Bill Text: IL SB2130 | 2021-2022 | 102nd General Assembly | Introduced
Bill Title: Amends the Liquor Control Act of 1934. Provides that a verified written list of delinquent retail licensees shall be developed, administered, and maintained only by the Illinois Liquor Control Commission. Provides that determinations of delinquency or nondelinquency shall be made only by the State Commission and shall be made only after determining there is not a bona fide dispute between such retail licensee and the manufacturer, importing distributor, or distributor with respect to the amount of the indebtedness existing because of such alleged sale. Adds provisions concerning cooperative purchasing agreements, quantity discount programs, credit or rebate programs, and combination sales offers. Effective immediately.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced - Dead) 2022-06-15 - Chief Sponsor Changed to Sen. Don Harmon [SB2130 Detail]
Download: Illinois-2021-SB2130-Introduced.html
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1 | AN ACT concerning liquor.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Liquor Control Act of 1934 is amended by | |||||||||||||||||||||||||||||
5 | changing Section 6-5 and by adding Sections 6-9.5, 6-9.10, | |||||||||||||||||||||||||||||
6 | 6-9.15, 6-9.20, and 6-9.25 as follows:
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7 | (235 ILCS 5/6-5) (from Ch. 43, par. 122)
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8 | Sec. 6-5.
Except as otherwise provided in this Section, it | |||||||||||||||||||||||||||||
9 | is unlawful
for any person having a retailer's license or
any | |||||||||||||||||||||||||||||
10 | officer, associate, member, representative or agent of such | |||||||||||||||||||||||||||||
11 | licensee
to accept, receive or borrow money, or anything else | |||||||||||||||||||||||||||||
12 | of value, or accept
or receive credit (other than | |||||||||||||||||||||||||||||
13 | merchandising credit in the ordinary
course of business for a | |||||||||||||||||||||||||||||
14 | period not to exceed 30 days) directly or
indirectly from any | |||||||||||||||||||||||||||||
15 | manufacturer, importing distributor or distributor
of | |||||||||||||||||||||||||||||
16 | alcoholic liquor, or from any person connected with or in any | |||||||||||||||||||||||||||||
17 | way
representing, or from any member of the family of, such | |||||||||||||||||||||||||||||
18 | manufacturer,
importing distributor, distributor or | |||||||||||||||||||||||||||||
19 | wholesaler, or from any
stockholders in any corporation | |||||||||||||||||||||||||||||
20 | engaged in manufacturing, distributing
or wholesaling of such | |||||||||||||||||||||||||||||
21 | liquor, or from any officer, manager, agent or
representative | |||||||||||||||||||||||||||||
22 | of said manufacturer. Except as provided below, it is
unlawful | |||||||||||||||||||||||||||||
23 | for any manufacturer
or distributor or importing distributor |
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1 | to give or lend money or
anything of value, or otherwise loan | ||||||
2 | or extend credit (except such
merchandising credit) directly | ||||||
3 | or indirectly to any retail licensee or
to the manager, | ||||||
4 | representative, agent, officer or director of such
licensee. A | ||||||
5 | manufacturer, distributor or importing distributor may furnish
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6 | free advertising, posters,
signs, brochures, hand-outs, or | ||||||
7 | other promotional devices or materials to
any unit of | ||||||
8 | government owning or operating any auditorium, exhibition | ||||||
9 | hall,
recreation facility or other similar facility holding a | ||||||
10 | retailer's license,
provided that the primary purpose of such | ||||||
11 | promotional devices or materials
is to promote public events | ||||||
12 | being held at such facility. A unit of government
owning or | ||||||
13 | operating such a facility holding a retailer's license may | ||||||
14 | accept
such promotional devices or materials designed | ||||||
15 | primarily to promote public
events held at the facility. No | ||||||
16 | retail licensee delinquent beyond the
30 day period specified | ||||||
17 | in this Section shall
solicit, accept or receive credit, | ||||||
18 | purchase or acquire alcoholic
liquors, directly or indirectly | ||||||
19 | from any other licensee, and no
manufacturer, distributor or | ||||||
20 | importing distributor shall knowingly grant
or extend credit, | ||||||
21 | sell, furnish or supply alcoholic liquors to any such
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22 | delinquent retail licensee; provided that the purchase price | ||||||
23 | of all beer
sold to a retail licensee shall be paid by the | ||||||
24 | retail licensee in cash
on or before delivery of the beer, and | ||||||
25 | unless the purchase price payable
by a retail licensee for | ||||||
26 | beer sold to him in returnable bottles shall
expressly include |
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1 | a charge for the bottles and cases, the retail
licensee shall, | ||||||
2 | on or before delivery of such beer, pay the seller in
cash a | ||||||
3 | deposit in an amount not less than the deposit required to be
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4 | paid by the distributor to the brewer; but where the brewer | ||||||
5 | sells direct
to the retailer, the deposit shall be an amount no | ||||||
6 | less than that
required by the brewer from his own | ||||||
7 | distributors; and provided further,
that in no instance shall | ||||||
8 | this deposit be less than 50 cents for each
case of beer in | ||||||
9 | pint or smaller bottles and 60 cents for each case of
beer in | ||||||
10 | quart or half-gallon bottles; and provided further, that the
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11 | purchase price of all beer sold to an importing distributor or
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12 | distributor shall be paid by such importing distributor or | ||||||
13 | distributor
in cash on or before the 15th day (Sundays and | ||||||
14 | holidays excepted) after
delivery of such beer to such | ||||||
15 | purchaser; and unless the purchase price
payable by such | ||||||
16 | importing distributor or distributor for beer sold in
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17 | returnable bottles and cases shall expressly include a charge | ||||||
18 | for the
bottles and cases, such importing distributor or | ||||||
19 | distributor shall, on
or before the 15th day (Sundays and | ||||||
20 | holidays excepted) after delivery of
such beer to such | ||||||
21 | purchaser, pay the seller in cash a required amount as
a | ||||||
22 | deposit to assure the return of such bottles and cases. | ||||||
23 | Nothing herein
contained shall prohibit any licensee from | ||||||
24 | crediting or refunding to a
purchaser the actual amount of | ||||||
25 | money paid for bottles, cases, kegs or
barrels returned by the | ||||||
26 | purchaser to the seller or paid by the purchaser
as a deposit |
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1 | on bottles, cases, kegs or barrels, when such containers or
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2 | packages are returned to the seller. Nothing herein contained | ||||||
3 | shall
prohibit any manufacturer, importing distributor or | ||||||
4 | distributor from
extending usual and customary credit for | ||||||
5 | alcoholic liquor sold to
customers or purchasers who live in | ||||||
6 | or maintain places of business
outside of this State when such | ||||||
7 | alcoholic liquor is actually transported
and delivered to such | ||||||
8 | points outside of this State.
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9 | A manufacturer, distributor, or importing distributor may | ||||||
10 | furnish free social media advertising to a retail licensee if | ||||||
11 | the social media advertisement does not contain the retail | ||||||
12 | price of any alcoholic liquor and the social media | ||||||
13 | advertisement complies with any applicable rules or | ||||||
14 | regulations issued by the Alcohol and Tobacco Tax and Trade | ||||||
15 | Bureau of the United States Department of the Treasury. A | ||||||
16 | manufacturer, distributor, or importing distributor may list | ||||||
17 | the names of one or more unaffiliated retailers in the | ||||||
18 | advertisement of alcoholic liquor through social media. | ||||||
19 | Nothing in this Section shall prohibit a retailer from | ||||||
20 | communicating with a manufacturer, distributor, or importing | ||||||
21 | distributor on social media or sharing media on the social | ||||||
22 | media of a manufacturer, distributor, or importing | ||||||
23 | distributor. A retailer may request free social media | ||||||
24 | advertising from a manufacturer, distributor, or importing | ||||||
25 | distributor. Nothing in this Section shall prohibit a | ||||||
26 | manufacturer, distributor, or importing distributor from |
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1 | sharing, reposting, or otherwise forwarding a social media | ||||||
2 | post by a retail licensee, so long as the sharing, reposting, | ||||||
3 | or forwarding of the social media post does not contain the | ||||||
4 | retail price of any alcoholic liquor. No manufacturer, | ||||||
5 | distributor, or importing distributor shall pay or reimburse a | ||||||
6 | retailer, directly or indirectly, for any social media | ||||||
7 | advertising services, except as specifically permitted in this | ||||||
8 | Act. No retailer shall accept any payment or reimbursement, | ||||||
9 | directly or indirectly, for any social media advertising | ||||||
10 | services offered by a manufacturer, distributor, or importing | ||||||
11 | distributor, except as specifically permitted in this Act. For | ||||||
12 | the purposes of this Section, "social media" means a service, | ||||||
13 | platform, or site where users communicate with one another and | ||||||
14 | share media, such as pictures, videos, music, and blogs, with | ||||||
15 | other users free of charge. | ||||||
16 | No right of action shall exist for the collection of any | ||||||
17 | claim based
upon credit extended to a distributor, importing | ||||||
18 | distributor or retail
licensee contrary to the provisions of | ||||||
19 | this Section.
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20 | Every manufacturer, importing distributor and distributor | ||||||
21 | shall
submit or cause to be submitted, to the State | ||||||
22 | Commission, in triplicate,
not later than Thursday of each | ||||||
23 | calendar week, a verified written list
of the names and | ||||||
24 | respective addresses of each retail licensee purchasing
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25 | spirits or wine from such manufacturer, importing distributor | ||||||
26 | or
distributor who, on the first business day of that calendar |
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1 | week, was
delinquent beyond the above mentioned permissible | ||||||
2 | merchandising credit
period of 30 days; or, if such is the | ||||||
3 | fact, a verified written statement
that no retail licensee | ||||||
4 | purchasing spirits or wine was then delinquent
beyond such | ||||||
5 | permissible merchandising credit period of 30 days.
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6 | Every manufacturer, importing distributor and distributor | ||||||
7 | shall
submit or cause to be submitted, to the State | ||||||
8 | Commission, in triplicate,
a verified written list of the | ||||||
9 | names and respective addresses of each
previously reported | ||||||
10 | delinquent retail licensee who has cured such
delinquency by | ||||||
11 | payment, which list shall be submitted not later than the
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12 | close of the second full business day following the day such | ||||||
13 | delinquency
was so cured.
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14 | The verified written list of delinquent retail licensees | ||||||
15 | shall be developed, administered, and maintained only by the | ||||||
16 | State Commission. Determinations of delinquency or | ||||||
17 | nondelinquency shall be made only by the State Commission and | ||||||
18 | shall be made only after determining there is not a bona fide | ||||||
19 | dispute between such retail licensee and manufacturer, | ||||||
20 | importing distributor, or distributor with respect to the | ||||||
21 | amount of indebtedness existing because of such alleged sale. | ||||||
22 | Such written verified reports required to be submitted by | ||||||
23 | this
Section shall be posted by the State Commission in each of | ||||||
24 | its offices
in places available for public inspection not | ||||||
25 | later than the day
following receipt thereof by the State | ||||||
26 | Commission. The reports so posted shall
constitute notice to |
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1 | every manufacturer, importing distributor and
distributor of | ||||||
2 | the information contained therein. Actual notice to
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3 | manufacturers, importing distributors and distributors of the
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4 | information contained in any such posted reports, however | ||||||
5 | received,
shall also constitute notice of such information.
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6 | The 30 day merchandising credit period allowed by this | ||||||
7 | Section shall
commence with the day immediately following the | ||||||
8 | date of invoice and
shall include all successive days | ||||||
9 | including Sundays and holidays to and
including the 30th | ||||||
10 | successive day.
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11 | In addition to other methods allowed by law, payment by | ||||||
12 | check during
the period for which merchandising credit may be | ||||||
13 | extended under the
provisions of this Section shall be | ||||||
14 | considered payment. All checks
received in payment for | ||||||
15 | alcoholic liquor shall be promptly deposited for
collection. A | ||||||
16 | post dated check or a check dishonored on presentation for
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17 | payment shall not be deemed payment.
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18 | A retail licensee shall not be deemed to be delinquent in | ||||||
19 | payment for
any alleged sale to him of alcoholic liquor when | ||||||
20 | there exists a bona fide
dispute between such retailer and a | ||||||
21 | manufacturer, importing distributor
or distributor with | ||||||
22 | respect to the amount of indebtedness existing
because of such | ||||||
23 | alleged sale. A retail licensee shall not be deemed to be | ||||||
24 | delinquent under this provision and 11 Ill. Adm. Code 100.90 | ||||||
25 | until 30 days after the date on which the region in which the | ||||||
26 | retail licensee is located enters Phase 4 of the Governor's |
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1 | Restore Illinois Plan as issued on May 5, 2020. A retail | ||||||
2 | licensee shall not be deemed to be delinquent in payment for | ||||||
3 | any alleged sale to the retail licensee of alcoholic liquor | ||||||
4 | unless such manufacturer, importing distributor, or | ||||||
5 | distributor has provided notice in writing to the retailer of | ||||||
6 | the amount of indebtedness existing because of such alleged | ||||||
7 | sale not less than 7 days prior to reporting the retailer as | ||||||
8 | delinquent. | ||||||
9 | A delinquent retail licensee who engages in the retail | ||||||
10 | liquor
business at 2 or more locations shall be deemed to be | ||||||
11 | delinquent with
respect to each such location.
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12 | The license of any person who violates any provision of | ||||||
13 | this Section
shall be subject to suspension or revocation in | ||||||
14 | the manner provided by
this Act.
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15 | If any part or provision of this Article or the | ||||||
16 | application thereof
to any person or circumstances shall be | ||||||
17 | adjudged invalid by a court of
competent jurisdiction, such | ||||||
18 | judgment shall be confined by its operation
to the controversy | ||||||
19 | in which it was mentioned and shall not affect or
invalidate | ||||||
20 | the remainder of this Article or the application thereof to
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21 | any other person or circumstance and to this and the | ||||||
22 | provisions of this
Article are declared severable.
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23 | (Source: P.A. 101-631, eff. 6-2-20.)
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24 | (235 ILCS 5/6-9.5 new) | ||||||
25 | Sec. 6-9.5. Definitions. In this Section through Section |
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1 | 6-9.25: | ||||||
2 | "Common ownership" means any ownership interest of more | ||||||
3 | than 5% of the total ownership interests of 2 or more retail | ||||||
4 | licensees. | ||||||
5 | "Cooperative purchasing agreement" means an agreement | ||||||
6 | entered into between 2 or more individually owned, commonly | ||||||
7 | owned, or not commonly owned retail licensees or other | ||||||
8 | licensees with retail privileges for the purpose of purchasing | ||||||
9 | alcoholic beverages from licensees with distribution | ||||||
10 | privileges. | ||||||
11 | "Quantity discounting" means a sales program between a | ||||||
12 | licensee with distribution privileges and a retail licensee or | ||||||
13 | retail licensees in which the primary purpose of the program | ||||||
14 | is to increase product sales and merchandising to retail | ||||||
15 | licensees and is not a subterfuge to provide prohibited things | ||||||
16 | of value as inducements to retail licensees. "Quantity | ||||||
17 | discounting" includes circumstances in which a licensee with | ||||||
18 | distribution privileges offers a retail licensee or retail | ||||||
19 | licensees a discount based upon an agreement by which the | ||||||
20 | retail licensee may purchase a predetermined number of | ||||||
21 | products in return for receiving a discount on the goods | ||||||
22 | purchased, which may be applied either as a price reduction at | ||||||
23 | the time of sale or as a rebate or credit following the sale, | ||||||
24 | subject to the conditions found in Section 6-9.15.
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25 | (235 ILCS 5/6-9.10 new) |
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1 | Sec. 6-9.10. Cooperative purchasing agreements. | ||||||
2 | (a) A cooperative purchasing agreement shall only be valid | ||||||
3 | if the following conditions are met: | ||||||
4 | (1) the agreement is in writing and signed by all | ||||||
5 | parties to the agreement; | ||||||
6 | (2) the agreement contains the complete license | ||||||
7 | information for all parties to the agreement, including | ||||||
8 | State and local license numbers and expiration dates; | ||||||
9 | (3) a retail licensee that is a party to the agreement | ||||||
10 | must not be a party to any other liquor-related | ||||||
11 | cooperative purchasing agreement; | ||||||
12 | (4) the agreement designates an agent or select group | ||||||
13 | of agents who will place orders on behalf of the | ||||||
14 | participating members of the group; | ||||||
15 | (5) a copy of the executed agreement, including any | ||||||
16 | amendments, deletions, or additions, is kept on the | ||||||
17 | premises of each party to the agreement for a period of 3 | ||||||
18 | years; and | ||||||
19 | (6) a copy of the executed agreement, including any | ||||||
20 | amendments, deletions, or additions, is delivered to the | ||||||
21 | relevant licensee with distribution privileges and to the | ||||||
22 | State Commission prior to making any purchases under the | ||||||
23 | agreement; any amendments, deletions, or additions must be | ||||||
24 | submitted to the State Commission within 7 business days | ||||||
25 | after the amendment, deletion, or addition is executed. | ||||||
26 | (b) A retail licensee may only be a member of one |
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1 | cooperative purchasing agreement group at a time. A retail | ||||||
2 | licensee may make purchases as a party to a cooperative | ||||||
3 | purchasing agreement or independently of any such agreement. | ||||||
4 | Nothing in this or any other Section of this Act shall be | ||||||
5 | construed to prohibit commonly or not commonly owned retail | ||||||
6 | licensees from making purchases separate and apart from any | ||||||
7 | executed cooperative purchasing agreements. | ||||||
8 | (c) A retail licensee may change to a different | ||||||
9 | cooperative purchasing agreement group no more than twice in a | ||||||
10 | 12-month period. However, if an existing cooperative | ||||||
11 | purchasing agreement group member purchases a retail location | ||||||
12 | from a member of another cooperative purchasing agreement, the | ||||||
13 | new owner of the retail location may move the membership of the | ||||||
14 | retail licensee to a different cooperative purchasing | ||||||
15 | agreement. | ||||||
16 | (d) When a retail licensee joins an existing cooperative | ||||||
17 | purchasing agreement group, the members of a group must be | ||||||
18 | members for a period of 7 days prior to being able to | ||||||
19 | participate in any quantity discount programs. | ||||||
20 | (e) Cooperative purchasing agreement group members must be | ||||||
21 | either all on-premises retail licensees or off-premises retail | ||||||
22 | licensees. | ||||||
23 | (f) Any individual retail licensee that fails to comply | ||||||
24 | with the terms and conditions of this Section may be deemed to | ||||||
25 | be in violation of Section 6-5. Any licensee with distribution | ||||||
26 | privileges that fails to comply with this Section may be |
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1 | deemed to be in violation of Section 6-5.
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2 | (235 ILCS 5/6-9.15 new) | ||||||
3 | Sec. 6-9.15. Quantity discounting terms. | ||||||
4 | (a) Any and all quantity discount programs shall offer the | ||||||
5 | same quantity price discount to all retail licensees, | ||||||
6 | cooperative purchasing agreement groups, and their agents. | ||||||
7 | Quantity discount programs shall: | ||||||
8 | (1) be open and available for acceptance for 7 | ||||||
9 | business days; | ||||||
10 | (2) be designed and implemented to produce product | ||||||
11 | volume growth with retail licensees; | ||||||
12 | (3) be based on the volume of product purchased; | ||||||
13 | discounts may include price reductions, cash, credits, and | ||||||
14 | rebates; no-charge alcoholic liquor products may be given | ||||||
15 | in lieu of a discount; | ||||||
16 | (4) be documented on related sales invoices or credit | ||||||
17 | memoranda; | ||||||
18 | (5) not require a retail licensee to take and dispose | ||||||
19 | of any quota of alcoholic liquors; bona fide quantity | ||||||
20 | discounts shall not be deemed to be quota sales; | ||||||
21 | (6) not require a retail licensee to purchase one | ||||||
22 | product in order to purchase another; this includes | ||||||
23 | combination sales if one or more products may be purchased | ||||||
24 | only in combination with other products and not | ||||||
25 | individually; and |
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1 | (7) require a minimum quantity of 250 cases. | ||||||
2 | (b) A licensee who has distribution privileges and makes | ||||||
3 | quantity discount sales to participating members of a | ||||||
4 | cooperative purchasing agreement group shall issue customary | ||||||
5 | invoices to each participating retail licensee itemizing the | ||||||
6 | alcoholic liquor sold and delivered as part of a quantity | ||||||
7 | discount program to each participating retail licensee. | ||||||
8 | (c) A licensee who has distribution privileges may require | ||||||
9 | any participating member of a cooperative purchase group to | ||||||
10 | make the following minimum purchases: | ||||||
11 | (1) 2% of cases of any quantity discount program of | ||||||
12 | 500 or fewer cases. | ||||||
13 | (2) 1.5% of cases of any quantity discount program of | ||||||
14 | at least 501 and not more than 2,000 cases. | ||||||
15 | (3) 1% of cases of any quantity discount program of | ||||||
16 | 2,001 or more cases.
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17 | (235 ILCS 5/6-9.20 new) | ||||||
18 | Sec. 6-9.20. Credit or rebate programs. | ||||||
19 | (a) A licensee with distribution privileges may issue to a | ||||||
20 | retail licensee product credits and rebates as an adjustment | ||||||
21 | on the purchase price based on volume purchasing, such as end | ||||||
22 | of month, end of year, end of period, or other such temporary | ||||||
23 | cumulative discounts, credits, and rebates to a retail | ||||||
24 | licensee. These cumulative discounts are considered to be a | ||||||
25 | form of pricing arrangement or quantity discount program and |
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1 | must be offered to all retail licensees. | ||||||
2 | (b) A licensee with distribution privileges utilizing | ||||||
3 | credits or rebates shall conform the credit or rebate program | ||||||
4 | to the following conditions: | ||||||
5 | (1) the credit or rebate program is made pursuant to a | ||||||
6 | written agreement established at or prior to the sale; the | ||||||
7 | licensee and the retail licensee shall maintain a record | ||||||
8 | of the written agreement per recordkeeping requirements; | ||||||
9 | (2) the agreement is entered into at the time of sale; | ||||||
10 | (3) the credit or rebate is extended for a specific | ||||||
11 | period of time; | ||||||
12 | (4) the credit or rebate is calculated based solely | ||||||
13 | upon the purchases made by the retail licensee receiving | ||||||
14 | the cumulative discount; and | ||||||
15 | (5) the credit or rebate is documented on a related | ||||||
16 | sales invoice or credit memoranda. | ||||||
17 | (c) If the retail licensee is part of a group of retail | ||||||
18 | licensees with common ownership or a member of a cooperative | ||||||
19 | purchasing agreement in compliance with Section 6-9.10, | ||||||
20 | cumulative discounts, credits, or rebates may be aggregated | ||||||
21 | into a single payment to each participating retail licensee. | ||||||
22 | If an aggregated payment is issued, the cumulative discount, | ||||||
23 | credit, or rebate must be calculated based upon the volume | ||||||
24 | purchases of each individual participating retail licensee and | ||||||
25 | must include supporting documentation that denotes the portion | ||||||
26 | of the discount, credit, or rebate attributable to each |
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1 | individual retail licensee.
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2 | (235 ILCS 5/6-9.25 new) | ||||||
3 | Sec. 6-9.25. Combination sales offers. A licensee with | ||||||
4 | distribution privileges is not prohibited from selling, at a | ||||||
5 | special combination price, 2 or more kinds or brands of | ||||||
6 | products to a retail licensee if the retail licensee has the | ||||||
7 | option of purchasing either product at the usual price and the | ||||||
8 | retail licensee is not required to purchase any product it | ||||||
9 | does not want.
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10 | Section 99. Effective date. This Act takes effect upon | ||||||
11 | becoming law.
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