PRIOR PRINTER'S NOS. 2888, 2949, 3415 PRINTER'S NO. 3610
No. 2257 Session of 1995
INTRODUCED BY CHADWICK, DECEMBER 7, 1995
AS AMENDED ON THIRD CONSIDERATION, HOUSE OF REPRESENTATIVES,
MAY 21, 1996
AN ACT
1 Amending the act of April 12, 1951 (P.L.90, No.21), entitled, as
2 reenacted, "An act Relating to alcoholic liquors, alcohol and
3 malt and brewed beverages; amending, revising, consolidating
4 and changing the laws relating thereto; regulating and
5 restricting the manufacture, purchase, sale, possession,
6 consumption, importation, transportation, furnishing, holding
7 in bond, holding in storage, traffic in and use of alcoholic
8 liquors, alcohol and malt and brewed beverages and the
9 persons engaged or employed therein; defining the powers and
10 duties of the Pennsylvania Liquor Control Board; providing
11 for the establishment and operation of State liquor stores,
12 for the payment of certain license fees to the respective
13 municipalities and townships, for the abatement of certain
14 nuisances and, in certain cases, for search and seizure
15 without warrant; prescribing penalties and forfeitures;
16 providing for local option, and repealing existing laws,"
17 providing for an investigative unit; and further providing
18 for SPECIAL OCCASION PERMITS, FOR advertising of prices of <--
19 alcoholic beverages, for distributors' and importing
20 distributors' restrictions on sales of malt or brewed
21 beverages, for prices of malt or brewed beverages, for Sunday
22 sales of alcoholic beverages, for distribution of malt and
23 brewed beverages, for forfeiture of property illegally
24 possessed or used, for minimum quantities sellable and for
25 motor vehicle licenses to be revoked.
26 The General Assembly of the Commonwealth of Pennsylvania
27 hereby enacts as follows:
28 Section 1. Section 104(d) of the act of April 12, 1951
1 (P.L.90, No.21), known as the Liquor Code, reenacted and amended
2 June 29, 1987 (P.L.32, No.14) and amended December 7, 1990
3 (P.L.622, No.160), is amended to read:
4 Section 104. Interpretation of Act.--* * *
5 (d) The provisions of this act are intended to create a
6 system for distribution that shall include the fixing of prices
7 for liquor [and]; alcohol [and]; controls placed on prices for <--
8 malt and brewed beverages; and controls placed on advertisement
9 of prices of alcoholic beverages, each of which shall be
10 construed as integral to the preservation of the system, without
11 which system the Commonwealth's control of the sale of liquor
12 and alcohol and malt and brewed beverages, and the
13 Commonwealth's promotion of its policy of temperance and
14 responsible conduct with respect to alcoholic beverages, would
15 not be possible.
16 * * *
17 Section 2. The act is amended by adding a section to read:
18 Section 216. Investigative Unit.--(a) The board shall
19 establish an investigative unit that shall be responsible for
20 implementing and monitoring compliance with the provisions of
21 and regulations made under this act relating to malt or brewed
22 beverages and the malt or brewed beverage industry.
23 (b) The investigative unit shall, among other things:
24 (1) handle notifications concerning price introductions and
25 changes;
26 (2) receive and make recommendations to the board concerning
27 applications to rescind price discounts;
28 (3) provide assistance to the board concerning reports and
29 investigations the board desires or is required to provide;
30 (4) handle applications for brand registration; and
19950H2257B3610 - 2 -
1 (5) handle copies of franchise or territorial agreements
2 submitted by importing distributors.
3 (c) Management of the unit shall be vested in a director,
4 who shall be assisted by other personnel as the board deems
5 necessary. The director shall report to the board secretary.
6 SECTION 3. SECTION 408.4(A) OF THE ACT, AMENDED APRIL 29, <--
7 1994 (P.L.212, NO.30) AND OCTOBER 5, 1994 (P.L.522, NO.77), IS
8 AMENDED TO READ:
9 SECTION 408.4. SPECIAL OCCASION PERMITS.--(A) UPON
10 APPLICATION OF ANY HOSPITAL, CHURCH, SYNAGOGUE, VOLUNTEER FIRE
11 COMPANY, VOLUNTEER AMBULANCE COMPANY, VOLUNTEER RESCUE SQUAD,
12 NONPROFIT AGRICULTURAL ASSOCIATION IN EXISTENCE FOR AT LEAST TEN
13 YEARS, BONA FIDE SPORTSMEN'S CLUB IN EXISTENCE FOR AT LEAST TEN
14 YEARS, NATIONALLY CHARTERED VETERANS' ORGANIZATION AND ANY
15 AFFILIATED LODGE OR SUBDIVISION OF SUCH ORGANIZATION, FRATERNAL
16 BENEFIT SOCIETY THAT IS LICENSED TO DO BUSINESS IN THIS
17 COMMONWEALTH AND ANY AFFILIATED LODGE OR SUBDIVISION OF SUCH
18 FRATERNAL BENEFIT SOCIETY, OR THE AUXILIARY OF ANY OF THE
19 FOREGOING, AND UPON PAYMENT OF THE PRESCRIBED FEE FOR SPECIAL
20 OCCASION PERMITS UNDER SECTION 614-A OF THE ACT OF APRIL 9, 1929
21 (P.L.177, NO.175), KNOWN AS "THE ADMINISTRATIVE CODE OF 1929,"
22 THE BOARD SHALL ISSUE A SPECIAL OCCASION PERMIT GOOD FOR A
23 PERIOD OF NOT MORE THAN FIVE CONSECUTIVE OR NONCONSECUTIVE DAYS:
24 PROVIDED, HOWEVER, THAT THE FIVE NONCONSECUTIVE DAYS SHALL BE
25 USED IN A THREE-MONTH PERIOD MEASURED FROM THE DATE OF THE FIRST
26 DAY. SPECIAL OCCASION PERMITS MAY ALSO BE ISSUED TO A MUSEUM
27 OPERATED BY A NONPROFIT CORPORATION IN A CITY OF THE THIRD CLASS
28 OR TOWNSHIP OF THE FIRST CLASS OR A NONPROFIT CORPORATION
29 ENGAGED IN THE PERFORMING ARTS IN A CITY OF THE THIRD CLASS OR
30 AN INCORPORATED TOWN FOR A PERIOD OF NOT MORE THAN SIX
19950H2257B3610 - 3 -
1 NONCONSECUTIVE OR TEN CONSECUTIVE DAYS AT THE PRESCRIBED FEE FOR
2 SPECIAL OCCASION PERMITS UNDER SECTION 614-A OF "THE
3 ADMINISTRATIVE CODE OF 1929."
4 * * *
5 Section 3 4. Section 431(d)(2) of the act is amended to <--
6 read:
7 Section 431. Malt and Brewed Beverages Manufacturers',
8 Distributors' and Importing Distributors' Licenses.--* * *
9 (d) * * *
10 (2) After January 1, 1980, no manufacturer shall enter into
11 any agreement with more than one distributor or importing
12 distributor for the purpose of establishing more than one
13 agreement for designated brand or brands of malt or brewed
14 beverages in any one territory. Each franchise territory which
15 is granted by a manufacturer shall be geographically contiguous.
16 All importing distributors shall maintain sufficient records to
17 evidence compliance of this section. With regard to any
18 territorial distribution authority granted to an importing
19 distributor by a manufacturer of malt or brewed beverages after
20 January 1, 1996, the records shall establish that each and every
21 case of a brand of malt or brewed beverages for which the
22 importing distributor is assigned was sold, resold, stored,
23 delivered or transported by the importing distributor, either
24 from a point or to a point within the assigned geographically
25 contiguous territory, to any person or persons, whether such
26 person or persons are licensed by this act or not licensed by
27 this act.
28 * * *
29 Section 4 5. Section 440 of the act, amended August 17, 1965 <--
30 (P.L.346, No.182), is amended to read:
19950H2257B3610 - 4 -
1 Section 440. Sales by Manufacturers of Malt or Brewed
2 Beverages; Minimum Quantities.--No manufacturer shall sell any
3 malt or brewed beverages for consumption on the premises where
4 sold, nor sell or deliver any such malt or brewed beverages in
5 other than original containers approved as to capacity by the
6 board, nor in quantities of less than a case of twenty-four
7 containers, each container holding seven fluid ounces or more,
8 or a case of fifteen or more containers, each container holding
9 twenty-two fluid ounces or more, or a case of twelve containers,
10 each container holding twenty-four fluid ounces or more, except
11 original containers containing one hundred twenty-eight ounces
12 or more which may be sold separately; nor shall any manufacturer
13 maintain or operate within the Commonwealth any place or places
14 other than the place or places covered by his or its license
15 where malt or brewed beverages are sold or where orders are
16 taken.
17 Section 5 6. Section 441(a) and (b) of the act, amended <--
18 August 17, 1965 (P.L.346, No.182), are amended and the section
19 is amended by adding subsections to read:
20 Section 441. Distributors' and Importing Distributors'
21 Restrictions on Sales, Storage, Etc.--(a) No distributor or
22 importing distributor shall purchase, receive or resell any malt
23 or brewed beverages except:
24 (1) in the original containers as prepared for the market by
25 the manufacturer at the place of manufacture[.]; or
26 (2) in a case of identical containers repackaged in the
27 manner described by subsection (f).
28 (b) No distributor or importing distributor shall sell any
29 malt or brewed beverages in quantities of less than a case of
30 twenty-four containers, each container holding seven fluid
19950H2257B3610 - 5 -
1 ounces or more, or a case of fifteen or more containers, each
2 container holding twenty-two fluid ounces or more, or a case of
3 twelve containers, each container holding twenty-four fluid
4 ounces or more, except original containers containing one
5 hundred twenty-eight ounces or more which may be sold
6 separately: Provided, That no malt or brewed beverages sold or
7 delivered shall be consumed upon the premises of the distributor
8 or importing distributor, or in any place provided for such
9 purpose by such distributor or importing distributor.
10 * * *
11 (f) (1) To salvage one or more saleable cases from one or
12 more damaged cases, cartons or packages of malt or brewed
13 beverages, a distributor or importing distributor may repackage,
14 consequent to inadvertent damage, and sell a case, carton or
15 package of identical units of malt or brewed beverages.
16 (2) Repackaging is permissible only to the extent made
17 necessary by inadvertent damage. Repackaging not consequent to
18 damage is prohibited.
19 (3) For purposes of this subsection, "identical units" are
20 undamaged bottles or cans of identical brand, package and
21 volume.
22 (g) All malt or brewed beverages purchased by an importing
23 distributor from a Pennsylvania manufacturer of malt or brewed
24 beverages or from any person located outside this Commonwealth
25 for resale shall be invoiced to the importing distributor, shall
26 come physically into the possession of such importing
27 distributor and shall be unloaded into and distributed from the
28 licensed premises of such importing distributor. The board may
29 act to further define and control the storage and distribution
30 of malt or brewed beverages in conformity with this section and
19950H2257B3610 - 6 -
1 this act.
2 Section 6 7. Section 447 of the act, added December 7, 1990 <--
3 (P.L.622, No.160), is amended to read:
4 Section 447. Price Changes of Malt and Brewed Beverages.--
5 (a) (1) The purpose of this section is to [regulate the manner
6 in which prices of malt or brewed beverages are changed by the
7 manufacturers, importing distributors and other distributors and
8 other distributors and to provide] effect and promote the intent
9 of the General Assembly, expressed in section 104 of this act
10 and in this section, by regulating the manner in which wholesale
11 prices of malt or brewed beverages are changed by a
12 manufacturer, importing distributor and distributor and by
13 providing for the retention and the furnishing of records of
14 price changes by such manufacturers, importing distributors and
15 distributors. By forbidding manufacturers, importing
16 distributors and distributors from providing short-term price
17 wholesale discounts, it is the intent of the General Assembly to
18 discourage increased consumption and irresponsible conduct
19 resulting from impulse buying, price promotion or the natural
20 elasticity of demand relative to price.
21 (2) Any manufacturer, importing distributor or distributor
22 [who] which reduces the price on any package of any brand of
23 malt or brewed [beverages] beverage sold for resale within this
24 Commonwealth may further reduce the price at any time, but any
25 reduction shall continue in full force and effect for at least
26 one hundred [eighty] twenty days from the date on which the last
27 such reduced price becomes effective, except [for the meeting of
28 competition as set forth in subsection (b). However, such
29 reduced price may be increased during such one hundred eighty-
30 day period to reflect any tax increase on malt or brewed
19950H2257B3610 - 7 -
1 beverages.] that price may be increased earlier:
2 (i) to reflect any tax increase on malt or brewed beverages;
3 (ii) in the manner described in subsection (b), if the
4 increase was effected to meet competition; or
5 (iii) with permission of the board granted in the manner
6 described in subsection (c).
7 (3) If [a manufacturer,] an importing distributor or
8 distributor of malt or brewed beverages lowers the wholesale
9 price on any package of any brand of malt or brewed beverages to
10 one importing distributor or distributor or retail licensee
11 within [this Commonwealth, the manufacturer,] the geographic
12 area for which he possesses distribution rights for that
13 product, the importing distributor or distributor shall lower
14 the wholesale price on such package of such brand offered or
15 sold to all other importing distributors or distributors or
16 retail licensees within [this Commonwealth] the geographic area
17 by a like amount. Any importing distributor or distributor who
18 lowers the wholesale price on any package of any brand of malt
19 or brewed beverages shall file a notice of the lowered price
20 with the Commonwealth no later than seven days of such change
21 and retain a record of the lowered price for at least two years
22 from the date of filing. If such [manufacturer,] importing
23 distributor or distributor, having lowered the wholesale price
24 on a package of a brand pursuant to this section, subsequently
25 raises the wholesale price on such package of such brand to one
26 importing distributor or distributor or retail licensee within
27 [this Commonwealth, such manufacturer,] the geographic area for
28 which he possesses distribution rights for that product, the
29 importing distributor or distributor shall raise the wholesale
30 price on such package of such brand offered or sold to all other
19950H2257B3610 - 8 -
1 importing distributors or distributors or retail licensees
2 within [this Commonwealth] the geographic area by a like amount.
3 (4) No importing distributor or distributor shall be
4 required by any manufacturer or importing distributor to reduce
5 the resale price of any package of any brand of malt or brewed
6 beverages by an amount greater than the amount by which such
7 manufacturer or importing distributor has reduced the wholesale
8 price on such package of such brand to such importing
9 distributor or distributor.
10 (5) Every importing distributor and distributor receiving a
11 price reduction on any package of any brand of malt or brewed
12 beverages pursuant to this section shall reduce his price by a
13 like amount to all classes of customers.
14 (6) Manufacturers [of malt or brewed beverages] shall notify
15 importing distributors and distributors, in writing, of any
16 [price reductions, prices on newly introduced brand or packages
17 and subsequent increases after expiration of one hundred eighty
18 days, if any, at least fifteen days in advance of such price
19 changes.]:
20 (i) price reduction with respect to any malt of brewed
21 beverage;
22 (ii) price of a new brand or package of a malt or brewed
23 beverage; or
24 (iii) price increase subsequent to a price reduction at
25 least fifteen days before such reduced, new or increased price
26 becomes effective.
27 (b) If [a] any manufacturer, importing distributor or
28 distributor has reduced the wholesale price [on] of any package
29 of any brand of malt or brewed beverages, any other
30 manufacturer, importing distributor or distributor may reduce
19950H2257B3610 - 9 -
1 the wholesale price on the same or similar package [of such
2 brand in order to meet competition. Such price reduction shall
3 be no greater than the price reduction being met. All such price
4 reductions to meet competition shall continue in full force and
5 effect for the balance of the one hundred eighty-day period
6 during which the price reduction being met is required to remain
7 in full force and effect.] or competing brand to meet
8 competition, which reduction shall:
9 (1) not exceed the reduction to which it responds; and
10 (2) continue in full force and effect until the earlier of:
11 (i) the one hundred twentieth day after the date on which
12 the reduction to which it responds became effective; or
13 (ii) the lawful rescission of the reduction to which it
14 responds.
15 (c) [Notwithstanding any other provision of this section,
16 the board shall have the authority, upon application by a
17 manufacturer, importing distributor or distributor, to permit
18 such] A manufacturer, importing distributor or distributor [to]
19 may change the price within a time period of less than one
20 hundred [eighty] twenty days from when the price went into
21 effect [upon an appropriate showing that market conditions
22 warrant a change in price.] if market conditions, or any other
23 good cause, support the change. The manufacturer, importing
24 distributor or distributor shall notify the board within forty-
25 eight hours of the change of such price. The board shall set a
26 hearing date as soon as practicable and shall rule on whether
27 the manufacturer, importing distributor or distributor has made
28 an appropriate showing which supports the price change. If the
29 manufacturer, importing distributor or distributor fails to show
30 good cause, it shall reimburse the difference between the
19950H2257B3610 - 10 -
1 original and increased price to those who purchased the malt or
2 brewed beverage.
3 (d) The board shall monitor the filings deriving from
4 subsection (a)(3) and the applications deriving from subsection
5 (c). The board shall, no less frequently than four times each
6 year, consider at a regularly or specially scheduled meeting the
7 issue of whether the Commonwealth's policy of temperance and
8 responsible conduct with respect to alcoholic beverages is being
9 effected and promoted by this act, including, without
10 limitation, this section and sections 492(18), 493(8), (18) and
11 (22) and 498 of this article and by the board's regulations,
12 including, without limitation, to those regulations restricting
13 retail licensees' discount pricing practices. The board shall,
14 no less frequently than once each year, provide to the General
15 Assembly a report with respect to the board's findings, which
16 report shall contain a summary of the filing and applications
17 deriving from this section.
18 Section 7 8. Section 492(4) of the act is amended to read: <--
19 Section 492. Unlawful Acts Relative to Malt or Brewed
20 Beverages and Licensees.--
21 It shall be unlawful--
22 * * *
23 (4) [Sunday Sales of Malt or Brewed Beverages by] Activities
24 of Manufacturers, Importing Distributors or Distributors on
25 Sunday. For any manufacturer of malt or brewed beverages,
26 importing distributor or distributor, or the servants, agents or
27 employes of the same, to sell[, trade or barter in] malt or
28 brewed beverages between the hours of twelve o'clock midnight of
29 any Saturday and two o'clock in the forenoon of the following
30 Monday. Notwithstanding any other provision of this section,
19950H2257B3610 - 11 -
1 delivery or receiving of malt or brewed beverages shall be
2 permissible on Sunday after prior arrangement as follows:
3 (1) (I) A manufacturer may deliver to any importing <--
4 distributor or distributor to which the manufacturer has granted
5 wholesale distribution rights for the manufacturer's product.
6 (2) (II) An importing distributor or distributor may deliver <--
7 to any organization to which a special occasion permit has been
8 issued between the hours of nine o'clock antemeridian and five
9 o'clock postmeridian.
10 (3) (III) An importing distributor or distributor may <--
11 deliver to anyone not licensed under this act between the hours
12 of nine o'clock antemeridian and five o'clock postmeridian. The
13 term "prior arrangement" shall mean that malt or brewed
14 beverages having a total sale price, excluding any deposits or
15 credits, exceeding two hundred fifty dollars ($250) have been
16 ordered, invoiced and paid for in full at the seller's licensed
17 premises before the Sunday of delivery.
18 * * *
19 Section 8 9. This act shall take effect in 60 days. <--
K29L47RZ/19950H2257B3610 - 12 -