STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

November 17, 1972

Mr. Lowell Schmidt
Commissioner of Revenue
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 72-60

Liquor wholesalers prohibited from giving freight rate concession to retailers.

Dear Mr. Schmidt:

You have requested my official opinion on the question of whether or not South Dakota wholesale liquor dealers may make free deliveries of alcoholic beverages to retailers in municipalities in which the wholesale houses are located while making a charge therefor to all retailers not so located in those municipalities.

SDCL 35-4-52, which prohibits certain sales practices by wholesalers, reads as follows:

No distiller or wholesale licensee shall attempt to promote his sales of liquor by tie-in sales arrangements or by any device such as gifts or other concessions of financial value to a customer but shall limit his business practice to promoting sales on the basis of price competition, salesmanship, reliability as a supplier, and other ordinary competitive business practices.

A liquor wholesaler who makes free delivery of purchases to liquor retailers in the town where he is located, Or in some other town where a competitive liquor wholesaler is located, and who charges retailers not so located in those towns, is giving a "concession of financial value" to the local retailers. They would otherwise have to pay for this service and in receiving free delivery it constitutes a violation of SDCL 35-4-25.

As has been stated in Armour Packing Co. v. United States, 153 Fed. 1, 82 CCA 135:

A rebate or concession from a part of a single rate whereby property is transported thereunder at less rate than the established rate is a "concession" from the entire rate, and renders all transportation thereunder illegal.

Respectfully submitted,

Gordon Mydland
Attorney General