The allowance is reasonable and attainable by the average wholesaler who makes purchases from the supplier. The allowance has a specific beginning and ending date. Suppliers may not mandate wholesaler participation in a depletion allowance program but may, as a condition to wholesale participation, require the wholesaler to share in the cost of the program by offering a concurrent and uniform price reduction to retailers. Whether or not the wholesaler elects to participate in a depletion allowance program cannot have any affect on the invoice price of purchases made from the supplier by the wholesaler during the same period. Notice and details of depletion allowance programs are provided to all wholesalers in advance.
Depletion allowances are only applicable from suppliers to wholesalers.
A wholesaler to retailer depletion allowance or rebate program would not be allowed as it would be deemed contrary to Section 12-104 of Article 2B re a wholesaler providing something of value to a retail licensee. An ending date of until further notice would be acceptable providing advance notice of program discontinuance or alteration is provided to all accounts. Rain Checks on discount programs are prohibited and no orders should be taken for products not in inventory. A discount plan must be reasonable and attainable by the average account who makes purchases from the supplier or wholesaler. A sliding scale discount plan is also acceptable if incremental discount levels are established whereby different size accounts along the continuum are able to participate at some level and the different levels are relatively proportional.