To: Alcoholic Beverages Licensed Manufacturers and Wholesalers, and County Dispensaries

Subject: Price Postings and Volume Discounts

In a bulletin dated January 15, 2010, we advised you that the decision by the U.S. Court of Appeals for the Fourth Circuit in TFWS, Inc. v. Comptroller of Maryland was final. As a result, the following provisions of Article 2B, Alcoholic Beverages, Annotated Code of Maryland and its accompanying regulations are not enforceable:

1. The post-and-hold pricing provisions of Article 2B, §12-103(c) and the Code of Maryland Regulations (COMAR) 03.02.01.05(A) through (D), (E)(5),(7), (8); and
2. The prohibition on volume discounts of Article 2B, §12-102(a) and specifically COMAR 03.02.01.05(B)(3)(c).

The price discrimination provision of Article 2B, §12-102(a) remains enforceable, which means that while volume discounts are permissible, those discounts must be offered on a uniform, non-discriminatory basis. Complaints about price discrimination in volume discounts will be investigated, and a request made for substantiation of prices. This issue will be handled on a case-by-case basis.

As a general rule, the non-discrimination provision should be clear in its application. However, at a licensee’s discretion, a request may be made to the Field Enforcement Division for an evaluation of a proposal for offering volume discounts to determine whether it complies with the price discrimination provision of Article 2B, §12-102(a).

Jeffrey A. Kelly

Director