Posted In: Business Transactions & Corporate Counseling
By Brian D. Merklin on September 17, 2019
Through a partnership with contract liquor agencies and JobsOhio, the Ohio Division of Liquor Control announced a new program, the Contract Liquor Agency Commission Bonus Program (“Bonus Program”). The Bonus Program will allow Ohio liquor agencies the opportunity to earn an extra one percent commission on their sale of state liquor. The program is voluntary, and state liquor agencies must opt in to participate. The following is a brief summary of the prerequisites, criteria and calculation of the bonus earned.
To qualify for the Bonus Program, an agency must opt-in to the program by the announced deadline of each program year, which runs from July 1 through June 30 of the following year. If an agency does not follow the prescribed opt-in procedures, it will not be eligible to receive any commission bonuses. To participate, the signatory to the agency contract must opt in for each individual agency.
Agencies can only earn the bonus if the statewide sales of state liquor grow by a certain specified percentage each year. The requirement for 2019 was 5%. This percentage is measured statewide and is not a requirement for each individual agency that participates. Lastly, to qualify for the bonus, an agency cannot be placed on suspension for any reason during the program year.
During the fiscal year, Contract Liquor Agencies will be graded based on several criteria, each being worth a certain number of points. The criteria include the following:
- individual agency sale increase (25 points);
- general store appearance (15 points);
- sales reporting/inventory maintenance/paperwork retention (15 points);
- inventory control (20 points); and
- agency compliance (25 points).
Points earned from these requirements will be used to calculate the amount of the bonus commission an agency has earned.
To earn all 25 points for an individual agency sales increase, only a $1 increase in sales from the previous fiscal year is required. For the general store appearance points, Division Auditors will make four compliance visits throughout the year which will include inspections, observations, and documentation of the internal and external appearance of the store. Additionally, auditors will inspect document compliance including safety and security, price tag accuracy, product organization, and file retention to determine how many of the sales reporting/inventory maintenance/paperwork retention points are earned. These auditors will also inspect agency backrooms and inventory rooms to observe and document inventory stock and management systems for the points based on inventory control. Lastly, the agency compliance points will be reduced for any violation of the law or any citations incurred by the agency. To receive all 25 points, an agency must have zero citations.
The five criteria described above form the basis for a scorecard where an agency can receive 0-100 points. The number of points earned out of the possible 100 will account for the portion of the bonus commission an agency will receive. For example, if an agency sells $750,000 in retail, this would amount to a $7,500 maximum bonus. Consequently, it is important to ensure that an agency is in compliance with all of the applicable standards so that the maximum amount of the bonus commission can be earned.
The team at Brouse McDowell is prepared to assist in navigating the complexities of the Bonus Program and Ohio’s Liquor Laws.
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