HB2948 - 572R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 44, chapter 9, Arizona Revised Statutes, is amended by adding article 27, to read:

ARTICLE 27. PRICING of covered goods

START_STATUTE44-1383. Definitions

In this article, unless the context otherwise requires:

1. "Actual damages" means the difference in the price paid by a covered retailer or a covered wholesaler as a result of a violation of this article.

2. "Channels of trade" means any distinct and diverse pathway through which covered goods are marketed, distributed and sold to consumers in the united states, including any of the following:

(a) Traditional supermarkets.

(b) Hypermarkets.

(d) CONVENIENCE stores.

(e) Online or e-commerce retailers.

(f) Specialty food stores.

(g) Mass merchandisers.

(h) Wholesale clubs.

(i) Any other retail establishment, platform or entity that engages in the sale of covered goods.

3. "covered goods":

(a) Means either of the following:

(i) Any food or food products for home preparation and consumption.

(ii) Seeds or plants for household garden use to produce food for personal consumption.

(b) Does not include any of the following:

(i) Gasoline.

(ii) Prescription drugs.

(iii) Tobacco products.

(iv) Alcoholic beverages.

4. "covered retailer" means a person that sells covered goods to an end purchaser at one or more physical locations in this state.

5. "Covered supplier" means a person that:

(a) Produces and sells covered goods in this state.

(b) Sells, directly or through a person's agent or any third party, covered goods that are produced or manufactured by the person to covered retailers or covered wholesalers in an aggregate amount that exceeds $6,000,000,000 per year, which is adjusted each year by an amount that is equal to a percentage increase in the consumer price index for all urban consumers that is published by the united states department of labor, bureau of labor statistics.

6. "Covered wholesaler" means a person that purchases covered goods for the purpose of reselling or distributing covered goods to covered retailers in this state.

7. "Dominant covered retailer" means a covered retailer that:

(a) Has annual retail sales of covered goods in an aggregate amount of more than $18,000,000,000, which is adjusted for inflation based on the consumer price index for all urban consumers as published by the United States department of Labor, bureau of labor statistics.

(b) Has at least one storefront or distribution center that is located in at least twenty-one states, including this state.

8. "Person" includes both of the following:

(a) Each entity that a person owns or controls, in whole or in part.

(b) Each entity that controls the person, in whole or in part.

9. "Same covered goods" means, with respect to two different covered goods, a covered good and any other covered good sold under the same brand that differs only in quantity or packaging.

10. "Same terms of sale" means, with respect to two different agreements, terms of sale that are identical on a per unit basis, excluding shipping and delivery costs, that may vary on account of distance, speed or the method of shipping and delivery or availability of self-distribution.

11. "Terms of sale" means all substantive terms and conditions of sale that are commonly subject to negotiation and competition, including price, discounts, rebates, delivery terms, payment terms, package size, promotional allowances, marketing devices, merchandising ARRANGEMENTS, terms of distribution and any other similar terms, considered on a per unit basis as APPROPRIATE.

12. "Volume unit basis" means the base unit of measurement, not exceeding a truckload, by which purchase quantities are measured in purchase agreements between a covered supplier and a covered retailer or covered wholesaler. END_STATUTE

START_STATUTE44-1383.01 Covered suppliers; covered goods; pricing; requirements; attorney general

A. A covered supplier or a covered supplier's agent:

1. Shall:

(a) Extend the same terms of sale for covered goods to all covered retailers and covered wholesalers that purchase the covered goods for the same volume unit basis sold.

(b) Within fourteen business days after receipt of a written request from a covered retailer or covered wholesaler that purchased covered goods or received an offer that includes the terms of sale for the covered goods, provide anonymized data for the covered goods that were purchased at the same volume unit basis during the previous one hundred eighty days before the purchase was made. For the purposes of this subdivision, "anonymized data":

(i) Means aggregated and deidentified data about the sales transactions.

(ii) Includes the terms of sale for each transaction.

(iii) Does not include a consumer's personally identifiable information.

2. May not refuse to sell covered goods to a covered retailer or covered wholesaler if:

(a) The covered supplier or the covered supplier's agent charges a different price to a covered retailer or covered wholesaler based on the channels of trade or for any other similar reason that is in violation of this article. For the purposes of this subdivision, "Different price" Means a difference in price that is based on either of the following calculations:

(i) The actual difference in price based on the quantity sold to a covered retailer or covered wholesaler.

(ii) The price difference in price based on the terms of sale of a product and is adjusted for difference in payment schedules or credit terms by applying a time value of money calculation and is then multiplied by the quantity sold.

(b) The covered retailer is not a dominant covered retailer.

(c) The covered retailer or covered wholesaler has made payments on or has completed payment to the covered supplier or the covered supplier's agent within the previous twelve months.

(d) The covered retailer or covered wholesaler made a request to the covered supplier to provide to same terms of sale to other covered retailers or COVERED wholesalers.

(e) Selling covered goods that have no commercially reasonable justification.

B. A dominant covered retailer or the dominant covered retailer's purchasing agent may not impose or require terms of sale on a covered supplier if the dominant covered retailer knows or reasonably should know that:

1. The dominant covered retailer or the dominant covered retailer's purchasing agent will acquire more of the covered goods than the dominant covered retailer can sell between the regular purchase intervals.

2. the dominant covered retailer Will or intends to coerce or induce a covered supplier to violate this article.

C. A person is not liable for a violation of this article if the person can show by a preponderance of the evidence that:

1. Any difference in the terms of sale was predominantly attributable to a covered retailer that engaged in self-distribution of the covered goods or lowered the overall costs through efficiencies in distribution or manufacturing.

2. A covered retailer voluntarily accepted the terms of sale for covered goods that were not the same terms of sale for another covered retailer in exchange for consideration. For the purposes of this paragraph, "voluntarily accepted" means acceptance that was not done under coercion or duress or as a pretext.

3. The terms of sale applied only to cases in which there:

(a) Was an actual or imminent deterioration of perishable covered goods.

(b) was an Obsolescence of seasonal covered goods.

(d) were Sales made in good faith if a business was closing or the covered goods were discontinued.

D. a covered supplier is not liable for a violation of this article if the covered supplier can show by a preponderance of the evidence that:

1. The violation was imposed on or required of the covered supplier by a dominant covered retailer.

2. The covered supplier would have suffered substantial harm to its business if it refused the demand of the dominant covered retailer.

3. The covered supplier made a good faith effort to disclose the dominant covered retailer's conduct to the attorney general.

E. An act or practice in violation of this article constitutes an unlawful practice under section 44-1522. The attorney general may investigate and take appropriate action pursuant to chapter 10, article 7 of this title.

F. The attorney general or a person injured by a violation of this article may file suit to:

1. Obtain an injunction to cure a violation of this section.

2. Obtain a civil penalty in the amount of not more than three times the actual damages. END_STATUTE

Sec. 2. Short title

Title 44, chapter 9, article 27, Arizona Revised Statutes, as added by this act, may be cited as the "Consumer Grocery Pricing Fairness Act".