Shot Gun Marriage: Tennessee Department of Revenue Releases Guide for Terminating Your Liquor Wholesaler

By - November 07, 2015 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

Shot gun marriage pretty much sums it up.  For distilleries, wineries and breweries, choosing a wholesaler in Tennessee is like marrying your high school sweat heart.  She may look great when you are in high school, but as you grow older, you have to ask “Did I find the right partner for life.”

Unlike your high school sweat heart, divorce is not really an option for your Tennessee wholesaler.  Tennessee law protects wholesalers and makes terminating the relationship practically impossible.

The Tennessee Department of Revenue recently issued a guideline for terminating a wholesale contract.  Download a copy here Guide.

Wholesale termination reminds us of the J. Geils Band tune:

You love her but she loves him
And he loves somebody else you just can’t win
And so it goes till the day you die
This thing they call love it’s gonna make you cry
I’ve had the blues the reds and the pinks
One thing for sure
Love stinks yeah, yeah
(Love stinks)
In order to start the termination process, a manufacturer has to tell its wholesaler in writing that it wants to terminate the relationship and provide specific reasons why the wholesaler is inadequate. The wholesaler has 30 days to fix the problems.

This is not something any reasonable business person would do. Why tell someone you cannot divorce that you do not like them and tell them why?

We know of no manufacturer that has terminated a wholesaler contract in Tennessee. Although scuffles between manufacturers and wholesalers sometimes result in trading brands, between wholesalers, the brand termination process in Tennessee is heavily weighted in favor of the wholesaler.

How to Answer Question 15 About Infusing vs. Pre-Mixing Cocktails on the Tennessee Alcoholic Beverage Commission Renewal Application

By - November 04, 2015 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

We are hearing from lots of folks that are confused about Tennessee ABC  infused cocktail policies.  The TABC has added a question to the liquor-by-the-drink application about infusing, which must be filled out by every license holder at renewal.

Question 15 asks: “Do you intend at any point during the next license year to produce, store, sell or offer for sale infusions as that term is defined in T.C.A. §57-4-108?”  The renewal application is here LBD Renewal.

Tennessee has special rules about infusions, which we blogged about here.  In our humble opinion, the Tennessee infusion law is not overly burdensome.  But the rules for what constitutes an infusion and the potential penalties for failing to comply create concern in the industry.

We blogged about the difference between pre-mixed cocktails and infusions and some common sense practices here.  Based on citations issued by agents, we strongly encourage that restaurants and bars follow our advice about pre-mixed cocktails.

We thank ABC Assistant Director Ginna Winfree for advocating for different treatment of pre-mixed cocktails and infusions.  Although the legal technicalities may make little sense to anyone other than lawyers, there is an important distinction.

Conjures up the classic Beastie Boys tune “Brass Monkey”

When it’s time to get ill I pour it on my face

Monkey tastes def when you pour it on ice

Come on y’all it’s time to get nice.”

We find that many licensing professionals think they serve infusions, when in fact they only serve pre-mixed cocktails.  Our advice for answering Question 15 for restaurants and bars that serve pre-mixed cocktails is to answer “no, see attached” and disclose on the attachment that the restaurant has pre-mixed cocktails.  We also advise labeling pre-mixed cocktails as we describe here.

Given TABC patterns of enforcement and significant penalties, erring on the side of disclosure is a good thing.

A Modest Goal: Parity for Distilleries under Tennessee Law

By - November 01, 2015 | Alcoholic Beverage Law, Wigs Manager | Email Will Cheek

We sense that many distillers want to see Tennessee law changed to give distillers similar rights to wineries and breweries.  We keep hearing the word “parity.”  It is not fair for breweries and wineries to have more privileges than distilleries under Tennessee law.

Many, including us, think there is a bias against laws governing spirits because of a long-held and incorrect presumption that whiskey is more dangerous than wine and beer.  Our college days taught us that you can get just as smashed on Miller Lite as on shots of Jose Cuervo.

Jack Daniels Master Distiller Jeff Arnett captured a key sentiment in this very memorable quote:

“There is no drink of moderation – only the practice of it.”

Another consideration is that laws governing manufacturing of spirits date from the 1930’s.  Beer and wine manufacturing laws are relatively new, and reflect more-modern sentiments that generally accept alcohol in contemporary society.

Reminds us of the classic Van Halen song “Take Your Whiskey Home”

Well, I think that you’re headed for a whole lot of trouble. 
If you take your whiskey… 
Well, that liquor in the nighttime leaves strange memories.

In our humble opinion, there is no reason for Tennessee state law to give wineries and breweries more rights than bestowed to distilleries.  For example, why can wineries and breweries have a restaurant; but not distilleries?  Why are distillery tasting rooms limited to small samples, without mixers and palate cleansers like crackers and cheese?

We encourage lawmakers to remember who butters the bread in Tennessee.  Distilleries generate huge tax revenue, jobs and tourism for the state.  Jack Daniels gives Tennessee world-wide recognition, more so than country music, Memphis blues or the Tennessee Waltz.  Jack is certainly a premier Tennessee product, taxpayer and employer.

Show whiskey some respect and give the industry parity.