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OLCC offers its own liquor law reforms

February 3, 2014

Associated Oregon Industries
Oregon’s largest business advocate

Partially in response to the Northwest Grocers’ Association recent filing of five ballot measures allowing privatization of liquor sales in Oregon, the Oregon Liquor Control Commission (OLCC) rolled out legislation intended to improve the state’s current system.  The bill, LC 242, is still in draft form, but represents hours of work on the part of OLCC’s stakeholder group.  Highlights of the bill relating to retailers and grocers are as follows:

Retail Sales Agents

  • LC 242 would allow authorized retailers to set their own prices on liquor (distilled spirits), over and above the minimum price established by the OLCC;
  • OLCC will continue to own all distilled spirits until sold to the consumer, at which point the retailer must submit the wholesale price of that sale to the OLCC;
  • OLCC may require, as a condition of authorization to sell liquor, that the retailer invest a flat amount or a percentage of distilled liquor profits into store maintenance and improvements;
  • In light of the fact that Oregon’s craft distillers produce over 400 unique products, LC 242 also allows OLCC to require that retailers allot a specified amount of the distilled liquor sales area to the stocking and promotion of distilled liquor that is manufactured, blended or bottled in Oregon.

Grocers

  • Grocers with distilled spirits endorsement may set their own prices, over and above the OLCC established minimum price;
  • OLCC may sell distilled spirits to grocers at state wholesale price – as long as the grocer pays in cash or by EFT prior to delivery.  In this case, liquor becomes the property of the grocer immediately upon purchase, although sale of the liquor remains subject to governance by the commission;
  • OLCC may set minimum order requirements and require purchases of 750 ml bottles or greater (fifths).

Endorsement Requirements

  • Off-premises licensees must be larger than 10,000 square feet (Oregon has about 650 such stores);
  • An applicant must submit plans describing:
    • Public Safety Plan:  How product will be secured; how theft will be prevented; and how sales to minors will be prevented;
    • Oregon Products Plan:  How Oregon distillery products will be promoted and how the licensee will maintain shelf space previously devoted to the sale of wine, cider, and malt beverages produced in Oregon.
  • OLCC can suspend or cancel the endorsement for any violation that would be grounds for license suspension.

Implementation Timeline

Effective on Passage:

  • January 1, 2015
    • Commission to begin issuing endorsements.
  • March 1, 2015
    • Endorsement holder may begin selling distilled spirits to the public;
    • Retail sales agents must have a renegotiated agreement in order to sell distilled spirits;
    • All agent agreements not renegotiated will be terminated.
  • September 1, 2015
    • OLCC report to the Legislative Assembly.
  
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