845-006-0410 Custom Order Agreements (1) "Custom order agreement" means an agreement whereby a Brewery or Brewery-Public House licensee agrees to produce or manufacture malt beverages based on certain specifications for a commission licensee authorized by the commission to receive the malt beverages under a custom order agreement. (2) Malt beverages produced or manufactured under a custom order agreement are produced or manufactured by the producing Brewery or Brewery-Public House licensee and not by the receiving licensee. (3) Privilege taxes for malt beverages produced or manufactured under a custom order agreement are due from the producing licensee when the producing licensee sells or transfers the malt beverage to the receiving licensee. Despite this requirement, the producing licensee may qualify for nonpayment of privilege taxes under ORS 473.050. (4) A Brewery licensee: (a) May not use a custom order agreement to produce or manufacture malt beverages for a retail licensee as defined in ORS 471.392. Despite this requirement, a Brewery licensee may use a custom order agreement to produce or manufacture malt beverages for a Full On-Premises Sales licensee licensed to the same licensee of record as the Brewery licensee. (b) May use a custom order agreement to produce or manufacture malt beverages for a Brewery-Public House licensee. The custom order agreement must be in writing and both parties must comply with ORS 471.398. The custom order agreement does not absolve the receiving Brewery-Public House licensee from complying with all other laws and rules regulated by the commission. The custom order agreement must identify the malt beverage by a specific formula and it must identify a defined period of time for the agreement that is no longer than 60 days from production to delivery of the malt beverage to the receiving licensee. The agreement may not allow the producing Brewery licensee to store the malt beverage longer than the 60 day time period. The Brewery licensee and Brewery-Public House licensee shall provide the written custom order agreement to the Commission within 10 calendar days of the Commission's request for the agreement. (c) May use a custom order agreement to produce or manufacture malt beverages for a manufacturer or wholesaler as defined in ORS 471.392. (d) A violation of this section is a Category III violation. (5) A Brewery-Public House Licensee: (a) May not use a custom order agreement to produce or manufacture malt beverages for a retail licensee as defined in ORS 471.392. Despite this requirement, a Brewery-Public House licensee may use a custom order agreement to produce or manufacture malt beverages for a retail premises licensed to the same licensee of record as the Brewery-Public House licensee. (b) May use a custom order agreement to produce or manufacture malt beverages for a different Brewery-Public House licensee. The custom order agreement must be in writing and both parties must comply with ORS 471.398. The custom order agreement does not absolve the receiving Brewery-Public House licensee from complying with all other laws and rules regulated by the commission. The custom order agreement must identify the malt beverage by a specific formula and it must identify a defined period of time for the agreement that is no longer than 60 days from production to delivery of the malt beverage to the receiving licensee. The agreement may not allow the producing Brewery-Public House licensee to store the malt beverage longer than the 60 day time period. The producing Brewery-Public House licensee and receiving Brewery-Public House licensee shall provide the written custom order agreement to the Commission within 10 calendar days of the Commission's request for the agreement. (c) May use a custom order agreement to produce or manufacture malt beverages for a manufacturer or wholesaler as defined in ORS 471.392. The custom order agreement must be in writing and both parties must Page 10 of 15 comply with ORS 471.398. The Brewery-Public House licensee and receiving licensee shall provide the written custom order agreement to the Commission within 10 calendar days of the Commission's request for the agreement. (d) A violation of this section is a Category III violation. Statutory/Other Authority: 2019 OL Ch. 373 History: OLCC 16-2019, adopt filed 12/27/2019, effective 01/01/2020