Last month the New York State Liquor Authority (“NYSLA”) took under review the issue of “Bill and Hold”

invoicing and storage between wholesalers and retailers. The practice of Bill and Hold is when a licensed

wholesaler sells product to a licensed retailer without the product being delivered to the retailer’s

premises at the time of sale and instead can be stored at the wholesaler’s licensed premise or

warehouse on behalf of the retailer.

 

In order for a wholesaler and retailer to permissibly facilitate a Bill and Hold sale, it must follow the rules outlined under Advisory 2017-1. The advisory goes into detail to explain all the necessary requirements, which include but are not limited to:

 All retailers must be offered the Bill and Hold method of sale and not just specific retailers by the

choice of the wholesaler. The wholesaler is also under no requirement to offer a Bill and Hold

sales option. The wholesaler is not required to offer all of its products for sale under Bill and

Hold.

 Sales must be invoiced as of the date the retailer places the order and such date shall be

considered the date of delivery for determining the final payment date for sales made on credit.

 All products purchased through this sale must be stored at the wholesaler’s licensed premises or

permitted warehouse.

 The wholesaler must charge a market rate for storage even if it’s just for a single day. Market rate

is determined by calculating an average fee equal to the two closest third party warehouse

storage prices. No fee changes can be made to storage prices without 60 days’ notice to

retailers.

By: Oren Cytrynbaum