Handbook for Manufacturers

Division of Alcoholic Beverage Control
Kansas Department of Revenue 109 SW 9th Street
Mills Building, 5th Floor Topeka, Kansas 66612

Phone: 785-296-7015 / Fax: 785-296-7185
Website: www.ksrevenue.gov/abcindex.html
Email: Kdor_abc.email@ks.gov

Please report errors, omissions or suggestions for improvement to this handbook to the Division of Alcoholic Beverage Control by telephone at 785-296-7015, by fax at 785-296-7185 or by email to Kdor_abc.email@ks.gov.

Changes made to this handbook since the previous revision(s) have been highlighted with a light blue background.

Table of Contents

Definitions

Alcoholic candy

Means any candy or other confectionary product with an alcohol content greater than 0.5% alcohol by volume (for purposes of manufacturing), or 1% alcohol by volume (for purposes of sale at retail). [Subsection (b) of K.S.A. 41-102]

Alcoholic liquor

Means alcohol, alcoholic candy, spirits, wine, beer and every liquid or solid, patented or not, containing alcohol, spirits, wine or beer and capable of being consumed as a beverage by a human being, but shall not include any cereal malt beverage (“CMB”). [Subsection (c) of K.S.A. 41-102]

Beer

Means a beverage, containing more than 3.2% alcohol by weight, obtained by alcoholic fermentation of an infusion or concoction of barley, or other grain, malt and hops in water and includes beer, ale, stout, lager beer, porter and similar beverages having such alcoholic content. [Subsection (d) of K.S.A. 41-102]

Beer distributor

Means a person licensed to sell beer or CMB to any person authorized by law to sell beer or CMB at retail. [Subsection (c) of K.A.R. 14-14-1]

Beneficial interest

Means any ownership interest by a person or that person’s spouse in a business, corporation, partnership, trust, association, or other form of business organization that exceeds 5% of the outstanding shares of that corporation or a similar holding in any other form of business organization. [Subsection (d) of K.A.R. 14-14-1]

Cereal malt beverage (CMB)

Means any fermented but undistilled liquor brewed or made from malt or from a mixture of malt or malt substitute or any flavored malt beverage (FMB), as defined in Section 1 of House Bill 2955 effective July 1, 2006, but does not include any such liquor which is more than 3.2% alcohol by weight. [Subsection (a) of K.S.A. 41-2701] Since 3.2% alcohol by weight is equivalent to 4% alcohol by volume, CMB does not include any FMB which contains more than 4% alcohol by volume.

Distributor

Means a person importing or causing to be imported into the state, or purchasing or causing to be purchased within the state, alcoholic liquor for sale or resale to retailers licensed under the Liquor Control Act or the Cereal Malt Beverage Act. [Subsection (i) of K.S.A. 41-102].

Domestic beer

Means beer having no more than 15% alcohol by weight that is manufactured in Kansas. [Subsection (j) of K.S.A. 41-102]

Domestic fortified wine

Means wine which contains more than 16%, but not more than 20% alcohol by volume and which is manufactured in this state. [Subsection (k) of K.S.A. 41-102, as amended by Section 1 of 2022 Senate Bill 2]

Domestic table wine

Means wine which contains not more than 16% alcohol by volume and which is manufactured without rectification or fortification in this state. [Subsection (l) of K.S.A. 41-102, as amended by Section 1 of 2022 Senate Bill 2]

Note: "Rectification" is not defined in the Liquor Control Act but is defined in Webster's Dictionary as adjusting the proof of alcoholic beverages by adding water or other liquids.

Flavored malt beverage

Means a malt beverage which meets the formula definitions as set forth in Department of the Treasury, Alcohol and Tobacco Tax and Trade Bureau regulations published Jan. 3, 2005, at 27 CFR Parts 7 and 25. [Subsection (b) of K.S.A. 41-2729]

Paragraph (a) of section 7.11 of 27 CFR Part 7 deals with the use of flavorings in malt beverages. Paragraph (b) of section 25.15 of 27 CFR Part 25 deals with the use of flavorings in beer. They are essentially identical. No more than 49 percent of the overall alcohol content of the malt beverage or beer may be derived from the addition of flavors and other nonbeverage ingredients containing alcohol. In the case of malt beverage or beer with an alcohol content of more than 6% by volume, no more than 1.5 percent of the volume of the malt beverage or beer may consist of alcohol derived from added flavors and other nonbeverage ingredients containing alcohol.

Hard Cider

Means any alcoholic beverage that:

  1. Contains less than 8.5% alcohol by volume;
  2. has a carbonation level that does not exceed 6.4 grams per liter; and
  3. is obtained by the normal alcoholic fermentation of the juice of sound, ripe apples or pears, including such beverages containing sugar added for the purpose of correcting natural deficiencies.

[Subsection (p) of K.S.A. 41-102]

Industry member

Means any distributor, manufacturer or supplier, or any agent, salesperson or representative thereof. [Subsection (f) of K.A.R. 14-10-5]

Manufacturer

Means a brewer, fermenter, distiller, rectifier, wine maker, blender, processor, bottler or person who fills or refills an original package and others engaged in brewing, fermenting, distilling, rectifying or bottling alcoholic liquor, beer or cereal malt beverage. "Manufacturer" does not include a microbrewery, microdistillery or a farm winery. [Subsection (r) of K.S.A. 41-102]

Person

Means any natural person, corporation, partnership, trust or association. [Subsection (x) of K.S.A. 41-102]

Powdered alcohol

Means alcohol that is prepared in a powdered or crystal form for either direct use or for reconstitution in a non-alcoholic liquid. [Subsection (y) of K.S.A. 41-102]

Retailer

Means a person who sells or offers for sale at retail any alcoholic liquor or CMB, except a microbrewery, microdistillery or farm winery. [Subsection (aa) of K.S.A. 41-102]

Sample

Means a serving of alcoholic liquor which contains not more than: (1) One-half ounce of distilled spirits; (2) one ounce of wine; or (3) two ounces of beer or cereal malt beverage. A sample of a mixed alcoholic beverage shall contain not more than one-half ounce of distilled spirits. [Subsection (dd) of K.S.A. 41-102]

Spirits

Means any beverage which contains alcohol obtained by distillation, mixed with water or other substance in solution, and includes brandy, rum, whiskey, gin or other spirituous liquors, and such liquors when rectified, blended or otherwise mixed with alcohol or other substances. [Subsection (ii) of K.S.A. 41-102]

Supplier

Means a manufacturer of alcoholic liquor or cereal malt beverage or an agent of such manufacturer, other than a salesperson. [Subsection (jj) of K.S.A. 41-102]

Wine

Means any alcoholic beverage obtained by the normal alcoholic fermentation of the juice of sound, ripe grapes, fruits, berries or other agricultural products, including such beverages containing added alcohol or spirits or containing sugar added for the purpose of correcting natural deficiencies. The term ‘‘wine’’ shall include hard cider and any other product that is commonly known as a subset of wine. [Subsection (ll) of K.S.A. 41-102]

Application for Licensure - Required Forms, Fees and Licensing Bond

All applications must be submitted to ABC online at https://www.ksabconline.gov.

Biennial license fees are listed in K.S.A. 41-2622 as follows:

  • For the manufacture of spirits: $5,000. [Subsection (b) of K.S.A. 41-310]
  • For the manufacture of wine: $1,000. [Subsection (d) of K.S.A. 41-310]
  • The fee for the manufacture of first beer during the initial term of the license: $2,000. [Subsection (c) of K.S.A. 41-310]

Fees for the manufacture of beer after the first term are graduated based on daily capacity:

  • 1 - 100 barrels: $400
  • 100 – 150 barrels: $800
  • 150 – 200 barrels: $1,400
  • 200 – 300 barrels: $2,000
  • 300 – 400 barrels: $2,600
  • 400 – 500 barrels: $2,800
  • 500 or more barrels: $3,200

[Subsection (c) of K.S.A. 41-310]

The license fee is refundable if the applicant is denied a license.

The applicant may pay either the full amount of the license fee or may pay ½ of the license fee at the time of application. The remaining ½ of the license fee, plus 10% of the remaining balance, is due one year from the date on which the license was issued. Failure to pay the remaining license fee and 10% fee timely will result in the license being canceled. [Subsections (b) and (c) of K.S.A. 41-317]

There is an additional application fee of $30 for new applicants and $10 for renewals. [Subsection (a) of K.S.A. 41-317] There will also be an additional $20 modernization fee assessed to each application type (initial or renewal). [K.S.A. 41-213] The application and modernization fees are not refundable.

At time of application, applicants must submit and maintain a licensing bond. See Licensing Bond section for details.

The license term commences on the date specified on the license. [Subsection (n) of K.S.A. 41-310] At the end of the two-year license term, the license is renewable for another two-year term unless sooner suspended or revoked, as long as the licensee and premises continue to meet the requirements of all relevant laws and regulations. [K.S.A. 41-327]

In addition to the application, new applicants shall also submit the following to the director of ABC:

  • A diagram of the proposed licensed premises for approval. Licensees must notify ABC prior to making any changes to their licensed premises. [Subsection (c) of K.A.R. 14-14-2]
  • If the applicant is a corporation, a certificate of authority issued by the Kansas Secretary of State to do business in Kansas. [Subsection (a) of K.S.A. 41-313]
  • If the applicant is a corporation, provide a copy of a duly executed power of attorney appointing a person who is a citizen of the United States and a resident of Kansas as its agent and authorizing that agent to accept service of process from the Director of ABC and Kansas courts and to exercise full authority of the corporation and full authority, control and responsibility for the conduct of all business and transactions of the corporation within the state relative to alcoholic liquor and the microbrewery business. The agent must be approved by the director of ABC as having satisfactory character. [Subsection (a) of K.S.A. 41-313]
  • If the applicant is a foreign corporation (not incorporated in Kansas), provide a copy of a duly authorized and executed power of attorney authorizing the Kansas secretary of state to accept service of process from the director of ABC and Kansas courts and accept service of any notice or order provided for in the Liquor Control Act. Such service shall be binding upon the corporation. [Subsection (a) of K.S.A. 41-313]

Once all of the required documents and forms have been received, required license fees have been paid, and required bonds have been posted, the director has 20 days to either issue the license or issue an order denying the license. If no license is issued or no denial order is issued within that time, then the license is deemed to be denied. The applicant may agree in writing to give the director an additional 30 days to either issue or deny the license. [Subsection (a) of K.S.A. 41-319]

An order by the director denying a license shall state the reason(s) therefore. The order denying a license is appealable to the secretary of revenue by filing a form available from the office of the secretary. The form must be either mailed to the secretary by certified mail or personally served upon the office of the secretary within 15 days from the date of service of the director’s order upon the licensee. The review of the director’s order will be conducted in accordance with the provisions of the Kansas Administrative Procedure Act (K.S.A. 77-501 et seq.). [K.S.A. 41-321]

The decision of the secretary or secretary's designee on an applicant's appeal of a denial of licensure may be appealed to District Court pursuant to the Kansas Judicial Review Act, K.S.A. 77-601 et seq. [K.S.A. 41-323]

A manufacturer’s license is a personal privilege and is not assignable. [K.S.A. 41-326]

Qualifications for Licensure

Subsections (a) and (c) of K.S.A. 41-311 list the qualifications for an initial license. The same requirements must be met for renewal of an existing license except as specifically indicated. [Subsection (a)(9) of K.S.A. 41-311]

Partnerships

Each partner in a partnership must meet the licensing qualifications for person ownership listed below. [Subsection (c)(2) of K.S.A. 41-311]

Corporations

Each officer and Director of the corporation must meet all of the licensing qualifications for person ownership below except for citizenship requirements. Each stockholder owning 25 percent or more of the corporation's stock must meet all of the licensing qualifications for person ownership listed below except for citizenship requirements. [Subsection (c)(1) of K.SA. 41-311]

Every corporation seeking a license shall appoint a citizen of the United States and resident of Kansas as process agent to receive service of process and exercise authority of the corporation. The process agent must be satisfactory to and approved by the director. [Subsection (a) of K.S.A. 41-313]

Limited Liability Companies (LLCs)

LLC’s must meet the same qualifications for licensure as a corporation as set forth in K.S.A. 41-311 and K.S.A. 41-311b. [Subsection (a) of K.S.A. 311c]

The LLC must submit a copy of its Articles of Organization and its Operating Agreement to the director in a form and manner as prescribed by the director. [Subsection (b) of K.S.A. 41-311c]

Every LLC seeking a license shall appoint a citizen of the United States and resident of Kansas as process agent to receive service of process and exercise authority of the LLC. The process agent must be satisfactory to and approved by the director. [Subsection (a) of K.S.A. 41-313]

Trusts

For trusts to be licensed, each grantor, beneficiary and trustee must meet the licensing qualifications for person ownership listed below. However, a beneficiary does not have to be at least 21 years of age. [Subsection (c)(3) of K.S.A. 41-311]

Person

U.S. Citizenship.

The person must be a U.S. citizen. [Subsection (a)(1) of K.S.A. 41-311]

For either an initial or renewal license, this requirement does not apply to the person's spouse. [Subsection (a)(12) of K.S.A. 41-311]

Felony conviction.

The person cannot have been convicted of a felony in Kansas or any other state or the United States. [Subsection (a)(2) of K.S.A. 41-311]

For an initial license, this requirement also applies to the person's spouse regardless of when the conviction occurred. [Subsection (a)(12) of K.S.A. 41-311]

For a renewal license, this requirement also applies to the person's spouse, but only if the conviction occurred during the time that the person's spouse was licensed under the Liquor Control Act. [Subsection (a)(13) of K.S.A. 41-311]

Previous liquor license revocation.

The person cannot have had a license revoked for cause under the Kansas Liquor Control Act or the Kansas Beer and Cereal Malt Beverage Keg Registration Act or the cereal malt beverage laws of Kansas or any other state. However, a revocation will be disregarded if it occurred more than 10 years ago and was the result of a conviction of a misdemeanor. [Subsection (a)(3) of K.S.A. 41-311]

For an initial license, this requirement applies to the person's spouse. For a renewal license, this requirement does not apply to the person's spouse. [Subsection (a)(12) of K.S.A. 41-311]

Previous finding of hidden beneficial interest

The person cannot, after a hearing before the Director, be found to have held an undisclosed beneficial interest in any liquor license which was obtained by means of fraud or any false statement made on the application for such license. [Subsection (15) of K.S.A. 41-311]

Conviction for keeping a house of prostitution.

The person cannot have been convicted of being a keeper of a house of prostitution or is keeping a house of prostitution. Cannot have forfeited bond to appear in court to answer charges of being a keeper of a house of prostitution. [Subsection (a)(4) of K.S.A. 41-311]

For an initial license, this requirement also applies to the person's spouse regardless of when the conviction occurred. [Subsection (a)(12) of K.S.A. 41-311]

For a renewal license, this requirement also applies to the person's spouse, but only if the conviction occurred during the time that the person's spouse was licensed under the Liquor Control Act. [Subsection (a)(13) of K.S.A. 41-311]

Conviction for owning a gambling house, pandering or crime opposed to decency or morality.

The person cannot have been convicted of being a proprietor of a gambling house, pandering or any other crime opposed to decency and morality and cannot have forfeited bond to appear in court to answer charges for any of these crimes. This includes both felonies and misdemeanors. [Subsection (a)(5) of K.S.A. 41-311]

"Pandering" is not currently used in the Kansas criminal law. Black's Law Dictionary defines a "panderer" as one who solicits for prostitution. The definition of "pander" includes being a "pimp" or procurer of persons to be prostitutes. Most of these acts are currently prohibited by K.S.A. 21-6419 (selling sexual relations) and K.S.A. 21-6420 (promoting the sale of sexual relations).

Crimes involving morality are defined in subsection (o) of K.A.R. 14-14-1 as including:

  • prostitution
  • procuring any person
  • solicitation of a child under 18 years of age for any immoral act involving sex
  • possession or sale of narcotics, marijuana, amphetamines or barbiturates
  • rape
  • incest
  • gambling
  • adultery
  • bigamy

For an initial license, this requirement also applies to the person's spouse regardless of when the conviction occurred. [Subsection (a)(12) of K.S.A. 41-311]

For a renewal license, this requirement also applies to the person's spouse, but only if the conviction occurred during the time that the person's spouse was licensed under the Liquor Control Act. [Subsection (a)(13) of K.S.A. 41-311]

Age requirement.

The person must be at least 21 years of age. [Subsection (a)(6) of K.S.A. 41-311]

For either an initial or renewal license, this requirement does not apply to the person's spouse. [Subsection (a)(12) of K.S.A. 41-311]

Employee of ABC.

The person cannot be an employee of the Division of Alcoholic Beverage Control. [Subsection (a)(7) of K.S.A. 41-311]

For an initial license, this requirement applies to the person's spouse. For a renewal license, this requirement does not apply to the person's spouse. [Subsection (a)(12) of K.S.A. 41-311]

Law enforcement officer.

The person cannot be a law enforcement official. [Subsection (a)(7) of K.S.A. 41-311] "Official" is not defined in the statute but is interpreted as being any law enforcement officer or head of a law enforcement agency. Since this subsection does not mention jurisdiction, it is assumed that this restriction applies regardless of whether the law enforcement official is located in the same county, city, etc. as the Manufacturer. [Ruling by the ABC Director on Jan. 19, 2005.]

Persons not commissioned as law enforcement officers, including non-commissioned correctional facility employees, are not included as “law enforcement officers” for purposes of acquiring a license. [Ruling by the director on July 24, 2012]

This requirement does not apply to the person's spouse. [Subsection (a)(12) of K.S.A. 41-311]

Supervisor of law enforcement officers.

The person cannot hold a position that appoints or supervises any law enforcement officer. However, members of the governing body of a city or county (assume this means city council members and county commissioners) are exempt from this restriction. [Subsection (a)(7) of K.S.A. 41-311] Since this subsection does not mention jurisdiction, it is assumed that this restriction applies regardless of whether the person is located in the county, city, etc. as the Manufacturer. [Ruling by the ABC Director on Jan. 19, 2005.]

This requirement does not apply to the person's spouse. [Subsection (a)(12) of K.S.A. 41-311]

Acting as agent of another.

The person cannot intend to act as an agent for another in operating the licensed business. [Subsection (a)(8) of K.S.A. 41-311]

Previous liquor license revocation.

The person cannot have had a license revoked under the provisions of the Club and Drinking Establishment Act. [Subsection (a)(2) of K.S.A. 41-2623]

For an initial license, this requirement applies to the person's spouse. For a renewal license, this requirement does not apply to the person's spouse. [Subsection (a)(12) of K.S.A. 41-311 as referenced in subsection (a)(1) of K.S.A. 41-2623]

CMB license.

The person cannot hold a CMB license issued pursuant to the CMB Act, specifically K.S.A. 41-2702. [Subsection (a)(10) of K.S.A. 41-311]

Other liquor licenses.

The person cannot have a beneficial interest in a retailer, distributor, microdistillery or microbrewery license. [Subsection (c)(6) of K.S.A. 41-311, K.S.A. 41-305]

Previous finding of hidden beneficial interest

The person cannot, after a hearing before the Director, be found to have held an undisclosed beneficial interest in any liquor license which was obtained by means of fraud or any false statement made on the application for such license. [Subsection (a)(15) of K.S.A. 41-311]

Treatment of persons with a beneficial interest.

Any person who has a beneficial interest in the manufacturer’s license will be treated as a partner and therefore must also meet all of the qualifications for ownership that a person is required to meet. A lender will be considered to have a beneficial interest if the terms of repayment of the loan are conditioned upon the manufacturer's receipts or profits from the sale of alcoholic liquor. A lessor will be considered to have a beneficial interest if the amount of rent is based on whole or in part on a percentage of the manufacturer's receipts or profits from the sale of alcoholic liquor. All financing and lease agreements that exclude alcoholic beverage sales are subject to review and approval by the director. [Subsection (d) of K.A.R. 14-14-2]

Conviction of violating the intoxicating liquor laws.

The director may deny an initial license or deny renewal an existing license if the person or the person's spouse has been convicted of violating the intoxicating liquor laws of any state or the United States or has forfeited bond to appear in court on charges of any such violation, within 10 years immediately preceding the date of application for an initial license or for renewal of an existing license. [Subsection (a) of K.S.A. 41-330]

Conviction of violating the Cereal Malt Beverage Act.

The director may deny an initial license or deny renewal an existing license if the person or the person's spouse has been convicted of violating the laws of any state relating to CMB, within 10 years immediately preceding the date of application for an initial license or for renewal of an existing license. [Subsection (b) of K.S.A. 41-330]

Non-residents.

Each stockholder of a corporation who is a non-resident of Kansas on the date of application may be required to provide fingerprints, information and documentation as required by K.S.A. 41-311b so that ABC can determine whether they meet the criminal conviction requirement above.

Federal permit

The applicant must possess a basic permit issued by the federal government and must register with the federal government as an alcohol dealer. The application and registration forms are available for download from our new license webpage at https://www.ksrevenue.gov/abcmanufac.htmll or at http://www.ttb.gov/forms/f510024.pdf. [Ruling by the director, August 20, 2012]

Additional Requirements for Non-Residents

All non-resident applicants for a manufacturer’s license shall file with the Kansas Secretary of State its written consent, irrevocable, that any action or garnishment proceeding may be commenced against such applicant in the proper court of any county in Kansas in which the cause of action shall arise or in which the plaintiff may reside by the service of process on the resident agent specified in subsection (a), etc. The Irrevocable Consent to Jurisdiction (ABC-160) is used for this purpose. The Secretary of State requires a $35 filing fee for this form and charges $1 for each additional file-stamped copy. A file-stamped copy must be provided by the applicant to ABC. [Subsection (b) of K.S.A. 41-313]

The president and/or secretary of a corporation organized under the law of any other state or foreign country must sign a Resolution stating that he/she has authority to sign the Irrevocable Consent to Jurisdiction form (ABC-160). [Subsection (b) of K.S.A. 41-313] However, ABC will accept signatures of other corporate officers if accompanied by a letter stating (1) why the President and/or Secretary are not available to sign the form, and (2) that the officers who do sign the form have authority to do so on behalf of the corporation. [Ruling made by ABC attorney on July 6, 2005.]

Brand and Label Registration

Every manufacturer desiring to sell alcoholic liquor or cereal malt beverage to distributors in Kansas must first register each brand of alcoholic liquor or cereal malt beverage with the director prior to making shipments to distributors in Kansas. There is no fee for brand registration. [Subsection (b) of K.S.A. 41-331]

An annual registration fee of $25 must be paid by the manufacturer for each label to be sold in Kansas. [Subsection (b) of K.S.A. 41-331] Labels for each size of the same brand may be different, if the label includes the amount of alcoholic liquor in the container. Often, labels for different sizes of the same brand also differ in wording and artwork. Therefore, the label for each size of the same brand must be registered separately and the $25 fee paid.

If any changes are made to the approved label, the new label must be submitted for approval along with the $25 label fee. This includes any graphic changes, vintage changes, etc.

K.A.R. 14-6-5 prohibits having any false or misleading representations on the label.

Each label of alcoholic liquor and CMB sold in Kansas must comply with the labeling requirements of the Department of the Treasury, Alcohol and Tobacco Tax and Trade Bureau located at 27 CFR Parts 4, 5, and 7.

Labels for beer and malt beverage products are not required to list the alcohol content of the product. [Ruling by director, pursuant to K.S.A. 41-211(a)(8)]

Labels for wine containing less than 7% alcohol by volume, along with certain beers not considered “malt beverage” under federal guidelines, are not subject to prior TTB approval.

Manufacturers must register their brand(s) and label(s) online at https://www.ksabconline.gov. There is a $25 fee for each label (plus processing charges of 2.5% for credit cards and $1.50 for electronic checks) and the following documents must be submitted:

  1. Executed franchise agreement between the manufacturer and the Kansas distributor. For your convenience, you may use the Manufacturer Franchise Agreement for Brand Distribution in Kansas form (ABC-1032).
  2. State of Kansas map illustrating the designated territory (ABC-1005).
  3. Approved copy of the federal application for the Certificate of Label Approval - COLA or TTB form (TTBF 5100.31). If the label is not subject to federal approval, a copy of the label and the alcohol content (by volume) shall be submitted.

The ABC documents referenced above are available on the Brand Registration and Label Approval page on our website at http://www.ksrevenue.gov/abcbrandreg.html.

Value added packs

Manufacturers are authorized to include goods packaged with the alcoholic liquor for sale in retail liquor stores as long as they are approved by the director at least 30 days prior to the intended shipping date. [Subsection (a) of K.A.R. 14-10-11]

Value added packs are registered online. A color photo, not less than 5" by 7", of the complete package must be provided. There is no fee.

Combo packs

Combo packs are registered online. There is no fee.

Franchise Agreements for Specific Products and Geographic Distribution Rights

K.S.A. 41-410 requires that all distributors licensed in Kansas must provide to ABC a signed copy of the franchise agreement between the distributor and their supplier, manufacturer, farm winery, microbrewery or microdistillery.

Termination of an existing franchise agreement does not require ABC approval. However, the manufacturer must give ABC at least 30 days advance notice before the termination becomes effective.

Upon receipt of the notice of termination, the director is required to "immediately" send notice by certified mail to all affected parties of the impending termination, modification or alteration of the franchise agreement. [Subsections (c) and (d) of K.S.A. 41-410]

The ABC Marketing Unit will perform the following actions with regard to a termination of a distributor by a manufacturer:

  • Mail a letter by certified mail to all affected parties notifying them of the pending termination. This would include the distributor being terminated and the proposed new distributor, if any. A copy of the notice of termination from the manufacturer will be enclosed. The letter will state the effective date of the termination, which will be 30 days after ABC received the notice of termination from the manufacturer. A copy of this letter will also be sent to the manufacturer so that they are made aware of the effective date of the termination on ABC's records.
  • Unless prohibited by court order, on the next business day following the 30 day waiting period ABC will update the Active Brands database on ABC's website to reflect the termination and, if applicable, the transfer of products to the new distributor.

Voluntary relinquishment of a franchise agreement by a distributor will be processed by ABC in the same manner as a termination. [Ruling by the director, September 10, 2012]

Termination of a franchise agreement, other than by mutual agreement of the parties, must be for "reasonable cause." [Subsection (f) of K.S.A. 41-410] In any situation where termination is disputed, the aggrieved party may file an action in state district court to determine whether there is "reasonable cause." [Subsection (e) of K.S.A. 41-410]

The statutes do not address the situation where a manufacturer goes out of business with one or more franchise agreements still running with Kansas distributors. If approval is requested from ABC for a new franchise agreement on a product currently covered by a franchise agreement, and there is an assertion that the manufacturer under the existing franchise agreement has gone out of business, then ABC will require documents or evidence supporting the assertion.

A franchise agreement does not automatically terminate upon close of business by either the manufacturer or the distributor, unless the agreement specifically authorizes such termination.

Pricing Restrictions

Manufacturers are prohibited from discriminating against distributors with regard to the pricing of their products. [Subsections (a), (b) and (c) of K.S.A. 41-1101] A manufacturer will be deemed to have discriminated against a distributor if any of the following occur, either directly or indirectly:

  • The manufacturer offers or sells any alcoholic liquor in any manner at a price different than the current price offered to all other distributors;
  • The manufacturer requires a distributor to purchase in excess of one-case lot of any alcoholic liquor that is sold by the case;
  • The manufacturer refuses to sell any alcoholic liquor, except beer, to a distributor in a quantity ordered by the distributor in lots of one or more cases when such alcoholic liquor is sold by the case;
  • The manufacturer refuses to sell any alcoholic liquor to a distributor for cash at the current price if the alcoholic liquor is ordered in a lot of one case or more, and the price offered to all distributors is by the case;
  • The manufacturer refuses to sell any alcoholic liquor to any distributor unless the distributor agrees to purchase a different product in addition to or in lieu of what the licensee originally ordered; or
  • The manufacturer fails to fill distributor’s orders for alcoholic liquor, except beer, in the chronological order in which they were received from the distributors. This does not apply if the manufacturer is operating under a rationing plan approved by the director.

[Subsection (f) of K.A.R. 14-14-11]

Prices filed by a manufacturer for sales to distributors shall be the current prices, F.O.B. point of shipment, and shall be as low as the lowest price for which the item is sold by that manufacturer anywhere in the continental United States. However, in determining this “lowest price,” there shall be taken into consideration all advertising, depletion and promotional allowances and rebates made to purchasers in such state. [K.S.A. 41-1112]

Signs, Advertising, Trade Practices and Promotional Activities

For further clarification of trade practices involving product displays, point of sale items and equipment, refer to “Policy Memorandum 2016-1” located on the ABC webpage at: https://www.ksrevenue.gov/pdf/abcpm2016-1.pdf.

Outside signs.

Industry members may give, lend or sell basic signs advertising the industry member's products. The value of the signs may not exceed $400. The industry member cannot make payments or give credits to the licensee for displaying their sign and cannot pay for the installation, removal or operation of the sign. This would prohibit the industry member from supplying the structure to mount the sign on, such as a billboard, marquee with space to post additional information, a semi-trailer truck, etc. [27 CFR ch. 1, Sec. 6.102, as adopted by K.A.R. 14-10-17]

Definition of advertising.

"Advertising" means the medium of radio, television, newspapers, periodicals, circulars, pamphlets, or other publications or any sign or outdoor advertising or any other printed or graphic matter. [K.A.R. 14-8-1] Webster's Dictionary (New Riverside University Edition published in 1984) defines "graphic" as:

  • pertaining to written representation
  • pertaining to pictorial representation
  • pictorial device, as an illustration or chart
  • display by a computer or imaging device

Radio and television advertising.

Licensees may purchase live radio or TV commercials to take place at the licensed premises if the licensee pays the entire cost of the commercial. An industry member may be present and hand out promotional items to consumers on the premises during the time the commercial is broadcast but shall not participate in the commercial or pay any of the cost thereof. [Ruling by the Director on Aug. 1, 2005] A licensee may arrange for a radio or television station to run a remote broadcast from the licensee's parking lot or anywhere outside the licensed premises and the licensee or the radio or television station may give away food or promotional items at that location. Any food or other items may be given free to the public. The food cannot be paid for by an industry member (manufacturer, supplier or distributor).

Industry members selling, giving or lending equipment or supplies.

Industry members are prohibited from giving or lending money, equipment, supplies, services or anything of value to a licensee except as permitted by K.A.R. 14-10-17. The following are allowed:

  • Glassware, as long as the price is not less than what the industry member paid for it.
  • Tapping and dispensing equipment, as long as the price is not less than what the industry member paid for it.
  • Carbon dioxide gas and ice, as long as the price is not less than the local market price.
  • Coil cleaning service.

Industry members selling or giving services.

Industry members are prohibited from inducing licensees to purchase product from them by paying or crediting the licensee for any advertising, display or distribution service. The following practices are prohibited:

  • Participating in paying for an advertisement placed by the retailer.
  • The purchase of advertising on signs, scoreboards, programs, scorecards, and similar items from the retail concessionaire at ballparks, racetracks or stadiums.
  • The purchase of advertising in a publication of the retailer which is distributed to consumers or the general public.
  • Reimbursements to retailers for setting up product or other displays.
  • Rental of display space in the licensed premises.

[Subsection (d) of 27 CFR, ch. 1, Sec. 6.21, as adopted by K.A.R. 14-10-14]

Industry members shall not obtain tickets to a concert or other event and give them away to consumers either directly or through a third party if the concert or other event is being held on a licensee's premises. This is interpreted as furnishing something of value to the licensee (inducing consumers to visit the licensed premises) in violation of subsection (a) of K.S.A. 41-703. [Ruling by the Director on Aug. 1, 2005]

Industry members shall not arrange for a radio station to have its mobile unit park at a licensee's location and offer something of value to the public for finding the mobile unit and broadcast clues to find the mobile unit. This is interpreted as furnishing something of value to the licensee (inducing consumers to visit the licensed premises) in violation of subsection (a) of K.S.A. 41-703. [Ruling by the Director on Aug. 1, 2005]

However, industry members may furnish, give, rent, loan or sell newspaper cuts, mats or engraved blocks to a licensee for use in their advertising of the industry member's products. [27 CFR, ch. 1, Sec. 6.92, as adopted by K.A.R. 14-10-17]

Industry members may put the name of the retailer on the label or packaging of the products sold to retailers. If the name is added to a label that has previously been registered with ABC, the new label must be separately registered with ABC. [Ruling by the Director on Aug. 20, 2007]

Product displays.

Industry members may give or sell product displays to licensees. The selling or giving of the product displays may be conditioned upon the purchase of enough of the liquor products advertised on the display for the initial completion of the display. No other conditions are allowed. [Subpart (c)(3) of 27 CFR, ch. 1, Sec. 6.83, as adopted by K.A.R. 14-10-17]

"Product display" means any wine racks, bins, barrels, casks, shelving, or similar items whose primary function is to hold and display consumer products. [Subpart (b) of 27 CFR, ch. 1, Sec. 6.83, as adopted by K.A.R. 14-10-17] The total value, based on actual cost to the industry member, of all product displays given or sold by an industry member may not exceed $300 per brand at any one time in any one licensed premises. [Subpart (c)(1) of 27 CFR, ch. 1, Sec. 6.83, as adopted by K.A.R. 14-10-17]

All product displays must bear conspicuous and substantial, permanently affixed, advertising material about the product or the industry member. The product display may also include the name and address of the retailer. [Subpart (c)(2) of 27 CFR, ch. 1, Sec. 6.83, as adopted by K.A.R. 14-10-17]

Point of sale (POS) advertising materials.

Industry members may provide to licensees items intended to be used within the establishment to attract customers’ attention to the products of the industry member. Such advertising materials include, but are not limited to: posters, placards, designs, inside signs (electric, mechanical or otherwise), window decorations, trays, coasters, menu cards, paper napkins, foam scrapers, back bar mats, thermometers, clocks, calendars, banners, display cards, ceiling danglers, table tents and alcoholic beverage lists or menus dealing with alcoholic beverages. [Subpart (b)(1) of 27 CFR, ch. 1, Sec. 6.84, as adopted by K.A.R. 14-10-17]

All POS must bear conspicuous and substantial, permanently affixed, advertising material about the product or the industry member. The POS may also include the name and address of the retailer. [Subpart (c)(1) of 27 CFR, ch. 1, Sec. 6.84, as adopted by K.A.R. 14-10-17]

Consumer advertising specialties (CAS) offered by industry members.

Industry members may provide to licensees consumer advertising specialties that are designed to be carried away by the consumer, such as trading stamps, nonalcoholic mixers, pouring racks, ashtrays, bottle or can openers, corkscrews, shopping bags, matches, printed recipes, informational pamphlets, cards and leaflets, post cards, posters, printed sports schedules, pens, pencils, koozies, t-shirts, ball caps and other similar items as approved by the Director for distribution to the general public. [Subpart (b)(2) of 27 CFR, ch. 1, Sec. 6.84, as adopted by K.A.R. 14-10-17]

The CAS must bear conspicuous and substantial advertising material about the product or the industry member. The CAS may also include the retailer’s name and address. The licensee shall not be paid or credited in any manner, directly or indirectly, for this distribution service. [Subpart (c) of 27 CFR, ch. 1, Sec. 6.84, as adopted by K.A.R. 14-10-17]

Retailer-generated consumer advertising specialties (CAS).

A retailer (on or off-premise licensee) may generate and distribute unconditionally and free of charge to the general public CAS intended to be carried away by the consumer. Such items include ash trays, bottle or can openers, cork screws, matches, printed recipes, informational pamphlets, cards and leaflets, post cards, posters, printed sports schedules, pens, pencils, koozies, t-shirts, ball caps and other similar items as approved by the Director. Each CAS must bear conspicuous and substantial advertising material relating to the operation of the retail establishment.

There can be no requirement to purchase anything in order to receive the retailer-generated CAS. Industry members are prohibited from providing or paying for retailer-generate CAS.

Table 1: Point of sale and consumer advertising specialties quick reference

Type of Materials Purpose For consumers Advertising about Costs paid by Keep Records Notify ABC of New Items
Industry Member POS Materials provided by industry member for use within a retailer’s premises to attract customer attention to the products No Industry member or product
May include retailer’s information		 Industry member or retailer No No
Industry Member CAS Materials provided by industry member designed to be carried away by consumers Yes Industry member or product
May include retailer’s information		 Industry member or retailer No Yes
*Retailer- generated CAS Materials generated by retailers that are designed to be carried away by consumers Yes Retailer. Can include name, logo, address, phone, website, etc. Retailer No Yes

* Retailer means any on or off-premise establishment and includes retail liquor dealers, clubs, public venues, drinking establishments, and caterers.

Coolers

In response to an ABC question on the issue of stand-alone branded coolers provided to retailers by industry members, the TTB recently stated as follows:

  • “The Tied-house provisions of the FAA Act (27 U.S.C. 205(b)) provide that it is unlawful for an industry member (alcohol beverage producer, importer or wholesaler) to induce any retailer engaged in the sale of alcohol beverages to purchase such products from the industry member to the exclusion, in whole or in part, of alcohol beverage products sold or offered for sale by other persons in interstate or foreign commerce. Section 6.41 of TTB’s Tied–house regulations (27 CFR 6.41) provides that, subject to the Subpart D exceptions, the act by an industry member of furnishing, giving, renting, lending, or selling any equipment, fixtures, signs, supplies, money, services, or other things of value to a retailer constitutes a means to induce within the meaning of the FAA Act. There are no exceptions for providing coolers or other equipment to retailers free of charge. Accordingly, if an industry member provides a cooler to a retailer, for whatever reason and regardless of how it is branded, it would be considered an inducement.”

Therefore, as outlined in 27 CFR 6.88, it is not permissible for an industry member to give away a cooler to a retailer, regardless of how it is branded (alcoholic product or non-alcoholic product). However, a retailer may still purchase such a cooler, provided the amount paid by the retailer is not less than the cost to the industry member who initially purchased it. [Ruling by the Director, June of 2019]

Offering coupons, premiums, rebates and refunds to customers by industry members.

Industry members may offer coupons through retailers (on and off-premise licensees) to consumers if all retailers within the market where the offer is made may redeem the coupons. Industry members may not reimburse a retailer for more than the face value of all coupons redeemed, plus a usual and customary handling fee. [Subpart (a) of 27 CFR, ch. 1, Sec. 6.96, as adopted by K.A.R. 14-10-17] The Director has interpreted this regulation to also permit redemption of such coupons for free or discounted non- alcoholic items at grocery stores.

Industry members may offer contest prizes, premiums, refunds and like items directly to consumers. A premium may or may not be conditioned upon the purchase of an alcoholic beverage. The retailer shall not accept any reimbursement, payment or credit for providing this service to the industry member. Officers, employees and representatives of distributors and retailers shall be excluded from participation. [Subpart (b) of 27 CFR, ch. 1, Sec. 6.96, as adopted by K.A.R. 14-10-17]

"Premium" is not defined in the statutes or regulations but is defined by Webster's Dictionary as "something offered free or at a reduced price as an inducement to buy." and by Black's Law Dictionary as "a reward for an act done."

Industry member support of events sponsored by licensees.

Industry members may not support these events through the donation of money, advertising, consumer advertising specialties or product. [Subsection (a) of K.S.A. 41-702 and subsection (a) of K.A.R. 14-14- 11] Subsection (e) of K.S.A. 41-703 authorizes the Secretary of Revenue to adopt rules and regulations authorizing exceptions to the general prohibition in K.S.A. 41-702. K.A.R. 14-10-1 et seq. dictates exceptions to the prohibition on industry members giving anything of value to retailers and it does not provide for any assistance with licensee sponsored events, whether they be fundraising or otherwise. Industry members may participate in these events but any fees paid by such industry members shall be the same as paid by any other participant.

Industry member support of fundraising events sponsored by charitable organizations with sponsorship in whole or in part by a liquor licensee.

Industry members may support these events through the donation of money and consumer advertising specialties directly to the charity, but not to the event sponsor or any other party. They may not donate product. Industry members may participate in these events, however any contributions made or fees paid by such industry members shall be the same as that contributed or paid by any other participant.

Industry member support of fundraising events sponsored by charities, not-for-profit organizations with no retailer involvement.

Industry members may support these events through the donation of money and consumer advertising specialties directly to the charity. They may not donate product. Industry members may participate in these events, however any contributions made or fees paid by such industry members shall be the same as that contributed or paid by any other participant.

Industry member support to liquor association sponsored events.

Industry members may participate in these events to a limited extent. Industry members may: display products at a convention or trade show; rent display space at the same rental rate paid by all other exhibitors; provide hospitality independent from that provided by the retail association; purchase tickets to functions and pay registration fees at the same price paid by all other attendees, participants, or exhibitors; and pay for advertising in programs or brochures if the total payments made by an industry member for all such advertisements does not exceed $300 per year for any retail association. [27 CFR, ch. 1, Sec. 6.100, as adopted by K.A.R. 14-10-17]

Table 2: Industry member support to fundraising and other events

Type of Event/ Support Retailer Sponsored Event Charity sponsored events with retailer involvement Charity sponsored events with NO retailer involvement Liquor association sponsored events
Monetary Donations No Conditional (2) Yes No
Product Donations No No No Conditional (3)
CAS Donations No Conditional (2) Yes Yes
Participation Fees Conditional (1) Conditional (1) Yes Conditional (1)

Conditions

  1. Participation fees not in excess to those paid by all other participants.
  2. May only be provided to the charity. Donations may not go through retailer or any other party.
  3. May be provided as hospitality or at industry seminars.

Gallonage Tax and Reporting

Manufacturers must pay gallonage tax on all alcoholic liquor and CMB manufactured for human consumption or imported into Kansas by the manufacturer. This tax is to be collected at the time of manufacturing or bottling. [Subsection (a) and (b) of K.S.A. 41-501] The tax rates are set by K.S.A. 41-501 as follows:

  • 18 cents per gallon on beer and cereal malt beverage;
  • 20 cents per gallon on wort or liquid malt;
  • 10 cents per pound on all malt syrup or malt extract;
  • 30 cents per gallon on wine containing 16 percent or less alcohol by volume;
  • 75 cents per gallon on wine containing more than 16 percent alcohol by volume; and
  • $2.50 per gallon on all spirits

Gallonage tax is assessed on:

  • Alcoholic liquor or cereal malt beverage manufactured in Kansas. [Subsection (b)(2) of K.S.A. 41-501]
  • Alcohol imported into Kansas to be used as an ingredient in manufacturing alcoholic liquor for beverage purposes. [Subsection (b)(2) of K.S.A. 41-501]
  • Alcohol purchased as an ingredient to be used in manufacturing alcoholic liquor for beverage purposes from another Kansas manufacturer. However, the manufacturer purchasing the alcoholic liquor reduces their gallonage tax by the amount the selling manufacture previously paid. As a result, the purchasing manufacturer is actually only paying gallonage tax on the increase in the volume of the alcoholic liquor or that occurred during its manufacturing process. [Subsection (j) of K.S.A. 41-501]

Gallonage tax is not assessed on:

  • Alcoholic liquor and CMB that are shipped to a location outside of Kansas. [Subsection (c) of K.S.A. 41-501]
  • Wines that are manufactured solely and exclusively for sacramental purposes (religious ceremonies conducted by authorized representatives of churches or other religious groups). [Subsection (d) of K.S.A. 41-501]
  • Alcohol or wine that is manufactured for non-beverage purposes and sold to a non-beverage user licensed as such in Kansas. [Subsection (e)(1) of K.S.A. 41-501]
  • Alcoholic liquor or CMB sold by the manufacturer to Kansas distributors. [Subsection (b)(2) of K.S.A. 41-501]

Manufacturers must report all products manufactured each month and remit the gallonage tax using form ABC-273 Gallonage Tax Return and Report (which is available on our website at http://www.ksrevenue.gov/abcforms.html) no later than the 15th day of the following month in which the alcoholic liquor or CMB was manufactured or purchased. [K.S.A. 41-502] This report must be filed each month even if manufacturer did not manufacture or import/purchase any alcoholic liquor or CMB the previous month. [K.S.A. 41-601]

Payment by electronic funds transfer is available. Contact the department’s Electronic Services Unit at http://www.ksrevenue.gov/eftabcinfo.html for more information. No manufacturer must remit payment for any monthly gallonage tax less than $5. [Revenue Ruling, 2010]

Records to be Retained and Available for Inspection

Records of all equipment, supplies, samples, retailer advertising specialty items and product display items furnished to retailers, clubs, drinking establishment, public venues or caterers must be kept on the manufacturer’s licensed premises for a period of three years. Each record shall contain the following information:

  • name and address of the retailer, club, drinking establishment or caterer receiving the item
  • date furnished
  • description of the item furnished
  • cost of the item furnished to the industry member
  • any charges to the retailer, club, drinking establishment and caterer

[27 CFR Part 6, Subpart D, Sec. 6.81(b), as adopted by reference in K.A.R. 14-10-17]

Each manufacturer shall maintain records of all alcoholic liquor or wine sold to a non-beverage user. The records shall show the quantities of alcoholic liquor and wine sold to any non-beverage user, the name, address, and license number of the non-beverage user and any other information the director may require. [Subsection (b) of K.A.R. 14-14-10]

  • For a period of 90 days after the sale, the records must be kept on the licensed premises. The records may be in electronic or paper format. If electronic, the records must be available to print upon request by the director or any agent or employee of the director. [Ruling by the director on July 16, 2012]
  • After 90 days, the records may be stored off the licensed premises but shall be provided within a reasonable time upon request. [Ruling by the director on July 16, 2012]

These records are subject to inspection by the director or any agent or employee of the director. [Subsection (e) of K.A.R. 14-14-8]

Packaging and Warehousing Facility Permits

Any manufacturer of alcoholic liquor or CMB, or a holder of a distilled spirits plant permit issued by the TTB, may apply for an annual packaging and warehousing facility permit. The application for such permit shall be on a form prescribed by the director and shall include all information the director deems necessary. [Subsection (a) of K.S.A. 41-352]

The annual fee for a packaging and warehousing facility permit shall be $2,500. [Subsection (c) of K.S.A. 41-352]

A packaging and warehousing facility permit allows the holder to do the following:

  • Transfer alcoholic liquor and CMB to the licensed premises of a packaging and warehousing facility for the purposes of packaging and storage;
  • Sell and transfer alcoholic liquor and CMB from the licensed premises of a packaging and warehousing facility to the licensed premises of a spirits, wine or beer distributor licensed in Kansas, or to a Kansas supplier;
  • Transfer alcoholic liquor and CMB from the licensed premises of a packaging and warehousing facility to another state; and
  • Receive and transfer alcoholic liquor in bulk from any manufacturer, supplier, farm winery, microbrewery or microdistillery of alcoholic liquor or CMB, whether licensed in Kansas or any other state, for the purposes of packaging such alcoholic liquor in cans or bottles.

[Subsection (b) of K.S.A. 41-352]

Each brand and label of alcoholic liquor or CMB intended for sale to Kansas distributors that is transported, packaged or stored at a licensed packaging or warehousing facility permit must be registered in accordance with K.S.A. 41-331. [Subsection (d) of K.S.A. 41-352]

Gallonage tax shall be paid on any alcoholic liquor or CMB imported into Kansas under a packaging and warehousing facility permit only if the alcoholic liquor or CMB is sold to a Kansas distributor at wholesale, and shall be paid by such distributor. [Subsection (e) of K.S.A. 41-352]

Authorized Activities

Distribution of manufactured products to Kansas distributors.

Manufacturers may distribute their alcoholic liquor and cereal malt beverage intended for human consumption in Kansas through a distributor licensed in Kansas. [K.S.A. 41-305]

Distribution of manufactured products outside of Kansas.

Manufacturers may distribute their alcoholic liquor and cereal malt beverage intended for human consumption to businesses outside of Kansas if legal in the jurisdiction where the business is located. [K.S.A. 41-305]

Wines manufactured solely and exclusively for sacramental purposes.

Wines manufactured solely and exclusively for sacramental purposes (religious ceremonies) may be sold to bonafide churches and religious organizations for use in religious ceremonies. [K.S.A. 41-105]

Sale of alcohol and wine intended for non-beverage use.

Manufacturers may sell alcoholic liquor to a nonbeverage user licensed in Kansas. [K.S.A. 41-305]

Server training.

Manufacturers may provide free server training to clubs or drinking establishments either directly or indirectly through a group of manufacturers or a third party contractor. [Ruling by the ABC director on Jan. 24, 2005]

Serving of samples on the licensed premises.

Manufacturers may serve on the licensed premises free samples of alcoholic liquor or cereal malt beverage manufactured by the licensee if the premises are located in a county where the sale of alcoholic liquor is legally permitted in licensed drinking establishments. [Subsection (b) of K.S.A. 41-305]

Holding a drinking establishment license

Any person with a beneficial interest in a manufacturer may be issued one drinking establishment license. [Subsection (a)(3)(F) of K.S.A. 41-2623]

Such drinking establishment licensee’s licensed premises shall not be the same as the manufacturer’s, and shall be located no more than two miles (to be measured by the usually traveled road) from the manufacturer’s licensed premises. [Subsection (d)(2) of K.S.A. 41-2642]

Such drinking establishment licensee shall not sell alcoholic liquor manufactured by the manufacturer to the exclusion of other alcoholic liquor. All beer and CMB sold by such drinking establishment licensee shall be acquired from a distributor or retailer licensed under the Kansas Liquor Control Act. All wine and spirits sold by such drinking establishment licensee shall be acquired from a retailer or farm winery licensed under the Kansas Liquor Control Act who possesses a federal wholesaler’s basic permit. [Subsection (g) of K.S.A. 41-2642]

Prohibited Activities

Sales in federal areas.

Manufacturers shall not directly sell any alcoholic liquor in a federal area. The penalty for violation is revocation of the manufacturer's license. [Subsection (a) of K.S.A. 41-329] A "federal area" means any lands or premises which are located within the exterior boundaries of Kansas and which are held or acquired by or for the use of the United States or any department, establishment or agency of the United States. [Subsection (a)(2) of K.S.A. 41-501]

Interest in licensed distributor.

Manufacturers shall not directly or indirectly own or have any interest in a distributor licensed in Kansas. [K.S.A. 41-704]

Serving alcoholic liquor or cereal malt beverage to a person under 21.

Manufacturers shall not serve any alcoholic liquor or cereal malt beverage to any person who is not at least 21 years of age. [Subsection (b) of K.S.A. 41-305]

Allowing samples to be taken off the licensed premises.

Manufacturers shall not allow any sample of alcoholic liquor or cereal malt beverage served on the licensed premises to be removed from the manufacturer’s premises. [Subsection (b) of K.S.A. 41-305]

Sale of powdered alcohol.

A licensee shall not sell or offer for sale any powdered alcohol. [K.S.A. 41-730]

Giving free product.

A manufacturer may not give away or donate product to any person or organization for any reason. [K.S.A. 41-406, 41-406a and 41-407, read in conjunction with K.S.A. 41-104] A manufacturer wishing to participate in a charitable event may donate money, which the charitable organization may use as it sees fit, which may include the purchase from a retail liquor store of the products manufactured by that manufacturer.

Administrative Actions for Violations of Statutes and Regulations

If an ABC Enforcement Agent observes a violation of the state liquor statutes or administrative regulations, the agent may issue an administrative citation setting forth the details of the violation as listed in subsection (c) of K.S.A. 41-106. The Agent shall deliver the administrative citation to the licensee or person in charge of the licensed premises at the time of the violation. A copy of the administrative citation shall also be sent to the licensee by U.S. mail within 30 days after the date of the violation. [Subsection (a) of K.S.A. 41-106]

If a law enforcement officer from any other law enforcement agency observes a violation of the state liquor statutes, the law enforcement officer may prepare a notice of the violation (Form ABC-60) and serve the notice on the licensee or person in charge of the licensed premise. The law enforcement officer shall then submit a report of the violation to ABC for review to determine if administrative action should be taken against the licensee. If ABC decides to take action, then an administrative citation and notice of administrative action is sent to the licensee by U.S. mail within 30 days after the date of the violation. [Subsection (b) of K.S.A. 41-106]

The “person in charge” is defined as any individual or employee present on the licensed premises at the time of the alleged violation who is responsible for the operation of the licensed premises. If no individual or employee has been designated by the licensee as being in charge, then any employee present is considered the “person in charge” for the purpose of delivering an administrative citation by an ABC Enforcement Agent or for delivering a notice of violation by any other law enforcement officer. [Subsection (e) of K.S.A. 41-106]

The director may suspend, involuntary cancel or revoke any license issued by the Division of Alcoholic Beverage Control for any of the following reasons after the issuance of a citation to the licensee and a hearing conducted by the director pursuant to the Kansas Administrative Procedures Act (KAPA) in which the licensee has an opportunity to participate:

  • Providing false information on the license application or at any hearing relating to the issuance of the license.
  • Violation of any provision of the Liquor Control Act or any administrative regulation adopted pursuant to such act
  • No longer meets the qualifications to obtain a license pursuant to K.S.A. 41-311 or K.S.A. 41-311b.
  • Violation of any of the provisions of a lawfully entered order of the director.

[Subsections (a) and (b) of K.S.A. 41-320 and K.A.R. 14-16-15]

Any order by the director suspending, involuntarily cancelling or revoking an existing license, or imposing a fine on a licensee is appealable to the Secretary of Revenue by filing a form available from the office of the Secretary. The form must be either mailed to the Secretary by certified mail or personally served upon the office of the Secretary within 15 days from the date of service of the director’s order upon the licensee. The review of the director’s order will be conducted in accordance with the provisions of the (KAPA). [K.S.A. 41-321]

The director may also impose a civil fine not exceeding $1,000 for each violation. Any fine imposed for a violation of the act shall be by written order of the director and state the nature of the violation, amount of fine, and the right of the licensee to appeal the order. A licensee will be granted a formal hearing under KAPA upon written request to the director. Fines are to be remitted to the State Treasurer for deposit into the state general fund. [K.S.A. 41-328]

The director may determine a penalty based on the ABC’s fine and penalty schedule, dated July 16, 2012. Penalties may vary from the schedule based on the presence of mitigating or aggravating circumstances. The liquor penalty grid is available for download from our website at https://www.ksrevenue.gov/pdf/LiqPenGrid.pdf.

Licensing Bond

Manufacturers must post and maintain a licensing bond in the amount of $25,000. [Subsection (g)(1) of K.S.A. 41-317] Bond shall be posted on form ABC-803 (escrow bond) or form ABC-804 (surety bond)

Bonds shall be made payable to the Kansas director of Alcoholic Beverage Control for and on behalf of the State of Kansas. Surety bonds shall be countersigned by an agent whose authority to sign the bond on behalf of the bonding company shall be evidenced by a duly executed power of attorney, a copy of which shall be attached to the bond at the time it is filed with the director. [K.A.R. 14-17-1]

Revised 08/2022