The Texas Alcoholic Beverage Commission proposes a new §45.103 relating to promotional activities by retail establishments authorized to sell alcoholic beverages for on- premises consumption. This rule is proposed to replace the rule currently found at §45.103, repeal of which is contemporaneously proposed by the commission. This rule is proposed to curtail methods of promotion, sales and service that are reasonably calculated to cause excessive consumption of alcoholic beverages by consumers.

Lou Bright, General Counsel, has determined that for the first five years this rule is in effect, there will be no fiscal impact on units of state and local government as a result of enforcing the rule.

Mr. Bright has determined that the public will benefit from this rule in that the rule will serve to curtail those practices of retailers of alcoholic beverages that are reasonably calculated to result in excessive consumption of alcoholic beverages and the injuries to person and property that are the result of such consumption. The rule governs the activities of establishments authorized to sell alcoholic beverages for on-premises consumption, many of which are small businesses. The rule proposes to curtail various methods of marketing and promoting those businesses. The rule will, therefore, have some fiscal impact on the operation of small businesses. The amount of that impact is not amenable to calculation as it will vary widely from one establishment to another.

Comments should be addressed to Lou Bright, General Counsel, P.O. Box 13127, Austin, Texas 78711.

This rule is proposed under Alcoholic Beverage Code, §5.31, which provides the commission with the authority to prescribe and publish rules necessary to carry out the provisions of the Alcoholic Beverage Code.

Cross Reference: Alcoholic Beverage Code, §11.61(b)(2), (7), (14) and §61.71(a)(1), (6), (17), are affected by this rule.

§45.103.On-Premises Promotions.

(a)

This rule is adopted to prohibit those practices by on-premise retail establishments that are reasonably calculated to result in excessive consumption of alcoholic beverages by consumers. Such practices constitute a manner of operation contrary to the public welfare, health and safety of the people in violation of §11.61(b)(7) and §61.71(a)(17) of the Alcoholic Beverage Code.

(b)

Excessive consumption of alcoholic beverages shall be determined by the standard of public intoxication articulated in §49.02 of the Penal Code.

(c)

Retail licensees and permittees may not:

(1)

serve, sell, or offer to serve or sell, two or more open containers of alcoholic beverages at a price less than the number of containers actually sold or served;

(2)

increase the volume of alcohol contained in a drink without increasing proportionally the price thereof;

(3)

serve or offer to serve more than one free alcoholic beverage to any identifiable segment of the population during the course of one business day. Licensees and permittees may, however, without prior advertising, give one free alcoholic beverage to individual consumers in celebration of birthdays, anniversaries or similar events;

(4)

sell, serve, or offer to sell or serve an undetermined quantity of alcoholic beverages for a fixed price or "all you can drink" basis;

(5)

sell, serve, or offer to sell or serve, alcoholic beverages at a reduced price to those consumers paying a fixed "buy in" price;

(6)

sell, serve, or offer to sell or serve, alcoholic beverages at a price contingent on the amount of alcoholic beverages consumed by an individual;

(7)

reduce drink prices after 11:00 p.m.;

(8)

sell, serve or offer to sell or serve more than two drinks to a single consumer at one time;

(9)

impose an entry fee, cover or door charge for the purpose of recovering financial losses incurred by the licensee or permittee because of reduced or low drink prices;

(10)

conduct, sponsor or participate in, or allow any person on the licensed premises to conduct, sponsor or participate in, any game or contest to be determined by the quantity of alcoholic beverages consumed by an individual or group, or where alcoholic beverages or reduced price alcoholic beverages are awarded as prizes;

(11)

engage in any practice, whether listed in this rule or not, that is reasonably calculated to induce consumers to drink alcoholic beverages to excess, or that would impair the ability of the licensee or permittee to monitor or control the consumption of alcoholic beverages by consumers.

(d)

The provisions of subsection (c)(1) - (9) of this section do not apply where:

(1)

the permittee or licensee has entered into an agreement under the terms of which all or a portion of the licensed premises are utilized for a private party or a meeting of a particular organization; or

(2)

a caterer's or other temporary permit or license is used for a private party or a meeting of a particular organization.

(e)

Notwithstanding the provisions of subsection (c)(1) - (7) of this section, licensees and permittees may:

(1)

offer free or reduced-price food or entertainment at any time, provided the offer is not based on the purchase of an alcoholic beverage;

(2)

include alcoholic beverages as part of a meal or hotel/motel package;

(3)

sell, serve or deliver wine by the bottle to individual consumers;

(4)

sell, serve or deliver alcoholic beverages in pitchers, carafes, buckets or similar containers to two or more consumers at one time.

This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.

Filed with the Office of the Secretary of State, on July 26, 2000.

TRD-200005164

Doyne Bailey

Administrator

Texas Alcoholic Beverage Commission

Earliest possible date of adoption: September 10, 2000

For further information, please call: (512) 206-3204