Bill Text: IL SB3730 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Liquor Control Act of 1934. Provides that a licensee with a combined on-premises and off-premises license may make purchases for on-premises use only through an on-premises cooperative purchase group and may make purchases for off-premises use only through an off-premises cooperative purchase group. Provides that neither a cooperative agent nor a cooperative purchase group may receive cash or anything of value from a retail licensee or an importing distributor or distributor, non-resident dealer, or manufacturer as part of a cooperative purchasing agreement. Removes language providing that a cooperative agent that is compliant with certain provisions may receive cash or anything of value from both the retail licensee and an importing distributor or distributor, non-resident dealer or manufacturers as part of a cooperative purchase group agreement. Provides that cooperative agents and cooperative purchase groups may not have an ownership interest, direct or indirect, in any business or enterprise that provides marketing services or activities on behalf of manufacturers, non-resident dealers, foreign importers, importing distributors, and distributors. Provides that it is the duty of every cooperative agent and cooperative purchase group to make books and records available upon reasonable notice for the purpose of investigation and control by the Illinois Liquor Control Commission or any local liquor commission having jurisdiction over a licensee member of a cooperative purchase group. Makes changes concerning the surety bond a cooperative purchase group is required to retain. Changes references from "cooperative purchasing group" to "cooperative purchase group" to conform to the defined term.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-06-26 - Pursuant to Senate Rule 3-9(b) / Referred to Assignments [SB3730 Detail]

Download: Illinois-2023-SB3730-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3730 Introduced 2/9/2024, by Sen. Cristina Castro SYNOPSIS AS INTRODUCED:
235 ILCS 5/6-9.10
235 ILCS 5/6-9.15
Amends the Liquor Control Act of 1934. Provides that a licensee with a combined on-premises and off-premises license may make purchases for on-premises use only through an on-premises cooperative purchase group and may make purchases for off-premises use only through an off-premises cooperative purchase group. Provides that neither a cooperative agent nor a cooperative purchase group may receive cash or anything of value from a retail licensee or an importing distributor or distributor, non-resident dealer, or manufacturer as part of a cooperative purchasing agreement. Removes language providing that a cooperative agent that is compliant with certain provisions may receive cash or anything of value from both the retail licensee and an importing distributor or distributor, non-resident dealer or manufacturers as part of a cooperative purchase group agreement. Provides that cooperative agents and cooperative purchase groups may not have an ownership interest, direct or indirect, in any business or enterprise that provides marketing services or activities on behalf of manufacturers, non-resident dealers, foreign importers, importing distributors, and distributors. Provides that it is the duty of every cooperative agent and cooperative purchase group to make books and records available upon reasonable notice for the purpose of investigation and control by the Illinois Liquor Control Commission or any local liquor commission having jurisdiction over a licensee member of a cooperative purchase group. Makes changes concerning the surety bond a cooperative purchase group is required to retain. Changes references from "cooperative purchasing group" to "cooperative purchase group" to conform to the defined term.
LRB103 38678 RPS 68815 b
A BILL FOR
SB3730 LRB103 38678 RPS 68815 b
AN ACT concerning liquor.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Liquor Control Act of 1934 is amended by
changing Section 6-9.10 as follows:
(235 ILCS 5/6-9.10)
Sec. 6-9.10. Cooperative purchasing agreements.
(a) A cooperative purchasing agreement shall only be valid
if the following conditions are met:
(1) the agreement is in writing and signed by all
parties to the agreement;
(2) the agreement contains the complete license
information for all parties to the agreement, including
State and local license numbers and expiration dates as
well as the date on which the retail member joined the
cooperative purchase group;
(3) a retail licensee that is a party to the agreement
must not be a party to any other related cooperative
purchasing agreement;
(4) the agreement identifies and designates the name
and address of the agent or agents with the authority to
contract for the purchase and delivery of wine or spirits
on behalf of the cooperative purchase group;

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(5) a copy of the executed agreement, including any
amendments, deletions, or additions, is kept on the
premises of each party to the agreement for a period of 3
years;
(6) a copy of the executed agreement, including any
amendments, deletions, or additions, is delivered to the
relevant licensee with distribution privileges and to the
State Commission before making any purchases under the
agreement; any amendments, deletions, or additions must be
submitted to the State Commission within 7 business days
after the amendment, deletion, or addition is executed;
and
(7) the agreement must designate whether the
cooperative purchase purchasing group is comprised of
retail licenses engaged in the sale of wine or spirits on
or off the premises.
(b) A retail licensee may, pursuant to a cooperative
purchasing agreement, make purchases as a member of a
cooperative purchase group or independently of any such group.
Nothing in this Section or any other Section of this Act shall
be construed to prohibit commonly or not commonly owned retail
licensees from making purchases separate and apart from any
membership in a cooperative purchase group.
(c) A retailer may only be a member of one cooperative
purchase group at a time. A retail licensee may change to a
different cooperative purchase group no more than twice in a

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12-month period. However, if an existing cooperative purchase
group member purchases a retail location from a member of
another cooperative purchase group, the new owner of the
retail location may move the membership of the retail licensee
to a different cooperative purchase purchasing group.
(d) When a retail licensee joins an existing cooperative
purchase purchasing group, the new member must be a member for
a period of 7 days before being able to participate in any
quantity discount programs.
(e) Cooperative purchase purchasing group members must be
either all on-premises retail licensees or all off-premises
retail licensees. A licensee with a combined on-premises and
off-premises license may make purchases for on-premises use
only through an on-premises cooperative purchase group and may
make purchases for off-premises use only through an
off-premises cooperative purchase group.
(f) Any individual retail licensee that is a member of a
cooperative purchase group that fails to comply with the terms
and conditions of this Section may be deemed to be in violation
of Section 6-5. Any distributor or importing distributor that
fails to comply with this Section may be deemed to be in
violation of Section 6-5.
(g) The State Commission shall keep a list of the members
of each cooperative purchase group and shall make that list
available on its website.
(h) A retail licensee that is a member of a cooperative

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purchase group shall not have an ownership interest, directly
or indirectly, in any entity licensed by this Act other than a
retailer.
(i) It is unlawful for a distributor or importing
distributor to furnish, give, or lend money or anything of
value to a cooperative agent.
(j) It is the duty of each retail licensee of the
cooperative purchase group to make books and records available
upon reasonable notice for the purpose of investigation and
control by the State Commission or any local liquor control
commission having jurisdiction over the retail licensee of the
cooperative purchase group.
(k) A cooperative agent shall not have an ownership
interest, directly or indirectly, in an entity licensed under
any other license category under this Act.
(l) A retailer, manufacturer, importing distributor,
distributor, or cooperative agent shall remain in compliance
with federal law pursuant to the prohibitions and exceptions
provided in 27 CFR Part 6 and any promulgated rules thereof.
Neither a A cooperative agent nor a cooperative purchase group
may that is compliant with Sections 6-5 and 6-6 shall not
receive cash or anything of value from a both the retail
licensee or and an importing distributor or distributor,
non-resident dealer, or manufacturer manufacturers as part of
a cooperative purchasing group agreement. Cooperative agents
and cooperative purchase groups may not have an ownership

SB3730 - 5 - LRB103 38678 RPS 68815 b
interest, direct or indirect, in any business or enterprise
that provides marketing services or activities on behalf of
manufacturers, non-resident dealers, foreign importers,
importing distributors, and distributors. Cooperative agents
and cooperative purchase groups and owners thereof are
strictly prohibited from, directly or indirectly, accepting
things of value from, or providing marketing services or
activities on behalf of, manufacturers, non-resident dealers,
foreign importers, importing distributors, and distributors.
Cooperative agents and cooperative purchase groups, as agents
of retail licensees, are subject to the obligations and
restrictions of retail licensees, including, but not limited
to, Section 6-5, Section 6-6, Section 10-3, and 11 Ill. Adm.
Code 100.500.
(m) It is the duty of every cooperative agent and
cooperative purchase group to make books and records available
upon reasonable notice for the purpose of investigation and
control by the State Commission or any local liquor commission
having jurisdiction over a licensee member of a cooperative
purchase group.
(Source: P.A. 102-442, eff. 8-20-21.)
Section 10. The Liquor Control Act of 1934 is amended by
changing Section 6-9.15 as follows:
(235 ILCS 5/6-9.15)

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Sec. 6-9.15. Quantity discounting terms for wine or
spirits cooperative purchase agreements.
(a) All wine or spirits quantity discount programs offered
to consumption off the premises retailers must be offered to
all consumption off the premises cooperative groups and
cooperative agents, and all quantity discount programs offered
to consumption on the premises retailers shall be offered to
all consumption on the premises cooperative groups and
cooperative agents. Quantity discount programs shall:
(1) be open and available for acceptance for 7
business days;
(2) be designed and implemented to produce product
volume growth with retail licensees;
(3) be based on the volume of product purchased;
however, discounts may include price reductions, cash, and
credits, and no-charge wine or spirits products may be
given instead of a discount;
(4) be documented on related sales invoices or credit
memoranda;
(5) not require a retail licensee to take and dispose
of any quota of wine or spirits; however, bona fide
quantity discounts shall not be deemed to be quota sales;
and
(6) not require a retail licensee to purchase one
product in order to purchase another; this includes
combination sales if one or more products may be purchased

SB3730 - 7 - LRB103 38678 RPS 68815 b
only in combination with other products and not
individually.
(b) A distributor or importing distributor that makes
quantity discount sales to participating members of a
cooperative purchase group shall issue customary invoices to
each participating retail licensee itemizing the wine or
spirit sold and delivered as part of a quantity discount
program to each participating retail licensee.
(c) If a distributor or importing distributor offers a
quantity discount for wine or spirits, excluding any product
fermented with malt or any substitute for malt, cooperative
purchase groups shall purchase a minimum of 250 cases in each
quantity discount program. Each individual participating
member of a cooperative purchase group purchasing product
through a quantity discount program may be required to
purchase the following minimum amounts:
(1) 2% of cases of any quantity discount program of
500 or fewer cases.
(2) 1.5% of cases of any quantity discount program of
at least 501 and not more than 2,000 cases.
(3) 1% of cases of any quantity discount program of
2,001 or more cases.
(d) The cooperative agent shall place each cooperative
purchase order under the name of the cooperative purchase
group and shall identify each participating retail member
involved with the purchase, the quantity of product purchased,

SB3730 - 8 - LRB103 38678 RPS 68815 b
the price attributable to each retailer member's purchase, and
a requested delivery date. A retail licensee may make
purchases through a cooperative purchase purchasing group or
independently of such group. Nothing in this Section shall be
construed to prohibit retail licensees from making purchases
separate and apart from any cooperative purchase purchasing
group.
(e) Each distributor or importing distributor shall
separately invoice each participating cooperative purchase
group member for the purchase made on behalf of such
participating member.
(f) A cooperative purchase purchasing group shall maintain
the records of each cooperative purchase order placed for 90
days. The records shall include:
(1) the date the cooperative purchase purchasing group
order was placed and the date of any amendments to the
order;
(2) the distributor or importing distributor with
which the cooperative purchase purchasing group placed the
order;
(3) the names and license numbers of each cooperative
purchase purchasing group member participating in the
order;
(4) the price discounts and net price of all wine or
spirits ordered by each cooperative purchase group member;
and

SB3730 - 9 - LRB103 38678 RPS 68815 b
(5) the requested delivery date for the order.
(g) A cooperative purchase group is subject to the books
and records requirements of Section 6-10 and subsection (e) of
11 Ill. Adm. Code 100.130.
(h) A cooperative purchase purchasing group shall retain a
surety bond in favor of each distributor with which it
conducts business at all times for no less than $250,000. The
bond shall provide a street address at which bond claims may be
submitted. If a cooperative purchase purchasing group member
is delinquent in payment pursuant to Section 6-5 on a purchase
made through a cooperative purchase group or directly between
the cooperative member and a distributor, the surety shall
immediately pay the importing distributor or distributor the
delinquent amount, unless the delinquent member submits a bona
fide dispute to the State Commission within 5 business days.
The surety bond required by this Section may be acquired from a
company, agent, or broker of the cooperative purchase group's
choice. If the surety bond does not cure the indebtedness
within 5 business days after receipt of the demand and if the
delinquent member has not submitted a bona fide dispute to the
State Commission, the 30-day merchandising credit requirements
of Section 6-5 shall apply jointly to each cooperative
purchase purchasing group until the indebtedness is cured. The
cooperative purchase purchasing group is responsible for all
costs and fees related to the surety bond.
(i) Any licensee that fails to comply with the terms and

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