Sales contract to On Premise Accounts

[jasonaa]

Hi all, new here and looking forward to active participation. So, my partners and I are very close to launching, and I have a question regarding selling to accounts. While we plan on our large margins coming from our tasting room (obviously), we plan on the majority of our capacity going to local On-Premise accounts.

Is anyone willing to share a sample sales contract to a local pub/restaurant/bar? I have no interest in your beer pricing, as I am only interested in seeing the language used in the sales agreement. For instance, are there deposits required for cooperage and tap handles, are there billable costs involved in marketing expenses (coasters etc.), are there agreements on signage, etc.? Even if not in the contract, are these things brought up and done off the record?

I can provide an e-mail address if you are willing to share. I appreciate any and all feedback. Thanks in advance!

Cheers!
Jason

[yap]

not sure how it works in california but where i'm at there are no such things. you go into a bar and if they want to buy a keg, you bring them an invoice and they must pay on delivery. charge the keg deposit as a separate line item. when you pick up the empty you'll have to pay them the deposit back.

as far as charging deposit for taphandles, coasters etc. all i can say is good luck with that. again, may be different in california but if i charged deposit for my taphandles, i would lose a lot of sales....

this is all assuming you are self distributing an of course every state is different so take it with a grain of salt...

[einhorn]

In the state of CA, there are no contracts with on-premise accounts allowed by ABC law. There are quite a few things no allowed, read up on which license you plan on applying for.

[jasonaa]

Yap, that is just the kind of info I'm looking for. By contract I am referring to the invoice. So it wouldn't be new for an account to see a keg deposit as a separate line item for each keg being kept On-Premise, correct?

For instance, if you're looking at 1 on tap, 1 full back up keg, and 1 keg empty to come back, the account might have 2 or 3 invoices with a total of 3 deposits, correct?

Understood about the promo items, I didn't figure they would be a chargeable item, but I was wondering if those are things are ever offered at no charge with some sort of commitment to pushing your product at the bar (for instance, letting the brewery come in to a staff meeting to educate the servers, or thrown in if allowed multiple taps etc.).

[admin]

California ABC law does not allow for any inducement, agreement or barter (monetary or otherwise) in exchange for product placement or sales. There are a few exceptions but they are very specific in nature.

[jasonaa]

California ABC law does not allow for any inducement, agreement or barter (monetary or otherwise) in exchange for product placement or sales. There are a few exceptions but they are very specific in nature.

Roger that. Thanks much for the info.

[Moonlight]

Not only does California law forbid all sorts of things such as inducements that are absolutely normal in other commerce, but the fine is generally $10,000. Being cute and little and ignorant newbies is no defence to the alcohol cops. They might actually enjoy using you as an example to the wanton disregard for the laws that they are paid to vigilantly enforce.
I do so wish all start up breweries pay attention to the laws in their states, as for the most part, the laws are (believe it or not) there to protect the interests of the smaller brewers compared to the megabrewers who have histories of bankrolling promotions with the sole intent of crushing competitors out of business. Respect the laws...and the fines!

Oh yes, and if the alcohol laws don't seem to make any sense whatsoever, and if the local ABC office doesn't even know the laws and informs you incorrectly, it is still no defense.
Before starting a brewery, get in touch with your state or local Guilds or Brewery Associations to learn what is legal ahead of the curve.

[jasonaa]

Thanks, Moonlight, I think I gave the wrong impression when using the term "Contract," above. My current industry often refers to an invoice or purchase order as a contract.

I understand the inducement issue, but at that point, couldn't leaving a couple packs of coasters behind to a new account be considered an inducement by the simple fact that you are not charging for them?

Is offering to train staff on your product considered and inducement?

All questions I plan on reconfirming with the ABC and CCBA, but we are going to be in our CUP process for a minute before applying for our license.

Thanks again for all the feedback!

[Brewtopian]

Deposits on kegs are the norm but not on handles. Deposits are typically about $30 but I have seen them as high as $45.

Promotional items like signs and coasters are ok to be given away in some states but not in others. My state (Idaho) doesn't permit anything of value being given to an account so if we get coasters there has to be some charge of some kind on the invoice. Its usually a few cents.

Signs are typically handled on a loan basis and it might be advisable to have a contract for that that states they are the property of ABC Brewery and not of the account. This way your signs don't end up on eBay and if there's ever any question from the powers that be you have yourself covered.

[jasonaa]

Thanks Brewtopian, alot of sense in that.

Cheers!