Untitled Texas Attorney General Opinion ( 1991 )

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GENERAL May 17,199l
Honorable Erwin W. Barton Opinion No. DM-SA (Clarification)
chairman
Human Services Committee Re: Whether section 102.51 of the Alcoholic
Texas House of Representatives Beverage Code imposes a territorial limita-
P.O. Box 2910 tion on the resale of beer by local distri-
Austin, Texas 78769-2910 butors (RQ-2151)
Dear Representative Barton:
You ask about the territory in which a local beer distributor may resell beer.
Your question requires an interpretation of both section 102.51 and section 102.52
of the Alcoholic Beverage Code. Section 102.51 provides in part:
(a) Each holder of a marmfacturer’s or nonresident
mamrfacturer’s license shall designate territorial limits in this
state within which the brands of beer the licensee mamrfactures
may be sold by general, local, or branch distributor’s licensees.
(b) Each holder of a general, local, or branch distributor’s
license shall enter into a written agreement with each
manufacturer from which the distributor purchases beer for
distribution and sale in this state setting forth the sales territory
within which each brand of beer purchased by that distributor
may be distributed and sold. No holder of a general, local, or
branch distributor’s license shag make any sales of any brand of
beer outside the sales territory specified in the written
agreement.
Section 102.52 provides as follows:
(a) Nothing in Section 10251 of this code limits or alters the
right of a holder of a general, local, or branch distributor’s
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Honorable Erwin W. Barton - Page 2 (DM-5A)
license to sell beer to any other holder of a general, local, or
branch distributor’s license, except that a distributor who has
purchased beer from another distributor may distribute and sell
the beer only within a territory for which the mamtfacturer of
the brand has designated that it may be sold by a distributor.
(b) A holder of a general, local, or branch distributor’s
license may not purchase, possess, transport, or sell any brand of
beer outside of the county in which the distributor’s licensed
premises are located unless the distributor has a written
assigned territory from the holder of a manufacturer’s or
nonresident manufacturer’s license covering that brand of beer.
You interpret sections 102.51 and 102.52 to mean that local distributors are
required to limit beer distribution to the territories in which general distributors
may resell beer. See genenrlly Alto. Bev. Code 5%64.01. 66.01 (holder of general
distributor’s license or branch distriiutor’s license may sell beer to and receive beer
from general, local, or branch distributors). You also inform us that some local
distributors have taken the position that those provisions permit them to resell a
particular brand in any part of the state in which the manufacturer permits the sale
of that brand. Neither of these interpretations is entirely correct. The correct
interpretation depends on whether the local distributor purchased beer directly
from a manufacturer or from a general distributor. When the local distributor
purchases beer directly from the manufacturer, the statutes make clear that the
distributor may distribute a particular brand of beer only in the territory assigned to
the local distriiutor by the manufacturer. When a local distributor purchases beer
from another distributor, sections 102.51 and 102.52 limit the territory where the
local distributor may resell the beer to the territory assigned to the general
distributor by the manutkturer from whom the general distrib.utor originally
purchased the beer.
In response to your suggestion that a local distributor may resell a brand of
beer purchased from a general distriiutor in the territory assigned to the general
distributor, we note that subsection (b) of section 102.51 states that a holder of a
local distributor’s license may not “make any sales of any brand of beer outside the
sales territory specified in the written agreement.” Nothing in that language
suggests that the territorial limitation applies only to beer a general distributor
purchases directly from a manufacturer. Further, subsection (b) of section 102.52
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Honorable Erwin W. Barton - Page 3 (DM-5A)
states that a holder of a local distributor’s license may not sell any brand of beer
outside the county of the distributor’s licensed premises “unless the distributor has a
written assigned territory from the holder of a manufacturer’s or nonresident
mamtfacturer’s license covering that brand of beer.” Those provisions clearly
disallow the possibility that a local distributor can expand his assigned territory or a
territory assigned to a general distributor by purchasing beer from the general
distributor rather than from the manufacturer.
Those provisions negate the local distributors’ suggestion that a local
distributor who purchases a brand of beer from a general distributor, rather than a
manufacturer, may sell that beer in any territoty in which that brand may be sold by
my distributor. Subsection (a) of section 102.52 does contain a clause stating that “a
distriiutor who has purchased beer from another distributor may distribute and sell
the beer only within a territory for which the manufacturer of the brand has
designated that it may be sold by a distributor.” Standing alone, that language might
support the local distributors’ suggestion. That interpretation is, however, in direct
conflict with subsection (b) of section 102.51 and subsection (b) of section 102.52,
both of which limit a local distributor’s authority to sell beer to the territory assigned
to the general distributor by the manufacturer when the local distributor purchases
from the general distributor. Since subsection (b) of section 102.51 and subsection
(b) of section 10252 were both enacted later than subsection (a) of section 102.52,
those provisions prevail. Taas State Board of Pharmacy v. K&man, 550 S.W.2d 104
(Tex. Civ. App.--Tyler 1977, no writ) (when statutes conflict, later-enacted prevails);
see Acts 1983,6&h Leg., ch. 959, 0 1, at 5229 (amending subsection (b) of section
102.51); Acts 1979, 66th Leg., ch. 33, $ 9, at 55 (adding subsection (b) to section
102.52); Acts 1975.64th Leg., ch. 20,s 1, at 41 (adding substance and basic language
of section 102.52(a)). In conclusion, a local distributor who purchases beer from a
general distributor may sell a brand of beer only in the territoty assigned to the
general distributor by the manufacturer of that brand.
SUMMARY
A local beer distributor may resell a particular brand of
beer that he purchases from a general distributor only in the
territory in which the general distributor is authorized by the
mamtfacturer to sell that brand. When a local distributor
purchases beer from a manufacturer, the local distributor may
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Honorable Erwin W. Barton - Page 4 (DM-SA)
only resell the beer in the territory specified in his written
agreement with the manufacturer.
DAN MORALES
Attorney General of Texas
WlLL PRYOR
First Assistant Attorney General
MARY KELLER
Executive Assistant Attorney General
RENEAHICKS
Special Assistant Attorney General
MADEJXINE B. JOHNSON
Chair, Opinion Committee
Prepared by Sarah Woelk
Assistant Attorney General
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