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Is owning a separate bar prohibited?

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Can the owner of a distillery also own and operate a bar in another part of town? (not just a satellite tasting room)
Thanks,
JD

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You might want to tell in which state (or which country!) you are... "It depends".

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You're looking for information on tied house laws. Many states make it very difficult to blatantly hold both licenses by the same person, obviously other people have navigated this issue creatively before.

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Federal law allows a producer to own 100% of a retailer.  Less than 100% ownership creates potential tied house violations.  However, there are substantial hurdles to TTB proving a tied house case, for example, need to show that the suppler's acts caused exclusion of products offered for sale by others in interstate commerce.  Those hurdles require time and effort (I know that because I have been there and done that successfully with the likes of major brewers and distillers) and no one in TTB, in their right mind, is going to go fishing for small fry like you when there are giant tunas to be had in major markets.  So you are probably immune from TTB scrutiny.

States are a different matter.  States which have tied house laws, and most have some sort of tied house law, often are not encumbered by things like exclusion.  Some are - in Washington they must show undue influence, whatever that may mean.  But were a state is not encumbered, the prohibition is often absolute. 

Now, as to creative navigation - states will likely have a different name for it.  Try "fraud" on for size.  You don't want to piss off state licensing authorities.  It can be expensive, in dollars, time, worry, and licensing problems.  To whit, if Warren Buffet caved to the Texas ABC and stopped selling alcohol in Flying J stops, because Berkshire Hathaway also owns a 20% state in a Mexican brewery, you have to believe there was no creative way through those waters for you.  He had access to all of the top attorneys and lobbyists and elected not to make a fight of it.  If you want to be a craft distiller, don't endanger that by trying to play clever games in waters through which Berkshire Hathaway,  with all of its financial and political resources,  can't find a safe channel.  

My best advise - Go the the state ABC, tell them exactly what you want to do, don't be coy or clever, conceal nothing, and do as they say.  

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Colorado, not allowed.  You can only own one tier of the three tier.  Some licenses have privileges of other tiers, i.e. A manufacturer can sell direct or through distribution, but you can't have ownership in a distributor or retailer.  

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to blufish_dist's  point - the rules vary from state to state and there is not a one of us here, I'll wager dollars to donuts, who can tell the rules in more than a few states.  From my experience I'm aware of what the rules were, at the time of my interest, in maybe five states, but I'd have to check for changes since I looked  and confirm that my understanding is consistent with the way the ABC interprets what is said.   Again, go to the appropriate agency and ask them.

It took me five minutes to find this online in the Missouri Department of Public Safety ATC website:

This three-tier system requires separate licenses for suppliers, wholesalers and retailers, and, with certain limited exceptions, prohibits distillers, winemakers, brewers, wholesalers or their employees from having a financial interest in the retail sale of intoxicating liquor. This three-tier system of distribution of alcoholic beverages protects against tied houses and exclusive outlets, protects against anti-competitive and monopolistic practices, fosters a stable industry, provides an orderly method for the collection of millions of dollars in state excise taxes each year and provides for a system of sound liquor control.

I didn't go hunting for the certain exceptions.  I'll leave that to you.

 

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Folks,

Many thanks for the responses. In the time since my original post I have come across the following from the Missouri ATC:

No Financial Interest in Retail Business - Distillers, wholesalers, winemakers, brewers or their employees, officers or agents, shall not, under any circumstances, directly or indirectly, have any financial interest in the retail business for sale of intoxicating liquors except a distiller whose manufacturing establishment is located within Missouri may apply for a license to sell intoxicating liquor by the drink in close proximity to the distillery.

https://atc.dps.mo.gov/licensing/liquor_mfgr_solicitor.php

"Close proximity" is not clearly defined anywhere, though.

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Some ambiguity allows for flexibility.  That is not always a bad thing. But when a word means "very near," according to Mr. Webster, and which could have been used alone, but is   nevertheless modified by "close," the authors presumably wanted to modify "very" with, well, "very."  That is,  very,, very near.  Therefore, I suspect that it means something like within the same block. not just within the same city or town.  But I'm guessing, of course.  

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