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sailorman9

Who pays for liquor store shelf space?

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Retailer's are paid to give products preferential shelf space and more of it. Who usually pays: is it the manufacturer or the distributor?

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Retailer's are paid to give products preferential shelf space and more of it. Who usually pays: is it the manufacturer or the distributor?

Not for spirits, that breaks tie-in prohibitions.

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Bravo Denver, and I'd hate to leave this record-breaking gem out:

http://www.ttb.gov/newsletters/archives/2011/ttb-newsletter051111-special.html

So, Sailor, the answer to your question is that the retailers will take money from whomever they can get it, regardless of legality. And for financial planning purposes, the aforementioned TTB fine would lead one to believe that one should set aside 1/2 of one's illegal bribe budget for the feds. I suppose that figure could also be looked at as a 100% tax on flagrant violations of the law. Pretty reasonable tax, if you ask me.

Nick

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Given the size and scope of your budget in comparison with big boys, and likely even mid cap suppliers, you are absolutely barking up the wrong tree here. Why would you devalue your brand and at the same time cut out your own margin (which you probably haven't protected enough as is)? Your distributor is taking advantage of your inexperience with programming if they are over pushing pay to play.... Set yourself up for success with distributors who believe in your brand and the value it holds. If the team believes, the team succeeds. If you devalue your brand by supporting it in the market when you shouldn't have to (because your product is not a commodity) why would anyone else respect what you're peddling?

  • Thanks 1

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Unlike most CPG industries, paying for shelf space (slotting fees) is forbidden in bev alcohol.  This also goes for cocktail menus, tap handles, visibility, etc...

It happens, and there are plenty of ways to do it (distributor, supplier, agency, card swipe, etc), but it is highly illegal regardless of who is doing it.  If you find yourself in this situation, move on to the next retailer.

Every year someone gets a massive fine and the TTB doesn't care if you're craft or global.

 

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To add to the complexity of this issue, each state regulates the three tiers (alcohol production/import , distribution and retail) differently. And there has been a lot of deregulation to let smaller players into the market so the barriers are dropping in limited ways. In virginia a "limited" distillery can act in all three tiers for their own products in limited ways.

 

 

https://en.wikipedia.org/wiki/Three-tier_system_(alcohol_distribution)

 

 

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TTB just announced they are working with the ILCC in major Illinois cities to investigate "pay-to-play" schemes for spirits.

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