Free Booze for Tennessee Retail Package Store Tastings Opens Surprise Can of Worms

By - November 26, 2014 | Alcoholic Beverage Law | Email Will Cheek

As part of the unseemly compromise to pass legislation authorizing the sale of wine in groceries in Tennessee, state law was changed to allow manufacturers to donate product for tastings at retail liquor stores.  We blogged about the new law here.

We have been hearing from reliable sources that some manufacturers are using the tastings law as a conduit to illegally channel free booze to retailers for purchasing product.

Before the Tennessee ABC cracked down on free booze, the industry often gave free booze to a retailer that ordered a certain quantity.  For example, a retailer might get 3 free bottles if it ordered 3 cases.

The TABC cracked down on free booze effective July 1, 2014.

Free booze for tastings gives unscrupulous industry members a way to funnel free product to retailers under the guise of using the product for tastings.

Conjures up Neil Young’s bizarre “Welfare Mothers”

Down at every laundromat in town now
(Welfare mothers make better lovers)
While they’re washin’ you can hear this sound now
(Welfare mothers make better lovers)

We applaud the new law and its goal to allow manufacturers to provide complimentary booze to retailers to help market wine and spirits.  As a business-friendly state, it makes sense.

We strongly support efforts to prevent using the tasting law as a way to avoid the prohibition on free booze.

One idea is to mark free bottles with a label saying that the product is not for sale.  This gives the TABC something to look for in stores.  Another idea is to require wholesalers to break the seal of free product upon delivery to a retailer.  Customers will generally not purchase open stock.

We invite industry members to share tips for ways to short-circuit the use of free tasting product as an illegal incentive for purchases.

New Rule for Renewal of Tennessee Restaurant, Hotel or Other Liquor-By-The-Drink Licenses

By - November 21, 2014 | Alcoholic Beverage Law | Email Will Cheek

The annual liquor license renewal for Tennessee on-premise liquor license holders has been the same for as long as we can remember.  A TABC Agent inspects, tells the license holder it needs to renew and leaves a copy of the renewal paperwork.

A common complaint from corporate license holder was that the renewal application was not forwarded to corporate offices for renewal.  This sometimes caused a last-minute or late rush to renew.

We recently learned that the TABC has changed the procedure for renewals.  TABC agents still inspect before the renewal deadline.  But renewal forms are no longer provided.

TABC agents direct license holders to forms available on line.

We are advising clients to calendar renewals.  Given the recent ABC rule about voiding late renewals, which we covered here, timing for renewals is a potential trap.

Green Day’s bizarre lyrics to Homecoming comes to mind:

Jesus filling out paperwork now
At the facility on East 12th St.
He’s not listening to a word now
He’s in his own world and he’s daydreaming

With a prolonged interruption in service as the penalty for a late renewal, we strongly encourage that renewals be closely monitored and completed on time.

Wine in Grocery Election Popular at Tennessee Polls

By - November 04, 2014 | Alcoholic Beverage Law | Email Will Cheek

Early voting results suggest that Wine in Grocery Stores, which we affectionately call WIGS, is quite popular with the electorate. Based on our unscientific and very amateur view of early election results, approval of WIGS has a commanding lead.

Although WIGS was approved by the state legislature earlier this year, the law requires the citizens of each city or county to vote in favor of allowing WIGS before local grocers can sell wine.  Called local option, it is the process that authorizes each city to allow package stores and restaurants.

We blogged about the list of cities and counties holding WIGs elections here.

Brings to remind the Eagles 1977 super hit “Hotel California:”

Mirrors on the ceiling, the pink champagne on ice
And she said ‘We are all just prisoners here, of our own device’

We see approval of WIGS as being crucial to the competitiveness of grocery stores in large and mid-sized towns.  A city that fails to adopt WIGS puts its grocers at a disadvantage to grocery stores that can sell wine.  Although wine may not be a huge part of revenue for a grocer, losing high end consumers that want to purchase wine while grocery shopping could be a big loss.

Check back in a day or so when we post full election results.