W. Va. Code R. § 175-4-4

Current through Register Vol. XLI, No. 50, December 13, 2024

Section 175-4-4 - Wine Distributors

4.1. Licensure application; form. -- The application for licensure as a wine distributor shall be made on a form designated "Application for Wine Distributor License, Alcohol Beverage Control Commissioner Form No. ABCC-WS-1," which shall be provided by the Commissioner.

4.2. Licensure application; content. -- The application for licensure as a wine distributor shall contain and include the following:

4.2.a. The name and address of applicant and whether the applicant is an individual, corporation, partnership, association or other business entity;

4.2.b. The business trade name of the applicant;

4.2.c. The exact location of the principal place of business;

4.2.d. The number and exact location of all warehouses to be operated by the applicant for the purpose of distribution of wine;

4.2.e. The date upon which the applicant began the operation of the business;

4.2.f. Whether the applicant is the owner of all business premises for which the license is issued, and if not, whether the applicant is the actual and bona fide lessee of any or all such premises, including the lessor's name and address for each business premises so leased;

4.2.g. Whether the applicant intends to carry on the business for which he or she is to be licensed personally or under his or her immediate supervision or direction, and if not, the name, age and address of the person who will manage or conduct the affairs of the distributorship;

4.2.h. Whether the premises for which the license is sought conforms to all applicable health and fire laws and regulations and to existing zoning ordinances;

4.2.i. Whether the applicant, if an individual, or whether any partner, member, officer, director or stockholder of the applicant holds or owns any interest in any licensed retailer, and if so, the extent and nature of such ownership;

4.2.j. If the applicant is an individual, a statement whether such applicant is a citizen of the United States, a bona fide resident of the State of West Virginia and the length of such residency and whether such applicant has attained the age of eighteen (18) years;

4.2.k. If the applicant is a partnership, association or other business entity, whether each member, is a citizen of the United States, a bona fide resident of the State of West Virginia and the length of such residency and whether such member has attained the age of eighteen (18) years;

4.2.l. If the applicant is a corporation, a statement whether the person who is or will be conducting or managing the business of the applicant is a citizen of the United States, resident of the State of West Virginia and whether such person has attained the age of eighteen (18) years;

4.2.m. Whether the applicant or any partner, member, manager, officer, director or person owning twenty percent (20%) or more of the stock or beneficial interest in the applicant:

4.2.m.1. Has been convicted of a felony or other crime involving moral turpitude within three (3) years next preceding the filing date of the application;

4.2.m.2. Has been convicted of a violation of the liquor laws of any state or the United States within two (2) years next preceding the filing date of the application; or

4.2.m.3. Had any license revoked under the liquor laws of any state or of the United States within five (5) years next preceding the filing date of the application;

4.2.n. Whether the applicant has entered into any exclusive franchise agreement with any manufacturer, producer, processor, distributor or supplier of wine which grants the applicant the exclusive right within the State of West Virginia or within any given territory thereof to distribute the product or products of the manufacturer, producer, processor, distributor or supplier;

4.2.o. If the applicant is a corporation, the names, addresses and corporate title of all officers, which statement shall include the name, address and age of all persons having twenty percent (20%) or more of stock or beneficial interest in the applicant;

4.2.p. Termination provision requirement. -- In addition to the application, the applicant must file with the Commissioner a copy of any written agreement between the applicant and any manufacturer, winery, farm winery or supplier for inclusion in the distributor's file at the Commissioner's office. Unless the parties have provided otherwise in the written agreement, either party may terminate the agreement upon serving written notice of termination by certified mail to the Commissioner and all parties to the agreement at least ninety days (90) prior to termination. Once appropriate notice of termination has been received, the distributor may use the termination period to deplete its affected wine inventory or to reach a written agreement with the manufacturer, winery, farm winery or supplier to return unused salable wine inventory or receive payment for unused salable wine inventory. During the termination period, the manufacturer, winery, farm winery or supplier may not appoint a new distributor to sell its products in this state. For purposes of this subsection, "salable" means inventory fit for human consumption.

4.3. Licensure application; signature and acknowledgment required. -- All applications shall be signed by the applicant and shall be made under oath and acknowledged or verified. In the case of a partnership, the application shall be signed by each of the partners. In the case of a limited partnership, the application shall be signed by each of the general partners and each limited partner who owns twenty percent (20%) or more of the capital or profits of such limited partnership. In the case of a voluntary association, all members of the governing board shall sign. In the case of a corporation, each officer and director shall sign.

4.4. Monthly report of distributor; form; content.

4.4.a. Every distributor must furnish a properly completed monthly report of the quantity of wine purchased and received from suppliers and sold to licensed retailers, private wine bed and breakfasts, private wine restaurants and private wine spas. This quantity shall be reported in liters or liter equivalents. The report must be filed before the sixteenth (16th) day of the month next succeeding the month for which the report is made and shall be made on Distributor's Summary of Wine Purchases, Sales & Inventory, or form WV/DIS-01 provided by the Commissioner.

4.4.b. A monthly report shall contain the following information:

4.4.b.1. The name, address, and telephone number of the distributor;

4.4.b.2. The month for which the report is being made;

4.4.b.3. The beginning and ending wine inventory for the month;

4.4.b.4. The name, address and license number of each supplier from which deliveries were received;

4.4.b.5. The total number of liters of wine purchased or received, and the total number of liters wine sold or transferred to licensed retailers, private wine bed and breakfasts, private wine restaurants and private wine spa;

4.4.2.6. The total amount of wines rendered unsalable by reasons of breakage, leakage, spoilage, shortages and use as samples as reported on the Tax Commissioner's Form WV/BLS-01, or as otherwise required by the Tax Commissioner;

4.4.2.7. Any transfers of wine in or out of the distributorship;

4.4.2.8. The identification, business telephone number and signature of the person preparing the report on behalf of the distributor attesting under the penalty of perjury under state law that the report is true and correct; and

4.4.2.9. Such other information as the Commissioner requires.

Each monthly report shall be acknowledged before a notary public in the manner provided upon the form and shall be considered tax returns under W. Va. Code § 11-10-1et seq.

4.5. Invoices required; content. -- Each distributor shall forward to the Commissioner with the monthly report one (1) copy of all invoices of all sales made to licensed retailers, private wine bed and breakfasts, private wine restaurants and private wine spas during the month for which the report is made. The invoice shall identify the licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa to which the distributor made sold to, the items sold by label identification and the quantity, stated in liters, and the alcohol content of each item sold.

4.6. Each monthly report must be filed in duplicate with the Tax Commissioner and the Commissioner. Distributors must report, collect, and remit all taxes, sales taxes, municipal taxes and the liter tax due to the state to the Tax Commissioner at the close of each month with the Distributor's monthly return and include the taxes paid for all sales and shipments to residents in West Virginia. The Tax Commissioner shall provide the Commissioner with a copy or a receipt of payment of the taxes. Failure to timely file the monthly reports within five calendar days before the sixteenth day of the month will subject the distributor to penalties under W. Va. Code § 60-8-18.

4.7. Bond. -- No license may be issued to any applicant for licensure as a distributor until the applicant has executed a surety bond in the penal sum of ten thousand dollars ($10,000), payable to the State of West Virginia. The bond shall be executed by a corporate surety authorized to transact business in the State of West Virginia. The bond shall be conditioned on the payment of all fees and taxes prescribed by the law and on the faithful performance of, and compliance with, the provisions of W. Va. Code § 60-8-1et seq., and the rules promulgated thereto. The bond required by this section shall be executed on Wine Distributor Bond, Alcohol Beverage Control Commissioner Form No, ABCC-WS-1-B.

4.8. Corporate charter, partnership agreement or association bylaws required. -- If the applicant for licensure as a wine distributor is a corporation, the applicant shall furnish the Commissioner a copy of its corporate charter, including any amendments thereto. If the applicant is a partnership, limited partnership or association, it shall provide a copy of the partnership agreement or the association's bylaws.

4.9. Fees. -- An applicant for licensure as a wine distributor shall remit with the application the annual distributor license fee is twenty-five hundred dollars ($2,500) for the distributor's license and a like amount for each separate warehouse or facility from which the distributor sells, transfers or delivers wine. The annual licensing period begins on July 1 of the year for which the application is made and ends on June 30 of the following year.

4.9.a. If the application is for licensure for less than an entire fiscal year, the fee shall be proportionate to the remainder of such year according to the date of application, as follows:

4.9.a.1. If application is made at any time from July 1 through December 31, the distributor shall pay the full annual fee.

4.9.a.2. If the application is made at any time from January 1 through June 30, the distributor shall pay one half (1/2) of the annual fee.

4.9.b. The annual fee or proportional share thereof is payable to the West Virginia Alcohol Beverage Control Commissioner by certified check, cashier's check or money order.

4.10. Investigations. -- Upon receipt of an application the annual fee, the bond and other documents required to be provided with an application, the Commissioner shall make a thorough investigation to determine whether the applicant and all locations and premises to be operated by the applicant pursuant to the license applied for qualify for licensure as a distributor and shall investigate all matters connected therewith, including, but not limited to, any matters which may affect the public welfare, health and morals.

4.11. Refusal of license. -- No license shall be issued to any applicant:

4.11.a. That submits an application for licensure that contains any false statement;

4.11.b. That is affirmatively shown to be not a suitable person in the community or communities in which it operates;

4.11.c. In which any partner, member, manager, officer, director or stockholder owning twenty percent (20%) or more stock or other person conducting or managing the affairs of the applicant or of the proposed licensed premises, in whole or in part:

4.11.c.1. Has been convicted of a felony or other crime involving moral turpitude within three (3) years next preceding the filing date of the application;

4.11.c.2. Has been convicted of violating the liquor laws of any state or the United States within two (2) years next preceding the filing date of the application;

4.11.c.3. Had any license revoked under the liquor laws of any state or the United States within five (5) years next preceding the filing date of the application; or

4.11.c.4. Fails to comply with the liquor laws or the rules or regulations of either this state or of the United States.

4.12. License not transferable. -- A license issued to a distributor is valid only for the person, firm or corporation named thereon. The license shall extend to all warehouses utilized by the licensee, firm or corporation for the distribution of wine to licensed retailers, private wine bed and breakfasts, private wine restaurants and private wine spas. A distributor license is not transferable. If there is a change in beneficial ownership of the distributor to the extent of twenty percent (20%) or less, the Commissioner shall be notified in writing by the distributor or the person changing the beneficial ownership of the distributor within ten (10) days next succeeding such transfer. If there is a change in the beneficial ownership of the distributor in excess of twenty percent (20%), the license shall be voided by the Commissioner and the licensee must make application for a new license. If there is a transfer in the beneficial ownership of any interest in a licensed distributor, irrespective of the amount thereof, the new ownership of such beneficial interest must comply with all laws of the United States and any rules and regulations promulgated pursuant thereto and with the laws of the State of West Virginia, including, but not limited to, the provisions of chapter sixty of the code and rules and regulations promulgated pursuant thereto.

4.13. Warehousing; copies of license to be posted; records required to be maintained at each warehouse; interdistributor coming of stock prohibited.

4.13.a. Each licensed distributor must have, prior to licensure sufficient and adequate warehouse facilities for the storage and distribution of wine. Facilities shall be located in a building which:

4.13.a.1. Which has adequate floor space to stock projected wine inventory in a safe manner;

4.13.a.2. Is not used as a dwelling place or a garage; and

4.13.a.3. Has adequate egress and ingress for delivery trucks.

4.13.b. If a distributor maintains separate warehouse facilities, a copy of his license must be displayed at each warehouse location.

4.13.c. If a licensed distributor has more than one warehouse to which the license applies and from which wine is distributed, each warehouse shall be regarded as a separate entity and any record, invoice or other document required by law or this rule to be kept by such distributor shall be physically maintained at each warehouse with respect to all wine received at and/or distributed from the warehouse.

4.13.d. Except as to interdistributor transfers that may be authorized by the laws of this State or by this rule, no licensed distributor may utilize in any manner the warehouse facilities of another licensed distributor or commingle the wine stock of any one distributor in any way with the wine stock of any another licensed distributor.

4.14. Change of location. -- Any distributor who desires or intends to change the location of his or her principal place of business or of any warehouses, or to acquire and utilize an additional warehouse for the distribution of wine during the period for which his her distributor license is current, shall notify the Commissioner in writing at least thirty (30) days before the date of the relocation or acquisition. No relocation or acquisition is permitted until the Commissioner issues his or her written approval. Provided, that in the case of fire or flood, the commissioner may waive the thirty (30) day advance notice upon request of the affected distributor.

4.15. Wine brand registration and review required. -- No wine may be sold by a supplier to a licensed distributor or by a licensed distributor to a licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa until the brand and the corresponding labels of such wine are reviewed and registered with the Commissioner and fees for such registration have been paid to the Commissioner.

4.16. Presales required; sales by route delivery men prohibited; invoices or purchase orders required.

4.16.a. No route delivery manor other person delivering wine from a distributor to a licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa may sell or deliver to the licensee any wine which the license did not previously order. All sales of wine from a distributor to a retailer, private wine bed and breakfast, private wine restaurant or private wine spa shall be upon order made by such licensee prior to the delivery thereof. All such sales shall be paid for in their entirety upon delivery. No distributor may transport any wine for which there is no invoice or purchase order.

4.16.b. No delivery shall be increased in the amount of wine delivered beyond that which has been previously ordered nor shall there by any substitution of any particular wine for another which has not been previously ordered.

4.17. Credit sales prohibited.

4.17.a. No distributor shall extend credit to a licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa, either in whole or in part, for any wine product received by the licensee. Every delivery of wine to a licensee shall be paid for in its entirety no later than the completion of such delivery. Credit sales include consignment sales. Each distributor must immediately, and in the regular course of business, deposit in a bank all checks given by a licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa, for the purchase of wine. No distributor may individually or through his or her agents or employees, enter into any agreement or understanding with any licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa, to hold any checks beyond the time required by this rule.

4.17.b. The giving of a worthless check by the licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa, to a distributor or the distributor's acceptance of a worthless check from the licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa, is prima facie evidence of an extension of credit and is, in the discretion of the Commissioner, grounds for the revocation or suspension of the licensed retailer's, private wine bed and breakfast's, private wine restaurant's, private wine spa's or distributor's license.

4.18. Split case sales permitted; charges. -- A distributor may distribute wine to a licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa, in either full cases containing only one (1) size and type of wine or a "split case" which is a case of wine which contains not more than one (1) size and type of wine. The distributor may impose a surcharge for a split case which shall be applied equally to every licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa to whom the distributor sells wine.

4.19. Transportation of wine or other alcoholic liquors by distributors. -- A distributor, by virtue of his or her license, may transport within this State any wine permitted to be sold at retail under the provisions of W. Va. Code § 60-8-1et seq. which wine has either been consigned to him, or for which the person actually transporting such wine has either an invoice or purchase order in his possession. A distributor may not transport any other alcoholic liquor without a transportation permit issued by the Commissioner.

4.20. Platform deliveries permitted. -- Platform deliveries or truck pickups at the licensed premises of a distributor by a licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa, are permitted so long as the person taking possession at the time of delivery is twenty-one (21) years of age or older.

4.21. Identification of distributor representatives and employees. -- Every promotional representative or other person soliciting (including, but not limited to, phone/internet/other media solicitation, in-person solicitation or other contact with retailers, suppliers or manufacturers) sales on behalf of a distributor must be licensed and must have an identification card provided by the distributor identifying the person as the distributor's representative and must exhibit the identification card on demand by any licensed retailer, private wine bed and breakfast, private wine restaurant, private wine spa or representative of the Commissioner. Every person (including, but not limited to, drivers and other delivery persons) delivering wine for a distributor must have an identification card provided by the distributor identifying the person as the distributor's employee and must exhibit the identification card on demand by any licensed retailer, private wine bed and breakfast, private wine restaurant, private wine spa or representative of the Commissioner.

4.22. Samples. -- With the approval of the Commissioner a distributors may give a sample to a licensed retailer, private wine bed and breakfast, private wine restaurant or a private wine spa, samples of any wine not then currently carried in the inventory of the licensee when such sample has been approved by the Commissioner and provided the licensee has an appropriate wine sampling or tasting license. No licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa may sell samples. All samples provided shall be noted on the distributor's monthly report required to be filed under the provisions of W. Va. Code § 60-8-4, and attached to the ABCC FORM WV/DIS-01, and on the Tax Commissioner's Form WVBLS-01, or as otherwise required by the Tax Commissioner. Samples may be no greater in amount than 750 milliliters, must be labeled with the word "Sample" clearly printed thereon in at least one inch point type and shall indicate that the product is not for sale.

4.22.a. Only a licensed distributor or its licensed representatives may give samples to a licensed retailer, private wine bed and breakfasts, private wine restaurants or private wine spas. Suppliers, and employees and representatives of suppliers, may not give samples to licensed retailers, private wine bed and breakfasts, private wine restaurants or private wine spas, but may accompany any distributor, or the representative or employee of any distributor, at the time the sample is given or delivered to any retailer, licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa.

4.22.b. Any person, firm or corporation who holds more than one (1) licensed retailer, private wine bed and breakfast, private wine restaurant or private wine spa license, may receive one (1) sample of any wine bearing the same label for each licensed establishment: Provided, That a the sample must be delivered separately to each such licensed establishment.

4.23. A distributor may rotate and stock wine in a grocery store or wine specialty shop; provided, that products purchased from other distributors are not altered or disturbed.

4.24. Every distributor representative must be licensed by the Commissioner and submit information as required by the Commissioner prior to licensure. No person may conduct wine samplings or wine tastings on a distributor's premises.

4.25. With the approval of the supplier, a distributor may sell, transfer or deliver wine to another licensed distributor a particular brand or brands of wine of which the other distributor may be out temporarily out of stock for sale at wholesale.

W. Va. Code R. § 175-4-4