The Federal and State liquor control agencies regulate the sales and marketing practices of the alcoholic beverages industry. The corresponding regulations are based in the tied-house laws, which separate suppliers and wholesalers generally, from having a cross-over controlling or financial interest (or tied-house) in a retail licensee (both on and off-premise). This framework, known as the 3-tier system, is rooted in post-Prohibition legislative measures aimed at stemming anti-competitive conduct that was rampant before Prohibition. It is designed to protect consumers by ensuring a more competitive marketplace. See Laws and Regulations for more information [insert link].
Among the various trade practices that are regulated by these agencies, the following are examples:
- Authorized gifts and services, including consumer and retailer ad specialties (e.g., bar mats, napkins, key chains, t-shirts, etc.), product displays and point of sale materials, signage, consumer tastings and trade industry sampling, etc.;
- Online (social) media and traditional advertising;
- Solicitation of products by supplier and wholesaler representatives to retail licensees;
- Product price scheduling and applicable discounting;
- Credit terms and delinquency reporting; and
- Record-keeping requirements.
In addition, the regulations also cover interaction among the tiers such as outlet, commercial bribery, and consignment selling.
Buchman Law Firm, LLP reviews sales and marketing programming of this nature and provides counsel for our clients as to trade compliance and related matters. We conduct training seminars for industry sales staff and other personnel, and prepare extensive trade practice guidelines for use in the field. We also advise as to record-keeping and related requirements, as this is of key importance to evidencing compliance. In cases of federal or state inquiry about trade activities, we are engaged to dialogue with the relevant agencies and diligently represent our client’s interests. Should the inquiry result in a government claim or accusation of violation and the circumstances warrant it, we will work toward a negotiated settlement to resolve the matter.