DAN MORALES 

ATTORSLY ‘ESERAL 

Honorable Erwin W. Barton 

chairman 

Human Services Committee 

Texas House of Representatives 

P. 0. Box 2910 

Austin, Texas 78769-2910 

Dear Representative Barton: 

Office of the !&tornep @eneral 

Btate of lltexae 

February 26,199l 

Opinion No. DM-5 

Re: Whether section 102.51 of the Alcoholic 

Beverage Code imposes a territorial 

limitation on the resale of beer by persons 

who purchase from general distributors 

(RQ-2151) 

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

local distributor purchased from a general beer distributor. 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 manufacturer’s or nonresident manufacturer’s 

license shall designate territorial limits in this state within which the 

brands of beer the licensee manufactures 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 shall make any sales of 

any brand of beer outside the sales territory specified in the written 

agreement. 

Section 102.52 provides as follows: 

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Honorable Erwin W. Barton - Page 2 (DM-5) 

(a) Nothing in Section 102.51 of this code limits or alters the right 

of a holder of a general, local, or branch distributor’s 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 manufacturer 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 of the General Distributors from 

whom they purchase the beer.” See Penerallv Alto. Bev. Code (is 64.01, 66.01 (holder of 

general distributor’s license or branch distributor’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. We ’ 

think that both of those interpretations are incorrect. The statutes make clear that a local 

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

local distributor by the manufacturer, regardless of whether the local distributor purchased 

the beer directly from the manufacturer or from another distributor. 

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

purchased from a general distributor 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 distributor purchases directly from a manufacturer. Further, subsection (b) 

of section 102.52 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 

manufacturer’s license covering that brand of beer.” Those provisions clearly disallow the 

possibility that a local distributor can expand his assigned territory for a brand of beer by 

purchasing beer from a general distributor rather than a manufacturer. 

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Honorable Erwin W. Barton - Page 3 ( DM-5 ) 

Those provisions also 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 territory in which that brand may be sold by any 

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

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 local distributor by the manufacturer. 

Since’ subsection (b) of section 102.51 and subsection (b) of section 102.52 were both 

enacted later than subsection (a) of section 102.52, those provisions prevail. Texas Stat% 

d of Pharmacv v. Kittman, 550 S.W.2d 104 (Tex. Civ. App. -- Tyler 1977, no writ) 

(when statutes conflict, later-enacted prevails); s Acts 1983, 68th Leg., ch. 959, at 5229 

(amending subsection (b) of section 102.51); Acts 1979, 66th Leg., ch. 33, at 55 (adding 

subsection (b) to section 102.52); Acts 1975,64th Leg., ch. 20, 9 1, at 41 (adding substance 

and basic language of section 102.52(a)). In conclusion, a local distributor may sell a brand 

of beer only in the territory assigned to him by the manufacturer of that brand, regardless 

of whether the local distributor purchased the beer from the manufacturer or from another 

distributor. 

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 local distributor is authorized by the manufacturer to sell that 

brand. 

Very truly yours, 

., .be, /afo,L 

DAN MORALES 

Attorney General of Texas 

WILL PRYOR 

First Assistant Attorney General 

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Honorable Erwin W. Barton - Page 4 (DM-5) 

MARY KELLER 

Executive Assistant Attorney General 

RENEA HICKS 

Special Assistant Attorney General 

SUSAN GARRISON 

Acting Chairman, Opinion Committee 

Prepared by Sarah Woelk 

Assistant Attorney General 

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