Florida Senate - 2019 SB 962 By Senator Diaz 36-01115A-19 2019962__ 1 A bill to be entitled 2 An act relating to malt beverages; creating s. 3 563.061, F.S.; defining terms; prohibiting sales and 4 purchases of malt beverages on consignment or any 5 basis other than a bona fide sale; authorizing a 6 vendor to request return of undamaged product, damaged 7 product, and out-of-code product to a distributor; 8 authorizing a distributor to accept such returns under 9 certain circumstances; providing requirements for the 10 exchange of product; specifying that a distributor is 11 not required to accept returns authorized by the act; 12 requiring a distributor to take certain actions if the 13 distributor accepts return of product; requiring the 14 distributor to keep transaction records of each return 15 for a specified time; requiring the records to contain 16 certain information; requiring the distributor to 17 provide a copy of the transaction record to a vendor 18 and the Division of Alcoholic Beverages and Tobacco 19 under certain circumstances; providing requirements 20 for the maintenance of the transaction records; 21 providing that returns pursuant to the act are not 22 considered gifts, loans, or other forms of financial 23 aid or assistance for purposes of tied house evil; 24 providing for a civil penalty; authorizing the 25 division to adopt rules; providing an effective date. 26 27 Be It Enacted by the Legislature of the State of Florida: 28 29 Section 1. Section 563.061, Florida Statutes, is created to 30 read: 31 563.061 Return of malt beverage products; prohibition of 32 consignment sales.— 33 (1) DEFINITIONS.—As used in this section, the term: 34 (a) “Damaged product” means malt beverages, whether sold in 35 individual containers or kegs, which, upon delivery to a vendor, 36 exhibit product deterioration, defective seals, leaking, damaged 37 labels, or missing or mutilated tamper-evident closures. 38 (b) “Manufacturer’s code date” means a coded best-by date, 39 expiration date, or other designated date or dating system 40 established by a manufacturer to signify the freshness of its 41 malt beverages and which is printed on the malt beverage 42 container or, in the case of a keg, marked on a cap, collar, 43 tag, or label affixed to the keg. 44 (c) “Out-of-code product” means malt beverages, whether 45 sold in individual containers or kegs, which have exceeded the 46 manufacturer’s code date and which, according to the 47 manufacturer’s policies, must be removed and replaced with fresh 48 products to ensure that only fresh malt beverages are available 49 for purchase at retail. 50 (d) “Undamaged product” means malt beverages, whether sold 51 in individual containers or kegs, which are not damaged products 52 or out-of-code products. 53 (2) CONSIGNMENT SALES PROHIBITED; AUTHORIZED BONA FIDE 54 RETURNS.—A distributor may not sell, offer for sale, or contract 55 to sell malt beverages on consignment or any basis other than a 56 bona fide sale. A vendor may not purchase, offer to purchase, or 57 contract to purchase malt beverages on consignment or any basis 58 other than a bona fide sale. Once a distributor sells malt 59 beverages to a vendor, only bona fide returns are allowed for 60 the ordinary and usual commercial reasons authorized in this 61 section. A product may not be returned because it is overstocked 62 or slow-moving or because there is only limited or seasonal 63 demand for the product. 64 (3) RETURNS OF UNDAMAGED PRODUCT.—A vendor may request 65 return of undamaged product to a distributor and, unless 66 otherwise provided in paragraphs (a)-(f), a return under this 67 subsection may only be for exchange of product or for a credit. 68 A distributor may not accept a return of undamaged product 69 unless the return is requested within 7 days after the delivery 70 date or unless: 71 (a) There is a change in regulation or administrative 72 procedure over which the vendor or its employees or agents have 73 no control, including, but not limited to, when a particular 74 brand or container size is no longer allowed to be sold. A 75 return under this paragraph may be for a credit or a refund. 76 (b) A vendor terminates operations and requests return of 77 any remaining products on hand. A return under this paragraph 78 may be for a credit or a refund. This paragraph does not apply 79 to a vendor’s temporary seasonal shutdown. 80 (c) Except as provided in paragraph (f), a vendor requests 81 return of a product for purposes of quality control or 82 freshness, and the product has not yet exceeded the 83 manufacturer’s code date. A return under this paragraph may only 84 be for exchange of product. 85 (d) A manufacturer has issued a product recall that affects 86 multiple vendors who are not affiliated with one another through 87 having common ownership, through being members of the same pool 88 buying group, or through being members of the same advertising 89 cooperative. A return under this paragraph may be for exchange 90 of product or for a credit. 91 (e) A vendor requests a return because the production or 92 importation of a product is discontinued. A vendor’s inventory 93 of the discontinued product may be returned under this paragraph 94 for a credit or a refund. 95 (f) A vendor who is open for a portion of the year has 96 product remaining at closure which, with respect to quality 97 control or freshness, would become unsuitable for sale during 98 the off-season, according to the manufacturer’s code date. A 99 return under this paragraph may be for credit or a refund. 100 101 If undamaged product is returned pursuant to paragraphs (a)-(f), 102 documentation of a qualifying exception in paragraphs (a)-(f) 103 must be kept with the transaction record maintained by the 104 distributor pursuant to subsection (8). 105 (4) RETURNS OF DAMAGED PRODUCT.— 106 (a) A vendor may request return of damaged product to a 107 distributor, and a return under this subsection may only be for 108 exchange of product or for a credit. The distributor must verify 109 that the product is damaged before accepting the return. A 110 vendor is liable for any product damaged by the vendor or its 111 customers and such product may not be returned. 112 (b) A distributor may accept a return of damaged product if 113 the return is requested within 7 days after the delivery date. 114 (5) RETURNS OF OUT-OF-CODE PRODUCT.— 115 (a) A vendor may request return of out-of-code product to a 116 distributor, and a return under this subsection may only be for 117 exchange of product. The distributor must verify that the 118 product is an out-of-code product before accepting such return. 119 (b) A distributor may accept a return of out-of-code 120 product at any time after the manufacturer’s code date if: 121 1. The manufacturer has written policies and procedures 122 that specify the date that product should be removed; 123 2. Such policies and procedures are readily verifiable and 124 consistently followed by the manufacturer; and 125 3. The manufacturer’s code date is printed on the product 126 container or, in the case of a keg, marked on a cap, collar, 127 tag, or label affixed to the keg. 128 (c) Out-of-code product returned to a distributor may not 129 reenter the retail market. 130 (6) EXCHANGES OF PRODUCT.—An exchange of product authorized 131 under this section must be in exact quantities with product of 132 near or equal value made by the same manufacturer and in the 133 same size individual container or keg unless a credit, if 134 authorized by this section, is issued at the time of the return 135 with supporting documentation. 136 (7) DISTRIBUTOR NOT REQUIRED TO ACCEPT RETURNS.—This 137 section does not require a distributor to accept returns 138 authorized under this section. If a distributor accepts a return 139 of product, the distributor must: 140 (a) Provide the exchange of product, the credit, or the 141 refund to the vendor, as provided in subsections (3), (4), and 142 (5), at the same time the distributor picks up the product being 143 returned; and 144 (b) For damaged or undamaged product, pick up the product 145 being returned within 14 days after receipt of the vendor’s 146 request. 147 (8) TRANSACTION RECORDS.— 148 (a) A distributor must keep and maintain for 3 years a 149 transaction record of each return which identifies: 150 1. The licensed vendor; 151 2. The licensed vendor’s business name and address; 152 3. The licensed vendor’s license number; 153 4. The product returned for exchange of product, credit, or 154 refund; and 155 5. Any documentation required by this section. 156 (b) The distributor must provide a copy of the transaction 157 record to the vendor in a format accessible by and legible to 158 the vendor. The distributor must provide a copy of the 159 transaction record to the division upon request in a format 160 accessible by and legible to the division. 161 (c) The transaction records must be maintained on the 162 distributor’s licensed premises, or may be kept at another 163 location in this state if the distributor notifies the division 164 in writing before using the other location. The distributor must 165 notify the division in writing of any change in recordkeeping 166 location. 167 (9) RETURNS NOT TIED HOUSE EVIL.—Bona fide returns made 168 pursuant to this section for exchange of product, credit, or 169 refund are not considered gifts, loans, or other forms of 170 financial aid or assistance that are prohibited by s. 561.42. 171 (10) CIVIL PENALTY.—In accordance with s. 561.29, the 172 division shall impose a civil penalty of $1,000 per violation 173 against a distributor or vendor who violates this section or any 174 rule adopted under this section. 175 (11) RULEMAKING AUTHORITY.—The division may adopt rules to 176 administer and enforce this section. 177 Section 2. This act shall take effect July 1, 2019.