Under §101 of New York State’s Alcoholic Beverage Control Law, suppliers and wholesalers  (“Industry Members”) are forbidden to “Make any gift or render any service of any kind whatsoever, directly or indirectly, to any person licensed under [the alcoholic beverage control law] which in the judgment of the liquor authority may tend to influence such licensee to purchase the product of such manufacturer or wholesaler.”  The regulations in Part 86  list the gifts and services that a supplier or wholesaler may provide to a retailer. Regulation 86.1 warns, “No manufacturer or wholesaler shall, directly or indirectly, give any article or thing of value, or render any service of any kind, to any retailer, except as permitted by this rule. No retail licensee shall accept any such gift or service of any kind whatsoever, except as permitted by this rule.” This article reviews most but not all of the exceptions.

Industry Members are permitted to give retailers interior signs. Signs are items that have no value except to advertise the Industry Member or its products. Signs include such things as posters, placards, designs, and mechanical devices.  Because interior signs may not have any secondary value, the Liquor Authority does not place a monetary limit on them. However, the supplier or wholesaler may not pay the retailer for the privilege of erecting or hanging the sign.

Retailer Advertising Specialties are items that bear conspicuous advertising matter and are primarily valuable as point-of-sale advertising but do have a secondary value to the retailer. They include such things as thermometers, clocks, calendars, trays, coasters, mats, meal checks, paper napkins and coat checks. An Industry Member is permitted to give a retailer up to two hundred dollars in retailer advertising specialties per brand, per year. Wine decanters and carafes in sizes between eight and thirty-two fluid ounces are considered to be a Retailer Advertising Specialty and may be given to a retailer but must have imprinted on them the statement “Wine Service Only” in not less than eight-point Gothic Type as well as the brand name, type of wine and geographical designation. They are intended to aid in serve wine purchased from the Industry Member in containers of one gallon or more. 

Consumer Advertising Specialties are items of limited value that have conspicuous advertising and are given to the retailer by the wholesaler with the intention that the retailer give the items to consumers free of charge and without requiring a purchase. There is no specific limit on the value of Consumer Advertising Specialties that may be given to a retailer. 

Product Displays include wine racks, bins, barrels, casks, shelving and the like from which alcoholic beverages are displayed and sold, that bear conspicuous, permanent advertising. An Industry Member is permitted to give displays with a value of up to $300 for each of its brands to a retailer. However, it cannot add its brands together to increase the value of a single display to an amount in excess of $300.  Although mini refrigerators seem to fit the definition of a display, the State Liquor Authority has thus far taken the position that they may not be given to a retailer even if the value is less than $300.

An Industry Member is permitted to give wine lists (but not food lists) to a retailer, but the value of each wine list cover is limited to $5.  Additionally, an Industry Member may give or sponsor educational seminars for the employees of retailers either at its own premises or at the premises of the retailer. 

Where the regulations limit the value of an item, the value is  determined by the actual cost to the manufacturer or wholesale licensee who initially purchased it. Transportation and installation costs are excluded.  Each Industry Member must keep records of all gifts and services for a period of two years.  For more information, see Part 86 of the regulations.

Keven Danow is an attorney representing members of all three tiers of the Beverage Alcohol Industry and member of The Danow Group, 605 Third Avenue, New York, NY 10158.  (212 3703744). Website: thedanowgroup.com; email:kd@thedanowgroup.com