Section 100.150  Salvaged Alcoholic Liquors

a)         Insurance companies or their duly authorized representatives may take possession of alcoholic beverages insured by such companies and damaged as a result of flood, wreck, fire or similar occurrence, for which insurance was provided.

b)         Common carriers or their duly authorized representatives may take possession of alcoholic beverages transported by such carrier and damaged in transit.

c)         Alcoholic beverages salvaged may be sold to retail licensees provided the conditions enumerated in this Section have been complied with. Alcoholic beverages so salvaged shall be referred to as "distressed merchandise".

d)         Each container of alcoholic beverages sold pursuant to this Section shall be labeled to identify the goods as distressed merchandise. The letters on the label shall be no smaller than 12 point type, bold faced. The label shall be no less than two inches long and one inch wide, and shall be affixed diagonally over the regular label on each container prior to delivery to any retail licensee. The label once applied shall not be capable of removal without damaging the label or causing damage to the underlying product label.  The following statement shall be printed on the label: "The alcoholic beverages contained herein have been designated distressed merchandise by the Illinois Liquor Control Commission. This container has been salvaged from a fire, flood, wreck or similar catastrophe. This label is not affixed by the manufacturer. Do not remove this label."

e)         Any insurance company, common carrier, or representative of either, seeking to sell distressed merchandise shall first obtain a distributor's license from the Commission. The application shall provide, "The applicant seeks to sell distressed merchandise in Illinois." Retailer's licenses may also be applied for, if the insurance company, common carrier, or representative of either, seeks to sell alcoholic liquors to consumers in Illinois.

f)         Alcoholic beverages so salvaged outside of Illinois may not be imported into Illinois for purposes of sale pursuant to this Section. Prior to release of distressed merchandise for sale in Illinois, an affidavit by the insurance company's or common carrier's authorized representative must be presented to the Commission stating first hand knowledge that the distressed merchandise was salvaged from a fire, flood, wreck or similar catastrophe which occurred within the State of Illinois, stating with particularity the time, place and nature of the occurrence, and a complete inventory of the items so salvaged, including the quantity, brand names and container sizes.

g)         In the event the tax provided under Art. VIII of the Act [235 ILCS 5/Art. VIII] is unpaid on the distressed merchandise, the applicant shall make payment of the tax on such merchandise to the Department of Revenue, and evidence of payment must be presented to the Commission prior to release of such distressed merchandise for sale in Illinois.

h)         An entity seeking to sell distressed merchandise shall also indicate on its letter of application to sell such distressed merchandise in Illinois whether the sale shall be by auction or to a designated licensee. If the sale shall be by auction, the time and place of the auction and the name of the auctioneer or other person authorized to sell such distressed merchandise shall be listed. If the sale is to be made directly to a given licensee or licensees, the name and address of the licensee or licensees, together with the current State retail liquor license number of such licensee or licensees, shall be listed. No sale may be made by auction to any person, firm or corporation not licensed under the provisions of the Act.

i)          Written approval and release for sale made under this Section must first be obtained from the Commission. Approval and release shall not be issued until a physical inspection has been made of the merchandise by an authorized representative of the Commission in order to determine that the seller has complied with this Section. After any sale of distressed merchandise has been completed, the insurance company, common carrier, or their representative, shall report in writing to the Commission the name of the licensee or licensees who purchased the distressed merchandise and the quantities and brand names of such distressed merchandise.

j)          In the event that the seller disposed of less than the entire inventory of distressed merchandise, the written report shall list the remaining inventory, indicating the quantity, container sizes and brand names, the place where such inventory is stored, and the person in control or possession of such inventory.

k)         No distressed merchandise shall be sold in Illinois where the original packages have been so damaged as to render the label illegible, or when the substantive labeling requirements under Section 6-7 of the Act [235 ILCS 5/6-7] and under Section 100.70 are not complied with as a result of the damage to the container.

(Source:  Amended at 23 Ill. Reg. 3787, effective March 15, 1999)