On November 9, 2022, the Tobacco Tax and Trade Bureau (“TTB”) posted an advance notice of rulemaking seeking comment on several trade related practice issues with a particular eye on anti-competitive laws including Federal Alcohol Administration Act’s exclusive outlet, tied house laws, commercial bribery, and consignment sales prohibitions. You can provide your own comments by following this link.
The TTB is seeking comment on these issues in response to President Biden’s July 9, 2021 Executive Order entitled Promoting Competition in the American Economy wherein the President noted the need to update or change laws that prohibit competition or present barriers to the market for smaller breweries. As part of the Executive Order, the Department of Treasury was directed to put together a report, which is titled Competition in the Markets for Beer, Wine, and Spirits and requested comments from the public on the same. Below is a list of the specific topics of interest, all of which involve dealing with levelling the playing field between the largest commercial breweries/distributors and small or microbreweries:
- Category Management
- Shelf Plans
- Slotting Allowances
- Interest in a Retail License or Property
- Third- Party Companies (inducements under Tied House laws)
- Consumer Specialty Items and Point of Sale Advertising Materials
- Tied House Payment Terms
- Consignment Sales Payment Terms Safe Harbor
- Definition of Trade Buyer
- Private Label Arrangements
- Brand Sharing with Retail Establishments
- Sponsorships
- Activities Which Result in Exclusion or Place Retailer Independence at Risk
- Criteria for Risk to Retailer Independence
- Third-Party Contracts
- Sales Competition
If you have any questions regarding any of the issues raised by the Executive Order or the notice posted by the TTB, please do not hesitate to reach out and we encourage you to provide your comments to the notice and make sure your voice is heard. Stay tuned for more content related to this shift in the beverage industry.
