HB2502 103RD GENERAL ASSEMBLY

LRB103 28642 RPS 55023 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
HB2502

Introduced 2/15/2023, by Rep. Curtis J. Tarver, II

SYNOPSIS AS INTRODUCED:

235 ILCS 5/6-6.3
235 ILCS 5/6-35

Amends the Liquor Control Act of 1934. Makes changes in the definition of "alcopop". Prohibits the display of any alcopop beverage in premises licensed to sell alcoholic liquor at retail adjacent to soft drinks, fruit juices, bottled water, candy, or snack foods portraying cartoons or youth-orientated photos. Adds parents or subsidiaries of certain licensees to provisions concerning non-alcoholic merchandise. Provides that the bona fide producer or vendor of non-alcoholic merchandise shall not provide something of value to a retailer for sale of non-alcoholic merchandise if the of-value item or items are a subterfuge for providing something of value for the sale of alcoholic liquor. Provides that the Illinois Liquor Control Commission shall have the authority to examine records of a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, for the purpose of examining all of-value transactions between such entity and a retailer.

A BILL FOR

AN ACT concerning liquor.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Liquor Control Act of 1934 is amended by changing Sections 6-6.3 and 6-35 as follows:

(235 ILCS 5/6-6.3)

Sec. 6-6.3. Non-alcoholic merchandise.

(a) Nothing in this Act shall authorize the Illinois Liquor Control Commission to regulate or exercise jurisdiction over any action, transaction, and business of manufacturers, distributors, or retailers, or any parent or subsidiary thereof, engaged in any transaction involving the furnishing, selling, or offering for sale of non-alcoholic merchandise by manufacturers, distributors, or retailers, or any parent or subsidiary thereof, unless the transaction involves expressed or implied agreements or understandings prohibited by this Act.

(b) Non-alcoholic merchandise may be sold by a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, to a retail licensee if:

(1) the manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, is also in business as a bona fide producer or vendor of other merchandise;

(2) the merchandise is sold at its fair market value;

(3) the non-alcoholic merchandise is not sold in combination with alcoholic liquor or conditioned on the sale of alcoholic liquor;

(4) the manufacturer class license holder's, non-resident dealer's, foreign importer's, importing distributor's, or distributor's, or their parent's or subsidiary's, acquisition or production costs of the non-alcoholic merchandise appear on the manufacturer class license holder's, non-resident dealer's, foreign importer's, importing distributor's, or distributor's purchase invoices or other records;

(5) the individual selling prices of the non-alcoholic merchandise and alcoholic liquor sold in a single transaction can be determined from commercial documents covering the sales transaction if non-alcoholic merchandise is sold in the same transaction as alcoholic liquor; and

(6) the price is collected by the manufacturer class license holder, non-resident dealer, foreign importer, or distributor, or any parent or subsidiary thereof, within 30 days of the date of the sale, unless other terms are established in writing between the parties.

(c) The State Commission may not prohibit the sale of non-alcoholic merchandise if it is sold in the manner in which the non-alcoholic merchandise is sold by a manufacturer or distributor that is not licensed by the State Commission; provided, however, that all invoices for non-alcoholic merchandise sold by a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, that is also in business as a bona fide producer or vendor of other merchandise must be in compliance with the books and records requirements of 11 Ill. Adm. Code 100.130. If the non-alcoholic merchandise is sold on the same invoice as an alcoholic liquor product, the 30-day merchandising credit provisions of Section 6-5 of this Act shall apply to the entire transaction, including the non-alcoholic merchandise.

(d) Except as provided in subsection (f), a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, that is also in business as a bona fide producer or vendor of non-alcoholic merchandise shall not condition the sale of its alcoholic liquor on the sale of its non-alcoholic merchandise and shall not combine the sale of its alcoholic liquor with the sale of its non-alcoholic merchandise. A manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, that is also in business as a bona fide producer or vendor of non-alcoholic merchandise may sell, market, and promote non-alcoholic merchandise in the same manner in which the non-alcoholic merchandise is sold, marketed, or promoted by a manufacturer or distributor not licensed by the State Commission. Notwithstanding any provision of this Section to the contrary, the bona fide producer or vendor of non-alcoholic merchandise shall not provide something of value to a retailer for sale of non-alcoholic merchandise if the of-value item or items are a subterfuge for providing something of value for the sale of alcoholic liquor. The State Commission shall have the authority to examine records of a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor, or any parent or subsidiary thereof, for the purpose of examining all of-value transactions between such entity and a retailer.

(e) Notwithstanding the prohibited furnishing or providing of fixtures, equipment, and furnishings to retailers as contained in Section 6-6 of this Act, the act of a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor furnishing or providing retailers with fixtures, equipment, or furnishings for the limited purpose of storing, servicing, displaying, advertising, furnishing, selling, or aiding in the sale of non-alcoholic merchandise is permitted, only to the extent allowed by this Section, and such fixtures, equipment, and furnishings shall not be used by the retail licensee to store, service, display, advertise, furnish, sell, or aid in the sale of alcoholic liquors. All such fixtures, equipment, or furnishings shall be identified by the retail licensee as being furnished by a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor licensed by the State Commission and, if purchased by the retail licensee and sold on the same invoice as alcoholic liquor products, the price must be collected by the manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor selling the same within 30 days of the date of sale.

(f) Notwithstanding any provision of this Act to the contrary, a manufacturer class license holder, non-resident dealer, foreign importer, importing distributor, or distributor may package and distribute alcoholic liquor in combination with other non-alcoholic merchandise products if the alcoholic liquor and non-alcoholic merchandise was originally packaged together for ultimate sale to consumers by the manufacturer or agent of the manufacturer as originally packaged by the manufacturer or agent of the manufacturer for ultimate sale to consumers.

(Source: P.A. 99-282, eff. 8-5-15.)

(235 ILCS 5/6-35)

Sec. 6-35. Alcopops.

(a) For purposes of this Section, "alcopop" means a flavored alcoholic beverage or flavored malt beverage that includes (i) a malt beverage containing a malt base or beer and added natural or artificial blending material, such as fruit juices, flavors, flavorings, colorings, or preservatives where such blending material constitutes .5% or more of the alcohol by volume contained in the finished beverage; (ii) a beverage containing wine and more than 15% added natural or artificial blending material, such as fruit juices, flavors, flavorings, or adjuncts, water (plain, carbonated, or sparkling), colorings, or preservatives; (iii) a beverage containing distilled alcohol and added natural or artificial blending material, such as fruit juices, flavors, flavorings, colorings, or preservatives; or (iv) an alcohol malt beverage containing caffeine, guarana, taurine, or ginseng, where the beverage constitutes 0.5% or more of alcohol by volume.

(b) No entity may advertise, promote, or market any alcopop beverages toward children. Advertise, promote, or market includes, but is not limited to the following:

(1) the use of cartoons and youth-orientated photos in advertising, promotion, packaging, or labeling of alcohol products;

(2) sponsorships of athletic events where the intended audience is primarily children;

(3) billboards advertising alcopops, as defined in items (i), (ii), and (iii) of subsection (a) of this Section, placed within 500 feet of schools, public parks, amusement parks, and places of worship; and

(4) the display of any alcopop beverage in any videogame, theater production, or other live performances where the intended audience is primarily children; and .

(5) the display of any alcopop beverage in premises licensed to sell alcoholic liquor at retail adjacent to soft drinks, fruit juices, bottled water, candy, or snack foods portraying cartoons or youth-orientated photos.

The restrictions on alcopop placements in this paragraph (5) shall not apply to a shelf, aisle, or display area in which the primary items for sale are alcoholic liquors or an area in which persons under the age of 21 are prohibited from entering without a parent or legal guardian.

In this paragraph (5), an alcopop is adjacent if placed:

(A) on the same shelf or aisle of shelves as soft drinks, fruit juices, bottled water, candy, or snack foods portraying cartoons or youth-orientated photos;

(B) on the same display or abutting display that also displays soft drinks, fruit juices, bottled water, candy, or snack foods portraying cartoons or youth-orientated photos;

(C) on an end cap display or a display at the end of a shelving row that contains soft drinks, fruit juices, bottled water, candy, or snack foods portraying cartoons or youth-orientated photos;

(D) on a display at or near an area that primarily displays soft drinks, fruit juices, bottled water, candy, or snack foods portraying cartoons or youth-orientated photos; or

(E) in the same or abutting refrigeration unit that also displays soft drinks, fruit juices, bottled water, candy, or snack foods portraying cartoons or youth-orientated photos.

(c) No entity shall sell for consumption an alcohol malt beverage containing caffeine, guarana, taurine, or ginseng, where the beverage constitutes 0.5% or more of alcohol by volume, unless individual containers of the beverage have imprinted on each individual container the following:

(1) the words "contains alcohol"; and

(2) the alcohol content of the beverage.

(d) Any person who violates this Section is guilty of a business offense and shall be fined $500 for a first offense and $1,000 for a second or subsequent offense.

(e) Nothing in this Section shall be construed to be inconsistent with any other provision of this Section or any other State or federal laws, rules, or regulations regarding the labeling of alcoholic beverages.

(Source: P.A. 95-618, eff. 6-1-08; 95-860, eff. 1-1-09.)