The Alcohol and Tobacco Tax and Trade Bureau (TTB) has accepted an $850,000 compromise from RN Acquisition (dba Lakeshore Beverage) and City Beverage – Markham of Chicago and Arlington Heights, Ill., to settle tied house allegations. Specifically, TTB alleges that these entities and/or their affiliates unlawfully:
- Violated the Federal Alcohol Administration (FAA) Act’s tied house prohibition (27 U.S.C. § 205(b)), by inducing a retailer to purchase their malt beverages to the exclusion of competitor brands by paying sponsorship funds to a third-party concert promotion company commonly owned and/or managed by the retailer’s owner and/or manager;
- Violated the FAA Act’s tied house and exclusive outlet (27 U.S.C. § 205(a)) prohibitions by paying or reimbursing another industry member as part of a scheme to induce a multi-purpose venue retail concessionaire to purchase their malt beverages to the exclusion of competitor brands through a sponsorship of the venue, and by providing various trade items to the retail concessionaire;
- Violated the FAA Act’s tied house prohibition by providing various trade items to a retailer at below-market value, which induced the retailer to purchase the their malt beverages to the exclusion of competitor brands; and
- Violated 27 U.S.C. § 203(c), by operating without a basic permit at one of its warehouses.
If you have questions regarding prohibited trade practices, head to the TTB Trade Practices page for additional information about the laws and regulations.