Request By:
Mr. Richard H. Lewis
Commissioner
Department of Alcoholic Beverage Control
123 Walnut Street
Frankfort, Kentucky 40601
Opinion
Opinion By: Steven L. Beshear, Attorney General; Reid C. James, Assistant Attorney General
This is in response to your request for an opinion of this office regarding the importation of malt beverages into this state by Kentucky distributors. You relate that a Washington, D.C., distributor, holding a valid wholesale beer license for the District of Columbia, has filed an agreement with your office, together with the surety bond required by 804 KAR 4:190, to do business with distributors in Kentucky. You state that a permit was issued to this Washington distributor pursuant to this agreement on July 7, 1980, allowing the importation of beer into Kentucky to a licensed wholesale beer distributor. You also note that in addition to the surety bond filed with the Department of Alcoholic Beverage Control, the out-of-state distributor has filed a bond and qualified with the Kentucky Department of Revenue pursuant to KRS 243.730. It is my understanding that while this Washington distributor furnishes invoices to Kentucky distributors for the beer purchased and trans orted by that distributor, the beer is actually picked up from distributors and retailers other than the Washington distributor and in states other than the District of Columbia.
Based on this factual situation you ask:
1) Does the Kentucky Distributor have a right to transport beer by his vehicle from a distributor or retailer from another state other than the District of Columbia where the Washington based wholesaler is licensed, since the other distributors or retailers have no agreement or surety bond on file with this Department or the Department of Revenue, AND
2) Does the Washington based wholesaler have a legal right to give invoices to the Kentucky distributor for the beer that the Kentucky distributor picks up from the distributor and retailers in other states?
It is our opinion that a Kentucky distributor may not purchase or transport beer from a distributor or retailer having no agreement or surety bond on file with the Department for Alcoholic Beverage Control or the state Department of Revenue. KRS 243.180(1) provides in pertinent part:
A distributor's license shall authorize the licensee to purchase malt beverages from Kentucky breweries or from out-of-state breweries or distributors licensed to do business by the state in which they are located. . . (Emphasis ours).
804 KAR 4:190, which relates to KRS 243.180 and provides a more complete designation of those brewers and distributors who may sell malt beverages to distributors in Kentucky states:
Any brewer distributor licensed to do business by the state in which they are located, . . . who desires to sell malt beverages to a Kentucky licensee for the purpose of importation into Kentucky and resale therein, in order to qualify under this regulation, shall file with the Department's malt beverage administrator, a surety bond in the penal sum of $1,000 payable to the Commonwealth of Kentucky and conditioned on the principal's faithful performance and discharge of an agreement made with the Kentucky Alcohol Beverage Control Department; and no Kentucky licensee shall purchase, receive or import any malt beverages from any such brewer distributor or importer, located outside of this state unless said agreement and surety bond as provided in this section has been accepted by said department and approved by the malt beverage administrator and is concurrently effective. . . . (Emphasis ours).
Notably KRS 243.180 does not permit a Kentucky distributor to purchase and transport beer from an out-of-state retailer. The statute limits such dealings to foreign brewers and distributors. These foreign brewers or distributors must, by that statute, be licensed to do business in the state where they are located, and must, under 804 KAR 4:190, have entered into an agreement with the Department's malt beverage administrator and have posted a surety bond of $1,000. If the Kentucky distributor deals with foreign brewers or distributors other than those meeting these criteria, he is in violation of this state's alcoholic beverage control laws. Kentucky distributors must deal directly with qualified foreign distributors. Under the facts you have presented a Kentucky distributor may purchase and transport malt beverages in his vehicles from the Washington based distributor, receiving said goods at the foreign distributor's District of Columbia address. He may not however transport malt beverages from the distributor in a state other than the District of Columbia or from a distributor who does not meet the criteria established by the above-referenced statute and regulation.
In response to your second inquiry, it is our opinion that the Washington based wholesaler does not have a right to give invoices to Kentucky distributors for beer picked up by the Kentucky distributor from distributors and retailers in other states. KRS 244.560(1) provides,
No brewer or distributor, his agents or employees, shall make any sale or delivery of any malt beverage without a written invoice made concurrently with the sale or delivery, showing prices and condition upon which the sale or delivery is made; make any invoice which falsely indicates prices and terms of any sale; insert in any invoice any statements which make the invoice a false record, wholly or in part, of the transaction involved or represented on the face of the invoice; or withhold from any invoice any statement which properly should be included in it so that in the absence of such a statement the invoice does not truly reflect the transaction involved.
Under the facts as presented the invoices given by the Washington distributor are apparently not being made concurrently with the sale or delivery of the malt beverages, and depending upon their content, do not represent a true record of the transaction involved.