N.J. Admin. Code § 13:2-26.1

Current through Register Vol. 56, No. 21, November 4, 2024

Section 13:2-26.1 - Restrictions on cooperative purchases

(a) A Class C retail licensee, as defined in 33:1-12, may join with another Class C licensee in a cooperative agreement for the purchase and transportation of alcoholic beverages, provided that such agreement and activity shall conform to the following standards:

1. The cooperative may hire employee(s) to act in an administrative or management capacity for the cooperative's purchase, storage and transportation of alcoholic beverages, provided:

i. The employee meets with the qualification requirements of 33:1-25 and 13:2-14.5;

ii. The employee applies for and receives a permit from the Director of the Division of Alcoholic Beverage Control upon a format prescribed by the Director; and

iii. The employee has no ownership of, employment with or financial interest in a Class A, B or C license;

2. The number of Class C licensees joined in any agreement shall not exceed the largest number of plenary retail distribution licenses, as defined in 33:1-12(3)(a), issued to any one person or entity in this State at the time of the prior most recent annual renewal of such licenses;

3. No cooperative agreement may prohibit any licensee from joining any other cooperative agreement;

4. No cooperative agreement may prohibit any retailer from advertising or selling any product at any otherwise lawful price;

5. Any licensee may withdraw from any cooperative agreement upon 30 days written notice and no penalties may be charged for such withdrawal;

6. All purchases on credit through or by cooperative agreement shall be reduced to writing, signed by the wholesaler and each individual participating member of the cooperative, and be consistent with the credit provisions of N.J.A.C. 13:2-24. Such credit terms shall include adequate assurances of payment by each individual participating member by either the posting of a bond by the cooperative member or a provision that each member of the cooperative shall be jointly and severally liable for payment for the purchases made through the cooperative. A copy of such written agreements shall be maintained by the wholesaler in its marketing manual and by the registered buying cooperative;

7. All individual purchases through or by cooperative agreement shall be separately invoiced consistent with 13:2-20.4, and shall contain the cooperative's registration number;

8. All purchases through or by cooperative agreement shall be transported consistent with N.J.A.C. 13:2-20, 33:1-13 and 33:1-28;

9. No licensed party to a cooperative agreement shall co-mingle inventory, funds or other assets inconsistent with this subchapter and 13:2-23.21;

10. Any purchase or transfer in violation of the New Jersey Alcoholic Beverage Control Act, 33:1-1 et seq. or the regulations promulgated thereunder, shall be a violation by all members of the cooperative purchase agreement;

11. Nothing herein shall be deemed to require the servicing of any cooperative agreement with quantity or cash discounts if there exists no corresponding justification for the differential pursuant to 13:2-24.1(b)1;

12. Each registered cooperative buying group may maintain a public warehouse provided that the cooperative complies with 33:1-14, the cooperative public warehouse maintains assigned space for each individual participating member, and the inventory is transferred to that space within 72 hours after delivery pursuant to N.J.A.C. 13:2-23.21. All purchases through or by the cooperative agreement must be transported to and from the warehouse consistent with 33:1-13, 33:1-28 and N.J.A.C. 13:2-20; and

13. Each registered cooperative buying group may maintain a bank account and invoice, assess and charge its members for the cost and expense, including capital and operational expenditures, of establishing, maintaining and providing services.

(b) No cooperative buying group may participate in any business transaction permitted by (a) above, unless the cooperative is registered with the Division in a form prescribed by the Director. Such registration shall include:

1. The identity and State issued license numbers of the members;

2. A copy of the cooperative agreement;

3. A fee of $15.00 per member; and

4. The issuance of a special permit by the Director, which shall be renewable annually on August 1.

N.J. Admin. Code § 13:2-26.1

New Rule, R.1979 d.138, effective 5/1/1979.
See: 11 N.J.R. 143(a), 11 N.J.R. 257(c).
Amended by R.1980 d.72, effective 2/11/1980.
See: 11 N.J.R. 285(b), 12 N.J.R. 156(a).
Amended by R.1980 d.304, effective 7/3/1980.
See: 12 N.J.R. 343(b), 12 N.J.R. 494(b).
Amended by R.1990 d.412, effective 8/20/1990.
See: 22 N.J.R. 1811(a), 22 N.J.R. 2508(c).
In (a), stylistic revisions; corrected references.
Amended by R.1995 d.450, effective 8/21/1995.
See: 27 N.J.R. 2051(a), 27 N.J.R. 3177(a).
Amended requirements for cooperative employees at (a)1 and added (a)12 and (a)13.
Amended by R.2006 d.67, effective 2/21/2006.
See: 37 N.J.R. 3221(a), 38 N.J.R. 1193(a).
Added (b)3; recodified former (b)3 as (b)4.