The Tax and Trade Bureau’s (TTB) definition of a “tied house” is a practice whereby an industry member induces a retailer to purchase its alcohol beverages.
Federal Alcohol Administration Act Provision
27 United States Code, Chapter 8, Subchapter I, Section 205
(b) “Tied house“
[It shall be unlawful …] To induce through any of the following means, any retailer, engaged in the sale of distilled spirits, wine, or malt beverages, to purchase any such products from such person to the exclusion in whole or in part of distilled spirits, wine, or malt beverages sold or offered for sale by other persons in interstate or foreign commerce, if such inducement is made in the course of interstate or foreign commerce, or if such person engages in the practice of using such means, or any of them, to such an extent as substantially to restrain or prevent transactions in interstate or foreign commerce in any such products, or if the direct effect of such inducement is to prevent, deter, hinder, or restrict other persons from selling or offering for sale any such products to such retailer in interstate or foreign commerce:
(1) By acquiring or holding (after the expiration of any existing license) any interest in any license with respect to the premises of the retailer; or
(2) by acquiring any interest in real or personal property owned, occupied, or used by the retailer in the conduct of his business; or
(3) by furnishing, giving, renting, lending, or selling to the retailer, any equipment, fixtures, signs, supplies, money, services, or other thing of value, subject to such exceptions as the Secretary of the Treasury shall by regulation prescribe, having due regard for public health, the quantity and value of articles involved, established trade customs not contrary to the public interest and the purposes of this subsection; or
(4) by paying or crediting the retailer for any advertising, display, or distribution service; or
(5) by guaranteeing any loan or the repayment of any financial obligation of the retailer; or
(6) by extending to the retailer credit for a period in excess of the credit period usual and customary to the industry for the particular class of transactions, as ascertained by the Secretary of the Treasury and prescribed by regulations by him; or
(7) by requiring the retailer to take and dispose of a certain quota of any of such products.
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