Product refresh/swap with distributor due to repackaging/rebranding

[Old385]

Hi folks,

Honestly not sure if this is a federal, state or both issue. We have product that was sold to our distributor a while back prior to a rebranding/repackaging initiative. The distributor wishes to swap product for product exact amounts of the two year old previous packaged product for the current product. Does anyone know what is involved in making that happen? We also have a small amount of product that demonstrated cloudiness when the winter hit. We would like to be able to return/refilter that product. Appreciate any guidance.

[daveflintstone]

It's a straight swap, bottled product for bottled product, why bother to contemplate anything additional? 

For reference, driving 1 mile over the posted speed limit is illegal, and where I live it's against the law to drive into an intersection as soon as the light turns yellow, meaning legally one needs to slam on the brakes and hope for the best. 

just sayin', common sense should sometimes prevail

[Old385]

On 2/14/2020 at 12:06 AM, daveflintstone said:

It's a straight swap, bottled product for bottled product, why bother to contemplate anything additional? 

For reference, driving 1 mile over the posted speed limit is illegal, and where I live it's against the law to drive into an intersection as soon as the light turns yellow, meaning legally one needs to slam on the brakes and hope for the best. 

just sayin', common sense should sometimes prevail

Fair enough sir. I was told since the tax had been paid that it complicated the situation. Love your common sense reference - driving 1 mile over the speed limit won't cause you to lose your license and ability to drive or pay a huge fine. I was reaching out to the expert community to be safe not sorry. Thanks for taking the time to respond. 

[dhdunbar]

You are dealing with several sections of regulation.  Three appear in the consignment sales provisions of the FAA trade practice regulations. 

• §11.37 allows you exchange "A trade buyer's (retailer or wholesaler's)  inventory of a product which has been changed in formula, proof, label or container (subject to §11.46) for equal quantities of the new version of that product. 
• §11.32 allows you exchange products which are unmarketable because of product deterioration, leaking containers, damaged labels or missing or mutilated tamper evident closures may be exchanged for an equal quantity of identical products, or to them for cash or credit against outstanding indebtedness. 
• §11.46 prohibits the return of seasonal products under the guise of a change in label.

Several sections of part 19 apply.  For relabeling:

• §19.453 allows you to return spirits to the bonded premises for relabeling. 
• If you do that, you do not return them to bond, must relabel them as quickly as possible, and remove them immediately and comply with §19.363. 
• It you relabel, you must make the record required by §19./604(b).

For reconditioning;

• §19.452 allows you to return spirits to bond - bring them into the bonded premises, dump them to bulk, and record the receipt as an increase the quantity of spirits you hold in bond. 
• Once returned, you treat them as if they had not been removed, with the following exception
• You may then claim a refund of taxes paid on those spirits (see §19.264 for details about what the claim must contain, etc). 
• If you do not file a claim, you still need to pay taxes when the reconditioned spirits are removed on tax determination.  That is, if you do not file a claim, you pay taxes twice.  If you don't pay taxes on removal, then they are subject to penalty and interest if YYB audits and finds you didn't pay.