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With the stroke of a virtual pen, three words were deleted from statutory law and the case discount, as we know it, is dead.

Or is it? The new law is missing key language. At best, it is unclear.

Tennessee law requires a 20% minimum markup on wine.  Case discounts used to be exempt from the 20% minimum markup.  The law deletes the words “and case discounts” from the list of exceptions to the minimum markup. 

The new law now provides:

This chapter does not prohibit a retailer from offering a discount in such manner as the retailer deems appropriate as long as the discount being offered is not below the cost to the retailer. As used in this subsection (b), "cost to the retailer" has the same meaning as defined in § 57-3-1002.

Cost to the retailer in Section 1002 references the 10% minimum mark up for intoxicating liquors. 

That’s spirits; not wine.

The new language in P.C. 859 can be read at this link:

Did the legislature, in all its infinite wisdom, forget to refer to the 20% minimum mark up for wine in TCA § 57-3-406(b)?

Or does cost to the retailer mean the basic cost of wine, which is the invoice cost from the wholesaler.  If so, retailers can still discount cases of wine below the 20% minimum markup.  Retailers cannot discount below their cost.  This is the current law.

Confused?  We definitely are.  Cue the 1983 New Order single of the same name:

You just can't believe me

When I show you what you mean to me


Good news is that the new law does not take effect until January 1, 2023.  Maybe someone can resolve the drafting conundrum by then.

Will Cheek and Rob Pinson have joined Adams and Reese! They are excited to continue their Alcohol Law practice across Tennessee while taking advantage of Adams and Reese's firm team and resources.

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