DAN MORAL= 

ATmwEy GENERAL 

QMfice of the Bttornep Q3eneral 

Otate of Qexag 

Honorable Erwin W. Barton 

chairman 

Human Services Committee 

Texas House of Representatives 

P.O. Box 2910 

Austin, Texas 78769-2910 

May 17,199l 

Opinion No. DM-SA (Clarification) 

Re: Whether section 102.51 of the Alcoholic 

Beverage Code imposes a territorial limitation on the resale of beer by local distributors (RQ-2151) 

Dear Representative Barton: 

You ask about the territory in which a local beer distributor may resell beer. 

Your question requires an interpretation of both section 102.51 and section 102.52 

of the Alcoholic Beverage Code. Section 102.51 provides in part: 

(a) Each holder of a marmfacturer’s or nonresident 

mamrfacturer’s license shall designate territorial limits in this 

state within which the brands of beer the licensee mamrfactures 

may be sold by general, local, or branch distributor’s licensees. 

(b) Each holder of a general, local, or branch distributor’s 

license shall enter into a written agreement with each 

manufacturer from which the distributor purchases beer for 

distribution and sale in this state setting forth the sales territory 

within which each brand of beer purchased by that distributor 

may be distributed and sold. No holder of a general, local, or 

branch distributor’s license shag make any sales of any brand of 

beer outside the sales territory specified in the written 

agreement. 

Section 102.52 provides as follows: 

(a) Nothing in Section 10251 of this code limits or alters the 

right of a holder of a general, local, or branch distributor’s 

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license to sell beer to any other holder of a general, local, or 

branch distributor’s license, except that a distributor who has 

purchased beer from another distributor may distribute and sell 

the beer only within a territory for which the mamtfacturer of 

the brand has designated that it may be sold by a distributor. 

(b) A holder of a general, local, or branch distributor’s 

license may not purchase, possess, transport, or sell any brand of 

beer outside of the county in which the distributor’s licensed 

premises are located unless the distributor has a written 

assigned territory from the holder of a manufacturer’s or 

nonresident manufacturer’s license covering that brand of beer. 

You interpret sections 102.51 and 102.52 to mean that local distributors are 

required to limit beer distribution to the territories in which general distributors 

may resell beer. See genenrlly Alto. Bev. Code 5% 64.01. 66.01 (holder of general 

distributor’s license or branch distriiutor’s license may sell beer to and receive beer 

from general, local, or branch distributors). You also inform us that some local 

distributors have taken the position that those provisions permit them to resell a 

particular brand in any part of the state in which the manufacturer permits the sale 

of that brand. Neither of these interpretations is entirely correct. The correct 

interpretation depends on whether the local distributor purchased beer directly 

from a manufacturer or from a general distributor. When the local distributor 

purchases beer directly from the manufacturer, the statutes make clear that the 

distributor may distribute a particular brand of beer only in the territory assigned to 

the local distriiutor by the manufacturer. When a local distributor purchases beer 

from another distributor, sections 102.51 and 102.52 limit the territory where the 

local distributor may resell the beer to the territory assigned to the general 

distributor by the manutkturer from whom the general distrib.utor originally 

purchased the beer. 

In response to your suggestion that a local distributor may resell a brand of 

beer purchased from a general distriiutor in the territory assigned to the general 

distributor, we note that subsection (b) of section 102.51 states that a holder of a 

local distributor’s license may not “make any sales of any brand of beer outside the 

sales territory specified in the written agreement.” Nothing in that language 

suggests that the territorial limitation applies only to beer a general distributor 

purchases directly from a manufacturer. Further, subsection (b) of section 102.52 

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states that a holder of a local distributor’s license may not sell any brand of beer 

outside the county of the distributor’s licensed premises “unless the distributor has a 

written assigned territory from the holder of a manufacturer’s or nonresident 

mamtfacturer’s license covering that brand of beer.” Those provisions clearly 

disallow the possibility that a local distributor can expand his assigned territory or a 

territory assigned to a general distributor by purchasing beer from the general 

distributor rather than from the manufacturer. 

Those provisions negate the local distributors’ suggestion that a local 

distributor who purchases a brand of beer from a general distributor, rather than a 

manufacturer, may sell that beer in any territoty in which that brand may be sold by 

my distributor. Subsection (a) of section 102.52 does contain a clause stating that “a 

distriiutor who has purchased beer from another distributor may distribute and sell 

the beer only within a territory for which the manufacturer of the brand has 

designated that it may be sold by a distributor.” Standing alone, that language might 

support the local distributors’ suggestion. That interpretation is, however, in direct 

conflict with subsection (b) of section 102.51 and subsection (b) of section 102.52, 

both of which limit a local distributor’s authority to sell beer to the territory assigned 

to the general distributor by the manufacturer when the local distributor purchases 

from the general distributor. Since subsection (b) of section 102.51 and subsection 

(b) of section 10252 were both enacted later than subsection (a) of section 102.52, 

those provisions prevail. Taas State Board of Pharmacy v. K&man, 550 S.W.2d 104 

(Tex. Civ. App.--Tyler 1977, no writ) (when statutes conflict, later-enacted prevails); 

see Acts 1983,6&h Leg., ch. 959, 0 1, at 5229 (amending subsection (b) of section 

102.51); Acts 1979, 66th Leg., ch. 33, $ 9, at 55 (adding subsection (b) to section 

102.52); Acts 1975.64th Leg., ch. 20,s 1, at 41 (adding substance and basic language 

of section 102.52(a)). In conclusion, a local distributor who purchases beer from a 

general distributor may sell a brand of beer only in the territoty assigned to the 

general distributor by the manufacturer of that brand. 

SUMMARY 

A local beer distributor may resell a particular brand of 

beer that he purchases from a general distributor only in the 

territory in which the general distributor is authorized by the 

mamtfacturer to sell that brand. When a local distributor 

purchases beer from a manufacturer, the local distributor may 

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only resell the beer in the territory specified in his written 

agreement with the manufacturer. 

DAN MORALES 

Attorney General of Texas 

WlLL PRYOR 

First Assistant Attorney General 

MARY KELLER 

Executive Assistant Attorney General 

RENEAHICKS 

Special Assistant Attorney General 

MADEJXINE B. JOHNSON 

Chair, Opinion Committee 

Prepared by Sarah Woelk 

Assistant Attorney General 

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