What's happening
This bill requires liquor and wine sold in New York to come from a registered "primary American source of supply," with stricter tracking and wholesaler authorization.
Why it matters
Increases oversight and traceability. By requiring every liquor and wine brand sold in New York to have a registered “primary American source of supply,” the bill makes it easier for authorities to trace the supply chain, potentially reducing counterfeit or illegally imported alcohol.
Limits parallel imports and gray market sales. The legislation restricts wholesalers to purchasing only from registered sources or their designees, curbing the ability to import the same branded products through unofficial channels, which could affect price competition and sourcing flexibility.
Empowers brand owners and manufacturers. The bill gives manufacturers more control over who can distribute and sell their products by allowing them to designate exclusive sources and authorized wholesalers, which may impact market access for smaller distributors.
Creates exceptions and regulatory flexibility. While establishing strict controls, the bill carves out exceptions (e.g., private collections, exclusive retailer brands, and cases where no primary source is designated), and gives regulators broad authority to implement rules, which could affect how stringently the law is applied in practice.
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Who cares
Headline styles
Require U.S. Wine, Liquor Sources
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 40
No co-sponsors yet.
History
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.432
- Print number 5437a
- Amend and recommit to investigations and government operations
- Referred to investigations and government operations
- Referred to investigations and government operations
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Require US Source for Alcohol
In Assembly Committee · Economic Development · Sponsor Carrie Woerner
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5437--A
2017-2018 Regular Sessions
IN SENATE
March 28, 2017
Introduced by Sen. MURPHY -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations -- recommitted to the Committee on Investigations and Government Operations in accordance with Senate Rule 6, sec. 8 -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the alcoholic beverage control law, in relation to establishing a primary American source of supply for liquor and wine sold in this state
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 35 of section 3 of the alcoholic beverage control law is amended, and two new subdivisions 23-a and 23-b are added to read as follows:
23-a. "Primary American source of supply" means (a) a manufacturer of liquor or wine if such liquor or wine can be secured directly from the manufacturer by a distributor in the United States; or (b) if the liquor or wine cannot be secured directly from the liquor or wine's manufacturer by a distributor in the United States, another manufacturer or bottler, or its legally authorized exclusive agent, from whom the liquor or wine can be secured by a wholesaler or distributor in the United States and is the source closest to the liquor or wine's manufacturer in the channel of commerce.
23-b. "Private collection" as applied to wine or privately held wines means bottled wine that (a) was purchased at retail or auction, (b) was owned by a non-licensed person for at least two years with proof of purchase, and (c) is at least five years old if it is white or rose wine, and at least ten years old if it is red wine, port or sparkling wine.
35. "Wholesaler" means any person who sells at wholesale any beverage for the sale of which a license is required under the provisions of this
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10771-02-8
S. 5437--A 2
chapter. An "authorized wholesaler" is a wholesaler authorized by a primary American source of supply to carry a specific brand of liquor or wine in this state.
§ 2. The alcoholic beverage control law is amended by adding a new section 116-a to read as follows:
§ 116-a. Primary American source of supply. 1. The manufacturer of a liquor or wine at the time the same became suitable for wholesale or retail sale shall designate the primary American source of supply thereof and such primary American source of supply shall file a registration application with the authority on forms provided by the authority. Each brand of such liquor or wine shall be individually listed on such registration. A wholesaler shall designate one primary American source of supply for each brand of liquor or wine the wholesaler sells in this state.
2. The authority shall register only one primary American source of supply for any single brand of liquor or wine. The manufacturer or bottler may register a new primary American source of supply and cancel the registration of the former primary American source of supply by filing a new authorization with the authority not less than forty days before the new authorization becomes effective.
3. A primary American source of supply shall file with the authority the names of authorized wholesalers for each brand of liquor or wine sold in this state. If the primary American source of supply is a wholesaler, it may list itself and other wholesalers as an authorized wholesaler of the brand. The filing of a wholesale price posting, in accordance with section one hundred one-b of this article, listing the names of the authorized wholesalers shall be deemed compliance with this requirement. The authorized wholesalers may be changed at any time at or prior to the time a wholesale price posting is to be filed pursuant to such section. If the primary American source of supply does not list any authorized wholesalers, any licensed wholesaler may purchase the liquor or wine from the primary American source of supply and sell the brand in this state.
4. Except as set forth in subdivisions seven and eight of this section or shipments made directly to a resident of New York for personal use pursuant to sections seventy-nine-c and seventy-nine-d of this chapter, no one shall ship or cause to be shipped into this state, nor shall any wholesaler or retailer in this state receive, any liquor or wine unless the primary American source of supply for such liquor or wine has filed an application for registration as the primary American source of supply, that application has been approved by the authority, and the brand is purchased from the primary American source of supply or an authorized wholesaler.
5. Except as set forth in subdivisions seven and eight of this section, a wholesaler in this state shall not purchase, receive or be in possession of any liquor or wine unless the wholesaler obtained the liquor or wine directly from a registered primary American source of supply, a designated representative of the primary American source of supply if the primary American source of supply is outside this state, or an authorized wholesaler.
6. Nothing in this section shall be deemed to prohibit subsequent intrastate sales, transfer, and invoicing of a brand of liquor or wine between authorized wholesalers of that brand.
7. The authority shall allow a wholesaler to bring liquor or wine into this state if the wholesaler certifies to the satisfaction of the authority that the brand of liquor or wine comes from a manufacturer or
S. 5437--A 3
bottler that cannot, or has not and will not appoint a primary American source of supply.
8. This section shall not apply to (a) a brand of liquor or wine owned exclusively by one retailer and sold at retail within this state exclusively by such retailer; or (b) a product purchased by a wholesaler or retailer in accordance with sections eighty-five and ninety-nine-g of this chapter consistent with the rules, regulations, orders and advisories established by the authority.
9. The authority is authorized to perform such acts, prescribe forms, and make rules, regulations, orders and advisories as it may deem necessary or proper to fully effectuate the provisions of this section including, but not limited to, establishing a format for recording the primary American source of supply and its designees.
§ 3. This act shall take effect on the ninetieth day after it shall have become a law; provided, however, that effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized and directed to be made and completed on or before such effective date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the alcoholic beverage control law, in relation to establishing a primary American source of supply for liquor and wine sold in this state
Purpose
This bill would require that all wine and liquor sold in the state be received from a primary American source of supply.
Summary of provisions
Section one amends subdivision 35 of section 3 of the alcoholic beverage control law to add two new subdivisions, 23-a and 23-b. Subdivision 23-a defines "primary American source of supply" to mean (a) a manufac- turer or liquor or wine if such liquor or wine can be secured directly from the manufacturer by a distributor in the United States, or (b) if the liquor or wine cannot be secured directly from the liquor or wine's manufacturer by a distributor in the United States, another manufacturer or bottler, or its legally authorized exclusive agent, from whom the liquor or wine can be secured by a wholesaler or distributor in the United States and is the source closest to the liquor or wine's manufac- turer in the channel of commerce. Subdivision 23-b defines "private collection" as applied to wine or privately held wines means bottled wine that (a) was purchased at retail or auction, (b) was owned by a non-licensed person for at least two years with proof of purchase, and (c) is at least five years old if it is white or rose wine, and at least ten years old if it is red wine, port or sparkling wine.
Read the full memo (1,401 words)
Section two amends the alcoholic beverage control law by adding a new section 116-a. Subdivision one requires a manufacturer of a liquor or wine at the time the same become suitable for wholesale or retail sale shall designate the primary American source of supply and such primary American source of supply shall file a registration application with the authority on forms provided by the authority. Each brand of such liquor or wine shall be individually listed on such registration. A wholesaler shall designate one primary American source of supply for each brand of liquor or wine the wholesaler sells in this state.
Subdivision two establishes that the authority shall only register only one primary American source of supply for any single brand of liquor or wine. The manufacturer or bottler may register a new primary American source of supply and cancel the registration of the former primary Amer- ican source of supply by filing a new authorization with the authority not less than forty days before the new authorization becomes effective.
Subdivision three establishes that a primary American source of supply shall file with the authority the names of authorized wholesales for each brand of liquor or wine sold in this state. If the primary American source of supply is a wholesaler, it may list itself and other whole- salers as an authorized wholesaler of the brand. The filing of a whole- sale price posting, in accordance with section one hundred one-b of this article, listing the names of the authorized wholesalers shall be deemed compliant with this requirement. The authorized wholesalers may be changed at any time at or prior to the time a wholesale price posting is to be filed pursuant to such section. If the primary American source of supply does not list any authorized wholesalers, any licensed wholesaler may purchase the liquor or wine from the primary American source of supply and sell the brand in this state.
Subdivision four states that except as set forth in subdivisions seven and eight of this section, no one shall ship or cause to be shipped into the state, or shall any wholesaler or retailer in this state receive, any liquor or wine unless the primary American source of supply for such liquor or wine has filed an application for registration as the primary American source of supply, the application has been approved by the authority, and the brand is purchased from the primary American source of supply or an authorized wholesaler.
Subdivision five states a wholesaler in the state shall not purchase, receive or be in possession of liquor or wine unless the wholesaler obtained it directly from a registered primary American source of supply, a designated representative if the primary American source of supply is outside this state, or an authorized wholesaler.
Subdivision six states that nothing in this section shall be deemed to prohibit subsequent intrastate sales transfer, and invoicing of a brand of liquor or wine between authorized wholesalers of that brand.
Subdivision seven states that a wholesaler may bring liquor or wine into the state if the wholesaler certifies to the satisfaction of the author- ity that the brand of liquor or wine comes from a manufacturer or bott- ler that cannot, or has not and will not appoint a primary American source of supply.
Subdivision eight states the section will not apply to: (a) a brand of liquor or wine owned exclusively by one retailer and sold at retail within this state exclusively by such retailer; or (b) a product purchased by a wholesaler or retailer in accordance with section eight- y-five and ninety-nine-g of this chapter consistent with the rules, regulations, order and advisories established by the authority.
Subdivision nine establishes the authority to perform such acts, prescribe forms and make rules, regulations, orders and advisories as it may deem necessary or proper to fully effectuate the provisions of this section including, but not limited to, establishing a format for record- ing the primary American source of supply and its designees.
Section three establishes the effective date.
Justification
The proposed legislation would amend several provisions of the Alcoholic Beverage Control ("ABC") law to create a "primary American source of supply" of liquor and wine for distribution and sale of alcoholic bever- ages in New York State. The legislation would direct the manufacturer or owner of a liquor or wine to designate the primary American source of supply and to file a registration application with the authority. The enactment of a primary source law would provide greater accountability for all wine and liquor distributed and sold in New York State.
Under a primary American source statute, wholesalers may only buy wine and liquor directly from the brand owner or manufacturer. The primary source is the manufacturer of liquor or wine, or the source closest to the manufacturer in the channel of commerce from whom the product can be secured by New York wholesalers. Under New York State's current statuto- ry framework, there is no restriction on wholesalers seeking sources of wine and liquor other than from the direct primary source. These non- primary sources encompass importers from other nations. This proposed primary source legislation would make it unlawful for any wholesale licensee to purchase wine or liquor from other than the primary source of supply in the United States. The legislation requires brand owners, distributors, owners, and retainers to keep and complete accurate records of the sales chain, the size, and brand of products. These provisions would also increase tax collections and ensure the integrity of the products.
According to the New York State Law Revision Commission-the oldest continuous agency in the common law world committed to law reform through legislation-primary source laws give a state precise excise tax assessment and collection. A study conducted by American Economics Group estimated approximately $39.3 million additional tax collections annual- ly. The New York State Law Revision Commission also asserts that a primary source law, which would identify all wholesalers able to distribute a manufacturer's brands, would decrease the potential for lost revenues from inaccurate reporting. Moreover, according to the Commission, "By far the most compelling reason to impose a primary source law or system involves the protection of the public's health and safety." Both brand owners and industry professionals have voiced concern that without a primary source law, a brand owner would not be able to assure the purity and integrity of the product.
Legislative history
2017: S5437
Fiscal implications
Increase in tax revenue for the State.
Effective date
This act shall take effect on the ninetieth day after it shall have become a law; provided, however, that effective immediately, the addi- tion, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized and directed to be made and completed on or before such effective date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.