Roles and Obligations of Alcoholic Beverage Distributors and Suppliers and how they share responsibility in the manufacture, distribution, sale and consumption of alcohol.

State alcohol regulatory agencies mandate certain responsibilities of both the distributor and distillery such as payment terms, incentives, price posting, contracts, etc. Every state has a different set of regulations (list of liquor control states). It is extremely important that you familiarize yourself with the rules and regulations pertaining to the brewery/winery and wholesaler relationship before doing business in that state. Many states also have franchise laws that define very specifically the parameters for terminating a distributor. Even in non-franchise states, a brewery or winery cannot terminate a distributor without cause unless they are willing to compensate the distributor for relinquishing the brand.

There are no strictly defined responsibilities of the brewery/winery or the beer/wine distributor, but the following are considered standard obligations of both parties:

Liquor Distributor Obligations

•Maintain proper storage environment as dictated in contract. Heat, cold, light and agitation can ruin products quickly.
•Install route management systems to expedite product delivery, service and quality control at retail.
•Maintain adequate inventories, sales forecasting and replenishment to eliminate out-of-stocks.
•Proper stock rotation in warehouse and retail trade.
•Remove "out of date" product from retail trade.
•Maintain payment terms as dictated by state liquor law or as stated in contract.
•Service all accounts in assigned territory (don’t high-spot).
•"Proper" maintenance of draft products.
•"Reasonable" call-frequency to retail accounts.
•Provide "market intelligence" (buy and non-buy lists, monthly depletions, pricing, sales data) to supplier. Make recommendations on what needs to be improved.
•Provide merchandising and retailer training on brands, pouring techniques, brewing/winemaking ingredients, terroir, and subtle taste differences.
•Segment the market and target customer occasion sales opportunities.
•Provide shelf space management programs to augment space to sales ratios.
•Assist in agreed upon market promotions—utilize price/quality as the principle weapon to build competitiveness.
•Integrate social media and technology to better understand consumer purchase habits, retail trends, product feedback, and co-branding opportunities.
•Visit the market frequently and talk to retailers about what brands need in their on- and off-premise locations.
•Maintain a good carbon footprint and sustainable practices.

Supplier Obligations (Distillery or Liquor Importers)