Alcohol Distributors’ Discounts Under Florida Law
Florida’s “Tied House Evil” Law—Florida Statutes Section 561.42—generally prohibits alcoholic beverage distributors from having any financial interest, directly or indirectly, in the business of an alcoholic beverage vendor. It also prohibits distributors from assisting any vendor by gifts or loans of money or property “or by giving of any rebates of any kind whatsoever.” However, an exception is made in the Florida Beverage Laws so that distributors are allows to give price discounts to the vendors to which they sell.
As is so often the case, though, Florida’s rules around distributors’ discounts are different for wine and spirits, on the one hand, and beer on the other.
For Wine and Liquor, Broad Freedom on Trade Discounts
When it comes to the distribution of wine and spirits, distributors have greater freedom to provide discounts to vendors. Subsection 6 of the Tied House Evil Law (Florida Statutes Section 561.42(6)) provides: “Nothing herein shall be taken to forbid the giving of trade discounts in the usual course of business upon wine and liquor sales.” “Trade discounts” are defined by Black’s Law Dictionary as “a discount from list price offered to all customers of a given type; e.g. discount offered by lumber dealer to building contractor.” Accordingly, distributors may offer vendors trade discounts for any purpose or with any criteria, provided they are offered on the usual course of business.
In addition, distributors are not required to publicly disclose the trade discounts they offer on wine and liquor, unlike discounts on beer.
For Beer, Trade Discounts are Limited and Public
The story is different for distributors’ sales discounts on beer. Chapter 563 of the Florida Statutes, which specifically addresses beer and malt beverages, limits discounts–also referred to as price differentials–to certain criteria. Florida Statutes Section 563.065 provides that distributors may offer discounts on the sale of beer to vendors only on the basis of one or more of the following four criteria:
- The vendor’s county.
- The location of the distributor’s warehouse supplying the vendor.
- Whether the vendor sells beer for on premises consumption or off premises consumption.
- The quantity of beer sold to the vendor.
In addition, all discounts on beer must be reported in advance to the Florida Division of Alcohol and Tobacco (ABT). These reports of discounts are publicly available on the ABT’s Beer Price Notices web page.
Do you have questions about alcoholic beverage distributors’ price discounts in Florida? Contact us at email@example.com to schedule a consultation.
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