TTB Offers Clarification On Recent Tied-House RulingMarch 17, 2016
After handing down guidance last month related to tied-house laws—in response to queries on Kroger’s plan to allow Southern Wine & Spirits to oversee its shelf displays—the TTB has issued further clarification with a set of frequently asked questions and answers.
The TTB reiterated its stance that industry members may provide to retailers “a recommended shelf plan or shelf schematic, and nothing further,” and may not provide inducements or “things of value.” If a retailer’s “category management” arrangement with an industry member results in the “exclusion of competitor products … such that the retailer’s independence is at risk … the practice would violate the FAA Act,” the agency added.
However, the TTB flagged certain minor exceptions to its “things of value” designation. Exceptions would include “product displays not to exceed $300 per brand; point of sale/consumer advertising items such as posters, coasters, paper napkins, foam scrapers, calendars, ash trays, cork screws, shirts and caps; consumer coupons and direct contests; and consumer tastings and samplings.”
The agency noted that in any potential investigation it will look to “determine if shelf plans or schematics are being provided as mere recommendations,” which are exempted, “or the de facto ultimate plan adopted by the retailer as a result of a unique relationship between it and the submitting industry member,” which would be a violation.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.