Licensed alcohol retailers in New York who get behind on payments to wholesalers and manufacturers may find themselves on a delinquency list. This list maintained by the NYS Liquor Authority. Its purpose is to ensure that licensees don’t run up a big bill with one distributor and then switch to another to do the same thing.
This system is essentially a way for the state to protect wholesalers, wineries, breweries, and distilleries. All distributors licensed by the state are required to place delinquent retailers on “cash on delivery” (C.O.D.) status. Distributors must report those delinquent retailers to the authority.
When they do, your license serial number is added to the state’s database, All wholesalers and manufacturers are tied into. The system alerts the distributors when a licensee on C.O.D. places an order.
WHAT C.O.D. means for you
What does this mean for your business if you are on C.O.D.? In the simplest terms, if you are delinquent with one distributor and make the state list, no other manufacturer or wholesaler can extend you credit terms until you come off the list.
Wholesalers and manufacturers are not required to extend you credit. But if they do, the amount of time you have to pay for credit purchases depends on whether you are buying from a beer wholesaler or a liquor/wine wholesaler. Payments by retailers to distributors must be made in cash, by check, by money order, or by electronic funds transfer. You cannot pay by credit card.
SELLING? Stay off C.O.D.
Licensed retailers who are selling the assets of their business need to avoid being on the C.O.D. list. This especially true if they intend to transfer their existing inventory to a buyer. Sellers who are delinquent on their payments to wholesalers and manufacturers will have their applications to liquidate their inventory disapproved by the authority. If this happens, there is an easy cure: pay your wholesalers off, come off the C.O.D. list. You’d then have to submit a new application for a liquidator’s permit and a new check for the $36 fee.
Licensees who want to check whether they are on the C.O.D. list can contact the authority at (518) 474-3114. We recommend, however, that you take advantage of the authority’s online lookup tool. You will need to create an account that is specific to your license information. Once you have created the account, make sure you save your license number and password you created.
Among other things, you can see which wholesaler or manufacturer reported you as delinquent and how much they claim you owe them.
Got questions about this topic or anything else to do with obtaining, renewing, or operating under a New York State liquor license? Contact us anytime.
– John Springer, My Liquor License Guy