03.02.01.16

.16 Wholesaler Credit Sales of Beer to Worcester County Retailers.

A. Beer Credit Sales.

(1) A licensed wholesaler may sell beer on credit to retailers in Worcester County if the:

(a) Licensed retailer has held an alcoholic beverage retail license in Worcester County for a minimum of 2 consecutive years before the sale and delivery; and

(b) Licensed wholesaler complies with the provisions of this regulation.

(2) A licensed wholesaler who sells and delivers beer on credit to a retailer in Worcester County shall be paid in full, including any interest charges, for the outstanding invoice not later than the 10th calendar day after the date of delivery.

(3) A licensed wholesaler who has not received payment in accordance with §A(2) of this regulation shall:

(a) Immediately discontinue beer sales, credit or otherwise, to that licensed retailer; and

(b) Notify the Comptroller by facsimile of the delinquency as soon as possible but not later than 12 noon on the next business day.

B. Notification.

(1) Notification of a delinquency under §A(3)(b) of this regulation may be in any form but shall contain at least the following information:

(a) Name of the licensed wholesaler filing the report;

(b) Name and trade name of the licensed retailer;

(c) Full address of the licensed retailer;

(d) Date and number of the original invoice; and

(e) Amount of delinquency.

(2) The Comptroller shall provide all other wholesalers of beer notice via facsimile of the delinquency report received. The notice shall provide an effective date when all licensed wholesalers are prohibited from making any sale or delivery of beer to that account.

(3) A licensed wholesaler who has previously reported a delinquency shall notify the Comptroller upon receipt of full payment. The notification time frames are the same as with the original notification. Upon notification from the Comptroller that an account has been cleared, all licensed wholesalers, including the licensed wholesaler who filed the original delinquent report, may resume credit sales and deliveries to that account. Credit sales may be made at the discretion of the licensed wholesaler.

(4) If a licensed wholesaler becomes aware that a licensed retailer's check has been returned by the bank unpaid, whether or not the check was issued as a payment at the time of delivery or on the licensed retailer's 10-day credit account, and the 10-day period specified in §A(2) of this regulation has expired, the licensed wholesaler shall consider this a nonpayment and immediately report this information to the Comptroller. A licensed wholesaler may elect to redeposit a returned check if it is returned within 10 days of the original invoice date. If a check is returned unpaid a second time, the licensed wholesaler shall immediately file a report with the Comptroller. Notification shall include a statement that the report was based on a returned check.

C. Beer Credit Prohibition. In accordance with Article 2B, §12-112(c)(7), Annotated Code of Maryland, a licensed retailer who has been reported on three separate occasions within a single calendar year is prohibited from obtaining beer on credit for a period of 2 years from the date of the third report. For the purpose of this regulation, a specific beer purchase transaction between a licensed wholesaler and a licensed retailer constitutes an occasion. The Comptroller shall notify all licensed wholesalers of any retailers who meet this criterion.