It’s Wednesday, so of course I start my day by heading to YouTube and checking out the latest episode of NWA Powerrr. But before I get there, I see the Alcohol Tax and Trade Bureau has uploaded some handy educational videos covering the basics of trade practices for the alcohol industry. The five-part series explains the history of the trade practices rules, defines them and digs into examples of prohibited practices.
These videos are solid refreshers for understanding the gray areas of 27 U.S.C. and 27 CFR, even if the videos themselves seem less than fresh (they have hilarious images of DVD and/or CD-ROMS at the start, making me assume these were dusted off some shelf and finally uploaded to YouTube the other day – also might be why I saw them on my way to watch NWA Powerrr.)
Anyway, here are two of our favorites:
This one gets into the tied house regulations and defines the sevens means to induce, which are:
1. Acquiring or holding an interest in a retailer’s license. This means an industry member (producer or distributor) owning a percentage of the retail business. Owning a retailer outright is A-OK.
2. Acquiring an interest in real estate or personal property of a retailer’s business. Like an industry member acquiring the mortgage on a retailer’s building.
3. Giving, renting, lending or selling things of value to a retailer. TBB has a number of exceptions to this, and those are explained in the video.
4. Paying or crediting a retailer for advertising, display or distribution services.
5. Guaranteeing a loan or repaying a retailer’s financial obligation.
6. Extending credit to a retailer beyond 30 days from the date of delivery.
7. Requiring a retailer to take and dispose of a certain quota of beverages. An example being requiring a retailer to purchase one product in order to purchase an allocated product (tie-in sales)
It is unlawful for an industry member to require a retailer to purchase alcohol beverages from that member to the exclusion of other sellers – or, if the practices substantially restrains or if the direct effect of such requirement is to prevent or restrict others from selling such products.
The difference between an exclusive outlet and a tied house is in the requirement to buy. Tied house covers inducements to buy.
Check the whole series out right here.