Depletion allowance glossary

38 terms that come up when beer, wine and spirits suppliers reconcile depletion allowances with their distributors, in plain English.

New to the topic? Start with what a depletion allowance is, then the reconciliation guide. Usage varies between companies and markets; when your agreement with a distributor defines a term, that definition wins.

Area manager: A supplier's sales lead for a territory or market, working with the distributors there. At many brands the area manager checks the monthly DA invoices because they know the deals.
Billback: An invoice a distributor sends a supplier for agreed costs the distributor fronted, most often depletion allowances, but also items such as samples. Often used as a synonym for depletion allowance.
Case: The standard selling unit between supplier, distributor and retailer. A case can hold different numbers of units, for example 24 cans or 6 bottles, so the pack matters when comparing lines.
Chargeback: A general term for an amount a distributor charges back to a supplier. Usage varies by company; in practice it often overlaps with billback, so check what your finance team means by it.
Credit memo: A document a supplier issues to settle a billback as a credit against what the distributor owes, instead of a separate payment.
DA: Short for depletion allowance. Also used for the per-case rate itself, as in "a $2.50 DA".
DA export: A file listing a distributor's deal lines from a trade spend platform, used as the checklist for reconciling that distributor's invoice. In Tradeparency it is a CSV with one row per deal line.
DA invoice: The distributor's monthly bill for depletion allowances, usually an Excel file with product, price, DA rate and cases, often one row per account.
DA rate: The dollar amount per case the supplier pays on a deal. Two deals can have rates only a few cents apart, so rate is a key matching field.
Deal: An approved promotion: a product and pack, a price to retailer, a DA rate, and conditions such as a volume tier, channel or date range. Also called a promotion or program.
Deal line: One row in a trade spend platform for a single deal, where the cases sold on that deal are entered.
Depletion: A case leaving the distributor's warehouse for a retailer. Depletions measure sell-through to retail, as opposed to shipments from the supplier into the distributor.
Depletion allowance: A per-case amount a supplier pays a distributor for cases sold to retailers on an approved deal, billed back after the sale. Not the same as the oil and gas depletion allowance in the tax code.
Depletion report: The distributor's sales detail for a period: what sold, to which accounts, at what price. It supports the DA invoice.
Discount rate: The per-case reduction a deal gives the retailer. The supplier's DA may cover all or part of it, depending on the agreement.
Distributor: The licensed middle tier (also called a wholesaler) that buys from suppliers and sells to retailers.
Duplicate deal: The same deal entered twice in a platform, usually with slightly different descriptions. Cases belong on one copy only.
FOB price: The supplier's price to the distributor at the pickup point, before transport, taxes and the distributor's costs are added.
Front line price: The distributor's regular, undiscounted price to retailers. Deal prices are set below it.
Laid-in cost: The distributor's cost for a product once transport, state excise tax and warehousing are added to the FOB price.
Loose cans: Cans sold individually rather than in shelf packs. A case of 24 loose cans is written 24-1 in pack notation.
Net price: The price the retailer actually pays after the deal discount. On many DA invoices this is the price to match against the deal.
Off-premise: Retail accounts that sell closed containers to take away, such as liquor stores, grocery and convenience stores.
On-premise: Accounts where drinks are consumed on site, such as bars and restaurants. Some deals apply only to one channel.
Pack notation: How a case configuration is written. In a Tradeparency export, 355 ML/24-4 means 355 ml containers, 24 per case, in 4-packs; 24-1 is loose and 24-8 is three 8-packs.
Post-off: A published, temporary reduction in the price a wholesaler charges retailers. Some invoices show it as its own column, often labeled P/OFF.
Price to retailer: The per-case price a retailer pays the distributor on a deal. Called PriceToRetailer in a Tradeparency DA export.
Reconciliation: Checking the distributor's DA invoice against the approved deals until the calculated total matches the billed total, or every difference is explained.
Rate difference: Cases billed at a DA rate that differs from the deal's rate. The dollar gap is cases times the difference.
Retailer: The tier that sells to consumers, on-premise or off-premise.
Shipments: Cases the supplier sells into the distributor. Compared with depletions to judge inventory and sell-through.
Supplier: The brand owner: a brewery, winery, distillery or importer. The supplier funds depletion allowances.
Three-tier system: The US structure in which suppliers sell to licensed distributors, distributors sell to licensed retailers, and retailers sell to consumers.
Totals check: Comparing the invoice total with what the platform will calculate and listing what explains the difference. In Depletion Reconciler it lists unplaced invoice rows and rate differences.
Trade spend: What a supplier spends to support sales through the trade, including depletion allowances and other promotional programs.
True-up: An adjustment that reconciles outstanding billbacks against invoices between supplier and distributor.
Variety pack: A pack mixing several flavors. Distributors may split it by flavor on the invoice while the platform holds one variety pack line per price tier.
Volume tier: A deal condition based on quantity, such as "10+" cases. Different tiers usually carry different prices and DA rates.

Sources for several definitions: the Washington State Wine Commission's glossary of wine distribution terms (DA, billback, credit memo, true-up, FOB, laid-in, front line, on- and off-premise), the NBWA's page on the three-tier system, Andavi Solutions on depletion data versus billback data, and state statute definitions of post-off collected by Law Insider.

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