Records you never knew you were supposed to keep to avoid violation of Tied House provisions under the Federal Alcohol Administration Act (FAA) as a producer.

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Blog 11, 38, and 39

A violation of the FAA occurs where a producer of alcohol unlawfully induces a retailer to buy its products to the exclusion of products sold by others. In its most straight forward analysis, an example would be a large brewer that refuses to allow a bar owner to have their beer on tap unless they do not carry certain other beers. The difficulty with tied house rules is that there are many ways that a member of the industry, be it a producer, distributor or retailer, may unknowingly violate the provisions and not even realize that a violation has occurred.

Subject to exceptions in the FAA and its regulations, a producer of alcohol may not furnish, give, rent, lend, or sell to the retailer any equipment, fixtures, signs, supplies, money, services or other thing of value. How can that be? We all see signs from producers along with other point of sale advertising and consumer advertising of the producer at the retailer. This is because there is a set of rules designed to be exceptions to this blanket violation. Those exceptions include, for example, that the producer may give or sell to the retailer point of sale advertising designed to be used at the retailer to attract consumer attention. Think of posters, signs, coasters, napkins, clocks, etc. The producer may also sell or give to the retailer equipment or supplies that include glassware (and similar containers), dispensing accessories, carbon dioxide, or ice.

Additionally, a producer may furnish or give samples of distilled spirits, wine, or malt beverages to a retailer who has not purchased the brand from the producer within the last 12 months. Finally, a producer may furnish consumer coupons if all retailers within the market where the coupon is offered may redeem the coupon, and further providing that the retailer is only reimbursed for the face value of the coupon plus usual and customary handling fees.

These key exceptions to the tied house rules are defined in the regulations. Careful monitoring is important. It is critical to note that without proper recordkeeping by the producer, the exception to the tied house rules for the above is lost and the transaction will be deemed to constitute a means to induce another tier of the industry and thus a violation of the tied house rules under the FAA and its regulatory scheme.

Each producer must keep the following records on the production premises for a three year period. Commercial records or invoices may be used to satisfy this requirement if all of the below is referenced on that record:

  • The name and address of the retailer receiving the item
  • The date furnished
  • The item furnished
  • The industry member’s cost of the item furnished, and
  • The charges to the retailer for any item

If you have question about any of your obligations under the FAA and its tied house provisions as a distiller, brewer, wine producer, importer, wholesaler or bottler, feel free to contact our office.

We're Here to Help

Dear friends in the alcoholic beverage industry,

As we as an industry, nation and planet collectively try to navigate this unprecedented period the coronavirus has brought us, We’d like you to know that we at Craft Beverage Consultants (the other CBC!) are here to answer any question you may have (or not know you have) about not just surviving this time but positioning yourself to thrive as soon as social distancing measures allow your business to function at full capacity again.

If you schedule a free 60-minute phone or video conferencing consultation with me or any of my 11 highly specialized colleagues, we’ll help you figure out any of your immediate and/or longterm business needs, or “everything but the staffing,” as we like to say. We’re not high-pressure sales kind of people, especially these days, so you don’t have to worry about fending off annoying pitches. Make an appointment on our website or Facebook page, or just call us the old-fashioned way at 314-768-0220.

Our experts have a combined 150 years in the alcoholic beverage industry, with deep knowledge in everything from sales and distribution, production, and regulatory compliance to marketing, package design, event planning, IT, (social) media, hospitality, and even values-based executive coaching. 

For example, we can coach you through this season when chain accounts have canceled their spring, in some cases, fall resets and distributors have drastically cut orders. Our director of business strategy and compliance can save you money – now – on excise taxes, caution you to avoid naming your beers in ways that risk alienating your buyers (Wuhan Wheat? Coronavirus Cream Ale? Groan. No.), and secure TTB approval for the tastefully named beers you do make. Our creative director and web team can get your e-commerce site up and running and launch a social media campaign that keeps you top of mind for current and future customers. Our director of storytelling can put you in front of the press so you can tell your story to your community. 

Once you’re ready, we can look forward together. Now is the time to talk about post-virus. We all suspect the legal landscape to look different. But how? And how do you prepare yourself in a way that positions you to charge out of the gate ready to maximize the potential and profit of whatever the “new normal” turns out to be? Please get in touch so we can talk about it. 

CBC’s roster includes local and regional clients like Epic Brewing, Logboat Brewing, Piney River Brewing, SudWerk Brewing, Waves Cider and Common Cider Company, just to name a few.  The agency was founded in 2004 by Jacob and Beth Halls, formerly known as Convergence Consulting; Rick Laxague, joined as a partner in charge of sales, marketing and distribution consulting in 2019. 

Rick hase close to 20 years of experience, a bulk of which was with Crescent Crown Distributing in Arizona. His last role there was Area Sales Manager for the dedicated craft beer division, coaching and leading a sales team to be nationally recognized. In early 2014 Rick helped take a regional brewery national as their Director of National Accounts and increase that segment of their business from 30,000 cases to almost 300,000 cases in two years, an increase that equates to $4.8 million in IRI dollar sales. 

Co-founder Jacob Halls brings 17 years of experience in regulatory compliance, business strategy, marketing and craft brand management to the company. In his former position as craft brand manager for the N.H. Scheppers Distributing Company in Columbia, Missouri, Jacob helped lead his team to winning the 2016 Distributor of the Year award from New Belgium and to a nomination for the Brewers Association’s Distributor of the Year award. Jacob is also the founder and director of the South East Craft Beer Fest and several other industry specific charitable event marketing festivities. Beth Halls is Director of Business Operations and Coordinator of Charity Operations for the festivals and events run by CBC, such as the South East Craft Beer Fest, MO Bacon & Bourbon, and many more. 

Again, please reach out to us for anything.  CBC can be reached at (314) 768-0220 or at

We look forward to meeting/talking soon.


Rick Laxague, Jacob Halls, and Beth Halls