excuse is lack of knowledge and training. This systemic ignorance, be it willful or just negligent, can leave industry members facing hefty fines, suspensions, revocation and truly negative publicity that can cripple an ongoing business. The TTB has responsibly sought to guide the industry through enforcement activity and even post-enforcement policy notices. Unfortunately, in each case, little is said about either pre-or post-enforcement compliance measures taken to prevent future violations. While media focuses on the alleged wrongdoing, more attention should be given publicly and internally to education and compliance practices that can help industry members prevent violations but also benefit from exemptions to tied house laws. For example, there are stand-out red flag practices such as the following that place both suppliers and retailers at risk of investigation and enforcement actions: Monetary gifts or gifts of other goods of value including equipment, gift cards, tickets, travel or other hospitality; Agreements with an industry member that obligate a retailer to purchase or otherwise promote a specific brand; Industry member involvement in the day-to-day activities or decision making of a retailer; and Discriminatory offers that are not available to all like businesses on the same terms.
However, these general prohibitions are balanced with exemptions that can be explored and negotiated for a legal benefit to all parties. The following are common permissible exemptions, although the application and extent of the exemptions varies by state and industry members should always seek specific guidance from a qualified legal party on any proposed marketing or financial arrangement: Product Displays (shelving, racks, barrels) – Generally, if permissible, must not exceed statutory monetary limitations and must meet specific display requirements; Point-of-Sale and Consumer Advertising Specialty Items (posters, inside signs, clocks, menus) – The permissible use of such items is normally limited in monetary value and quantity, and rules may differ based on type of alcohol product promoted; Educational Seminars/Product Knowledge Training hosted by industry members – These types of events, where permissible, are usually limited in subject matter, location and frequency; Advertisements – Some cooperative advertisements may be permissible where unaffiliated retailers are included. However, such permissibility is again dependent on the specific details of the promotion or advertisement and financially responsible party.
Published on Sep 19, 2017