.R. Sec. 6.102.

(3) The following exceptions provided in federal law are not applicable:

(a) the exception for a sample as provided in 27 C.F.R. Sec. 6.91;

(b) the exception for a consumer tasting or sampling at a retail establishment as provided in 27 C.F.R. Sec. 6.95; and

(c) the exception for participation in a retailer association activity provided in 27 C.F.R. Sec. 6.100.

(4) To the extent required by 27 C.F.R. Sec. 6.81(b) an industry member shall maintain a record:

(a) of an item furnished to a retailer;

(b) on the premises of the industry member; and

(c) for a three-year period.

(5) A sample of liquor may be provided to the department under the following conditions:

(a) With the department's permission, an industry member may submit a department sample to the department for product testing, analysis, and sampling.

(b) No more than two department samples of a particular type, vintage, and production lot of a particular branded product may be submitted to the department for department testing, analysis, and sampling within a consecutive 120-day period.

(c)

(i) A department sample may not exceed 1 liter.

(ii) Notwithstanding Subsection (5)(c)(i), a department sample of the following may not exceed 1.5 liters unless that exact alcoholic product is only commercially packaged in a larger size, not to exceed 5 liters:

(A) wine;

(B) heavy beer; or

(C) a flavored malt beverage.

(d) A department sample submitted to the department:

(i) shall be shipped prepaid by the industry member by common carrier; and

(ii) may not be shipped by United States mail directly to the department's central administrative warehouse office.

(e) A department sample may not be shipped to any other location within the state.

(f) The industry member shall submit with a department sample submitted to the department a letter from the industry member that clearly:

(i) identifies the product as a "department sample"; and

(ii) states the FOB case price of the product.

(g)

(i) The department may transfer a listed item from current stock:

(A) for use as a comparison control sample; or

(B) to verify product spoilage as considered appropriate.

(ii) The department shall charge back a sample transferred under this Subsection (5)(g) to the respective industry member.

(h) The department shall:

(i) account for, label, and record a department sample received or transferred;

(ii) account for the department sample's disposition; and

(iii) maintain a record of the sample and its disposition for a two-year period.

(i) The department shall affix to each container of a department sample a label clearly identifying the product as a "department sample."

(j) The department shall dispose of a department sample delivered to the department or transferred from the department's current stock in one of the following ways as chosen by the department:

(i) test and analyze the department sample, with the remaining contents destroyed under controlled and audited conditions established by the department;

(ii) destroy the entire contents of the department sample under controlled and audited conditions established by the department; or

(iii) add the department sample to the inventory of the department for sale to the public.

(k) A person other than an authorized department official may not be in possession of a department sample except as otherwise provided.

(l) The department shall handle a liquor item received by the department from a supplier that is not designated as a sample by the supplier, but that is an item not specifically listed on a department purchase order, in accordance with this Subsection (5).

(m) The department may not use its money to pay freight or charges on a sample or a liquor item:

(i) shipped to the department by a supplier; and

(ii) not listed on a department purchase order.

(6) A sample of beer may be provided by a beer industry member to a retailer under the conditions listed in this Subsection (6).

(a) A sample of beer may be provided by an industry member only to a retailer who has not purchased the brand of beer from that industry member within the last 12 months.

(b) For each retailer, the industry member may give not more than three gallons of any brand of beer, except that if a particular product is not available in a size within the quantity limitation, an industry member may furnish the next largest size.

(7) An educational seminar may involve an industry member under the conditions listed in this Subsection (7).

(a) An industry member may provide or participate in an educational seminar:

(i) involving:

(A) the department;

(B) a retailer;

(C) a holder of a scientific or educational special use permit;

(D) another industry member; or

(E) an employee of a person listed in Subsections (7)(a)(i)(A) through (D); and

(ii) regarding a topic such as:

(A) merchandising and product knowledge;

(B) use of equipment; and

(C) a tour of an alcoholic product manufacturing facility.

(b) An industry member may not pay the expenses of or compensate a person who is a department employee, a retailer, or a permittee for attending a seminar or tour described in Subsection (7)(a).

(8)

(a) A liquor industry member may conduct a tasting of a liquor product of the industry member:

(i) for the department, at the department's request; and

(ii) for a licensed industry representative, but only at the department's central administrative warehouse office.

(b) A liquor industry member may only use a department sample or industry representative sample when conducting a tasting of the industry member's liquor product.

(c) A beer industry member may conduct a tasting of a beer product for a beer retailer either at:

(i) the industry member's premises; or

(ii) a retail establishment.

(d) Except to the extent authorized by commission rule, an alcoholic product industry member may not conduct tasting or sampling activities with:

(i) a retailer; or

(ii) a member of the general public.

(9) A beer industry member may participate in a beer retailer association activity to the extent authorized by 27 C.F.R. Sec. 6.100.

(10)

(a) An industry member may contribute to a charitable, civic, religious, fraternal, educational, or community activity, except the contribution may not be given to influence a retailer in the selection of a product that may be sold at the activity.

(b) An industry member or retailer violates this Subsection (10) if:

(i) the industry member's contribution influences, directly or indirectly, the retailer in the selection of a product; and

(ii) a competitor's product is excluded in whole or in part from sale at the activity.

(11)

(a) An industry member may lease or furnish equipment listed in Subsection (11)(b) to a retailer if:

(i) the equipment is leased or furnished for a special event;

(ii) a reasonable rental or service fee is charged for the equipment; and

(iii) the period for which the equipment is leased or furnished does not exceed 30 days.

(b) This Subsection (11) applies to the following equipment:

(i) a picnic pump;

(ii) a cold plate;

(iii) a tub;

(iv) a keg box;

(v) a refrigerated trailer;

(vi) a refrigerated van; or

(vii) a refrigerated draft system.

(12)

(a) A liquor industry member may assist the department in:

(i) ordering, shipping, and delivering merchandise;

(ii) new product notification;

(iii) listing and delisting information;

(iv) price quotations;

(v) product sales analysis;

(vi) shelf management; and

(vii) an educational seminar.

(b)

(i) A liquor industry member may, to acquire a new listing:

(A) solicit an order from the department; and

(B) submit to the department a sample of the liquor industry member's products under Subsection (5) and price lists.

(ii)

(A) An industry member is confined to the customer areas when the industry member visits a state store or package agency unless otherwise approved.

(B) An industry member is confined to the office area of a state warehouse when the industry member visits a state warehouse unless otherwise approved.

(13) A beer industry member may assist a beer retailer in:

(a) ordering, shipping, and delivering beer merchandise;

(b) new product notification;

(c) listing and delisting information;

(d) price quotations;

(e) product sales analysis;

(f) shelf management; and

(g) an educational seminar.

(14) A beer industry member may, to acquire a new listing:

(a) solicit an order from a beer retailer; and

(b) submit to a beer retailer a sample of the beer industry member's beer products under Subsection (5) and price lists.

Amended by Chapter 307, 2011 General Session
Amended by Chapter 334, 2011 General Session