In the heavily-regulated, three-tiered system that governs America’s alcohol sales, staying on top of all of the protocols can be tricky. Even well-meaning licensees can inadvertently exceed the privileges allowed by their license if they aren’t very careful. One tricky relationship to navigate is that between a distributor and a retail location. The law is pretty clear that distributors are not allowed to provide anything “of value” to a retailer. In theory, such laws minimize the potential for unfair business practices in the industry. In reality, however, they just cause headaches for people in the industry trying to figure out if something is “of value.”

The TTB recently issued a ruling that attempted to clear up one gray area in the “of value” debate—shelf plans and schematics provided by distributors to retailers. Apparently, some distributors had been providing these schematics to retailers in an attempt to get better shelf-position for their products (and therefore, worse shelf-position for their competitor’s products). One distributor even went so far as to provide the schematic to a retailer, and then also provide the labor to implement said schematic.

TTB Ruling 2016–1 clarifies what is allowed and what is prohibited. While a distributor may provide a shelf plan or schematic to a retailer, it is not allowed to do anything further. Prohibited activities include (but are not limited to):

– Providing labor to perform merchandising (other than general stocking and rotation)

– Furnishing a retailer market data from third-party vendors

– Receiving or analyzing (on behalf of the retailer) any confidential and/or proprietary competitor information

– Assuming a retailer’s purchasing or pricing decisions

For the complete ruling, visit https://www.ttb.gov/rulings/2016-1.pdf.


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