STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DIVISION OF BEVERAGE, )

)

Petitioner, )

)

vs. ) CASE NO. 75-1921

) DABT CASE NO. 8-75-526A CROWN LIQUORS OF BROWARD COUNTY, )

INC., d/b/a CROWN LIQUORS NO. 1, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated hearing officer, K. N. Ayers, held a public hearing in the above styled cause on February 18, 1976 in Miami, Florida.

APPEARANCES

For Petitioner: Charles Tunnicliff, Esquire

Staff Attorney

Department of Business Regulations The Johns Building

Tallahassee, Florida

For Respondent: Seymour Chadroff, Esquire

120 North Biscayne Boulevard, Suite 2806 Miami, Florida 33132

and Allen S. Rosenthal

1333 North East 163rd Street North Miami Beach, Florida

By notice to show cause dated July 10, 1975, the Division of Beverage seeks to assess civil penalty against or to suspend or revoke the Beverage License of Crown Liquors of Broward County, Inc. trading as Crown Liquors No. 1, Respondent herein. As grounds for such action it is alleged that on March 18 and 19, 1975 and on April 8, 1975 licensee accepted direct or indirect financial aid from Southern Wine and Spirits, a wholesale distributor, in the form of different rates or discounts in violation of s. 561.42(1) and (10) Florida Statutes. Five witnesses were called by the Division of Beverage and one witness testified on behalf of Respondent. Six exhibits were admitted into evidence.

FINDINGS OF FACT

1. Following receipt of a complaint that Respondent was selling a particular brand of whiskey at a price lower than the whiskey dealer could buy, the various invoices received by Respondent were checked against the deal sheets in effect by Southern Wine and Spirits between January 1 and April 30, 1975. Exhibit 1 is a worksheet showing gross case purchases made by Crown from

   Southern during this period. Exhibit 2 is a copy of various deal sheets in effect during this period. Exhibit 3 shows a summary of Crown's purchases with the deals in effect as contained in Exhibit 2 and the three instances alleged where Crown appears to have been given a larger discount than the deal sheets indicate were proper.

   
   

2. These figures and the exhibits show that on March 18 and 19 a 4,000 case deal was in effect and that on invoices dated March 18 Crown received 1,010 cases and on invoices dated March 19 Crown received 1,989 cases of whiskey. Neither total included bottles which when consolidated into cases would produce an additional 25 cases on March 18 and 61 cases on March 19. Total purchases from Southern Wine on March 18 and 19 was 3,085 cases.

   
   

3. The invoice dated April 8 showed Crown received 2,913 cases from Southern and at this time the 3,000 case deal was in effect. (Exhibit 2). Crown was allowed the discount for 3,000 cases on this invoice.

   
   

4. J. Willard Weiss, the Senior Vice President and Chief Executive Officer of Southern Wine and Spirits, makes many oral deals with the three or four chains large enough to buy in quantities of 3,000 or more cases at one time. When he offers such a deal to one of the large chains he calls the other chains capable of using the deal to make the same offer to them. He could have negotiated a 3,000 case deal with Crown in mid-March which would have been effective on the 18th of March.

   
   

5. Southern has the capability of loading and delivering only 9,000 to 10,000 cases of whiskey per day. Crown submits orders on a weekly basis and Weiss remembered no occasion when Crown submitted two orders in one week. If the Crown order came in late in the day, or enough orders were ahead of Crown's that would have exceeded Southern's delivery capacity for the day, the computer would split the Crown order into two invoices. According to Weiss, this would account for the invoices on March 18 and 19 although the total cases involved in the two inventories were ordered by Crown on one order. This would make Crown's order exceed 3,000 cases and entitle them to the discount given.

   
   

6. The invoices used to prepare Exhibits 1 and 3 show the amount of whiskey shipped not necessarily the amount ordered. Occasionally Southern is out of a particular brand or brands, and if the purchaser ordered enough cases to qualify for a deal, Southern would give credit for the cases ordered even though the invoices may show less cases shipped than would qualify for the deal.

   
   

7. Stanley Kassal is President of Crown and does all of the ordering. His

   25 stores submit a weekly inventory to him and on Monday he orders for each store. He is always trying to get better deals from wholesale suppliers and orders to meet the deal requirements, if possible. He never submits orders more than once per week. If one of the retail stores sells out of a particular brand it remains without that brand until the next weekly delivery. Kassal approves all advertising and sets all prices in the stores. Sometimes he advertises a particular brand at less than cost. His store managers do not know what has been ordered for their store until the shipment arrives. If the wholesaler was out of a brand that was ordered by Kassal the store manager would not know that the brand had been ordered.

   CONCLUSIONS OF LAW

   
   

8. Section 561.42(1) Florida Statutes, with which Crown is herein charged with violating provides in pertinent part:

   
   

   "No licensed vendor shall accept, directly or indirectly, any gift or loan of money or property of any description, or any rebates from any such licensed manufacturer or distributor."

   
   

9. Rule 7A-1.10FAC provides:

   
   

   "The term 'deal' shall apply to the giving of free goods or things of value as a reward for purchasing any given quantity of alcoholic beverages either at one time or over a period of time; and as such they are prohibited."

   
   

10. Although the "deals" and "deal sheets" referred to in this proceeding would appear to be banned by the provisions of the rule above quoted it clearly appears that such "deals" as herein were involved are proper provided they apply equally to all purchasers. Such "deals" may properly be called discounts. A proposed rule (7A-4.47 FAC) to provide that all discounts are in violation of s.

    561.42 Florida Statutes unless they are for cash at the time of sale, they are offered to all vendors buying similar quantities, and the discount is related to a single transaction was admitted into evidence as Exhibit 6.

    
    

11. Here there was no evidence that Crown received any special rebate from Southern that was not offered to all other vendors. The invoices of March 18 and 19 were obviously the result of one order by Crown and an oral 3,000 case deal was in effect which allowed the discount given. While the invoice of April 8, 1975 showed Crown received only 2,913 cases (including bottles) and may not have qualified for the 3,000 case deal, it is more likely that the order submitted was in excess of 3,000 cases and Southern was out of some 2.5 percent (87 cases of various brands) of the total ordered.

    
    

12. From the foregoing it is concluded that Crown Liquors of Broward, Inc. is not guilty of violation of s. 561.42(1) and (10) Florida Statutes as alleged. No evidence was submitted with respect to subsection (10). It is therefore,

RECOMMENDED that the charges against Crown Liquors of Broward, Inc. be dismissed.

DONE and ENTERED this 18th day of March, 1976, in Tallahassee, Florida.

K. N. AYERS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

Docket for Case No: 75-001921

Orders for Case No: 75-001921