What You Need to Know About California AB 2991
by The Ottimate Editorial Team
AB 2991 is Changing the Way Retailers Pay for Alcohol – Here’s How to Stay Compliant
Wholesalers and retailers depend on each other to keep their businesses running smoothly. Whether you’re supplying products or stocking shelves, smooth and timely payment is key to maintaining strong partnerships.
But starting soon, California’s new Assembly Bill 2991 (AB 2991) will change how alcohol payments are handled between wholesalers and retailers across the state. The law aims to increase transparency, improve safety, and enhance efficiency. But it also introduces new requirements that could impact your cash flow and day-to-day operations.
AB 2991 is something every business in the alcohol supply chain needs to understand – and the sooner, the better. Taking the right steps now can help you stay compliant and avoid disruption.
In this post, we’ll break down what AB 2991 means, what changes it brings to current practices, and what retailers need to do now to stay ahead of the curve.
What is AB 2991?
AB 2991, which takes effect on January 1, 2026, introduces new rules governing the payment of alcohol between retailers and wholesalers in the state of California. Specifically, these payments must be made via electronic funds transfers (EFT).
The goal of the law is to streamline payments, reduce disputes, and bring more structure and transparency to alcohol transactions. Additionally, it will enhance driver safety and minimize cash theft.
What does AB 2991 mean for retailers?
If you’re a retailer in the state of California that purchases alcohol, this change will impact the way you do business. Here are a few key things you need to know.
The 30-day payment window applies for EFT
Retailers still have up to 30 days to pay for alcohol deliveries, and the clock starts on the date of delivery. However, payment must be made by EFT; cash and checks are no longer accepted.
Wholesalers initiate the EFT
Under the new law, wholesalers are responsible for initiating the EFT. Initiation of the EFT can mean withdrawal of funds from the retailer’s bank account or generating an invoice for payment.
Retailers must ensure their payment method is set up and ready to go and that their account has sufficient funds available to cover invoices within 30 days. Late or missing payments could lead to non-compliance and disrupted service.
Each party is responsible for their own fees
Wholesalers and retailers are each responsible for covering any fees they may incur related to the electronic payment services. Wholesalers can’t pay for retailers’ fees, nor can retailers pay for wholesalers’ fees.
If a retailer pays via credit card (and the wholesaler allows it), they are responsible for all credit card fees.
There are rules for processor selection
Both the retailer and the wholesaler can agree on a third-party processor. But if no agreement has been reached by July 1, 2025 ,they must use the third-party processor used by the retailer. If the retailer isn’t using a third-party processor by that date, then the wholesaler’s choice prevails.
What retailers can do to get ready
AB 2991 won’t take effect until January 1, 2026, but now is the time to plan for it. By proactively planning, retailers can save time and avoid payment disruptions.
There are a few key things you need to do to be ready:
- Review your payment processes and technology: Make sure you have the right tools and processes in place to support EFT payments within the 30-day window.
- Collaborate with your wholesalers: You need to align on third-party processors, timing, and whether they’ll accept credit cards.
- Anticipate fees: You’re responsible for any EFT or credit card fees you incur. Be sure to have a plan to pay them.
- Get (and stay) organized: Track due dates, processor deadlines, and any system updates you’ll need. With the right tools in place, you can track many of these factors from one central location.
How Ottimate helps retailers comply with AB 2991
Preparing for AB 2991 is important. But it doesn’t mean you need to overhaul your existing payment processes completely.
If you’re already working with Ottimate, we’ve got you covered. Our VendorPay solution makes it easy to make the transition to electronic vendor payments.
Let’s take a closer look at how Ottimate supports a smooth transition and ongoing compliance to AB 2991.
Automates EFT workflows
Ottimate streamlines EFT payments to align with the requirements of AB 2991. This helps ensure all invoices for alcohol are paid correctly and on time, with less time and manual effort from your teams.
Qualifies as a third-party payment processor
Ottimate meets the criteria outlined in AB 2991 as a third-party payment processor, offering businesses a compliant, automated solution for managing vendor payments with efficiency, security, and transparency.
Maintains a complete audit trail
Transparency is a top focus for AB 2991. With Ottimate, you have a detailed audit trail for every alcohol payment, providing both retailers and wholesalers with a clear record of when and how funds were transferred.
Offers flexible credit card options
If your wholesaler accepts credit card payments (and you opt to go that route), Ottimate can handle those transactions and document them appropriately.
Handles exceptions smoothly
System outages, insufficient funds, or other payment issues can happen. Ottimate allows you to document exceptions and maintain compliance even when the unexpected happens.
Ensures proper cost allocation
Under AB 2991, retailers and wholesalers are required to cover their own costs. Ottimate ensures that fees are correctly allocated, eliminating confusion down the road.
Get ready for AB 2991 with Ottimate
AB 2991 goes into effect on January 1, 2026, and the time to prepare is now. Ottimate is here to support you as you make the transition.
If you’re already an Ottimate customer, ask your team about how our VendorPay feature makes it easy to comply with the new EFT requirements.
If you’re not yet using Ottimate, reach out to see how automating your AP processes can save time, reduce risk, and keep you ahead of regulatory changes like AB 2991.