TTB Extends Trade Practice Comment Period

Alcohol & Tobacco Tax & Trade Bureau said it was extending until July 7 the opportunity for industry members and others to comment on whether TTB should proceed with regulatory initiatives concerning exclusive outlet, tied house, commercial bribery and consignment sales regulations. To view the proposal and submit comments electronically use the comment form for Notice No. 216 posted at Regulations.gov.

TTB extended the comment period at the request of eight major industry trade associations representing all tiers. The Brewers Association opposed the extension saying the nearly seven-month comment period provided ample time for interested parties to comment on the advance notice of proposed rulemaking.

 The eight associations said many questions posed by TTB "are complex and involve detailed analysis of the Bureau's current regulatory landscape for trade practices; the implications of a recent U.S. Supreme Court action allowing an appeal in a case regarding "whether and when statutory silence concerning powers expressly but narrowly granted by statute constitutes an ambiguity requiring deference to the agency in rulemaking," and the fact that industry members "must focus their limited time and resouces on sales and other urgent business needs" during the summer selling season.|

Thus far, 64 comments have been received.  One alleges that "pay for play" is a part of Southern Glazer's Wine & Spirits culture "and their suppliers eagerly and knowing participate in these activities blatanly." Many of the restaurants in high profile cities "sell portions of their it's to the highest bidder.  Decent distributors can be forced into unsavory practices just to compete."

The owner of a craft distillery says he has seen "first hand how large national/international liquor brands exert control over the increasingly consolidated distribution network by incentivizing distributors to ignore or drop smallter craft brands.  The relationship between large brands and distributors is an effective monopoly, shutting out smaller competitors not due to quality or price but to lack of access to potential customers."  The commenter said "one obvious solution is to allow craft distilleries to act as their own distributors."

A brewery owner said the regulations were "outdated, post-prohibition laws" that "stifle small business owners by allowing big distributors to dominate the market and prevent access by smaller players in the craft beer industry.'

One comment consisted solely of a question:  "How is it fair that Distributors (and Retailers) are allowed to OWN liquor brands and also distribute/sell those brands and competing brands in the same market – yet at the same time they fight any efforts for independent producers to be able to ship direct to consumers?"