SLA Chooses Not to Remove Split Case Charge Regulation

This past Fall we reported to you that the State Liquor Authority was considering amending several of their rules and regulations, including the regulation that limits the amount a wholesaler can charge you for “splitting a case” of liquor. The current regulation limits the charge to $1.92 per case (pro-rated per bottle) although current practice sees charges as high as almost $30 per case. The wholesalers can do this because allegedly, under a previous administration, the Liquor Authority permitted the wholesalers to charge whatever they want as long as they publicly posted their charges (which they do). The Authority proposed to remove this provision from the regulations since it hadn’t been enforced in several years and because it would be easier to regulate this through the use of advisories or bulletins rather than by regulation which has a highly regimented process for making future changes. We protested – and we won!

In written comments submitted to the State Liquor Authority and in oral comments provided at their public hearing on the proposed changes, the Association urged the SLA not to delete these provisions. We recognized that they were in need of being updated, but that it should be done based on data demonstrating the basis for any proposed rate. And we also used the opportunity to call the Authority’s attention to the fees wholesalers charge for delivery – which appear to be out of compliance with the existing SLA regulations that govern such charges. In addition to our own testimony, comments supporting our position were submitted to the SLA by Assemblymember Dan Quart, the Assembly Co-Chairman of the Legislative Administrative Regulatory Review Commission.

And we were successful on both counts. The final regulations were just released and the Liquor Authority removed the proposed changes to the split case charge. While the SLA is not going to enforce the outdated limits, Chairman Bradley has indicated he will be following up on our suggestion to bring all stakeholders together to look at the appropriate data and then the Authority can propose new limits that make sense. They’re also committed to examining the delivery charge issue. The Chairman has heard complaints about delivery charges from many individual licensees so our concerns resonated with him when we presented them.

We’re still examining the possibility of suing wholesalers for charging more for split cases and delivery than the SLA regulation permits. It looks to be a very expensive pursuit and as important as it is, with the tipped wage issue ahead of us, we need to establish our priorities. We’ll continue to pursue legislative relief by seeking passage of S4343 – A7898, our proposal to allow on-premises licensees to purchase wine and spirits from liquor stores. Our progress will be dependent in large part on your willingness to join in our grassroots lobbying activity. Stay tuned for future updates and requests.