UNLAWFUL TRADE PRACTICES AT BALLPARKS, RACETRACKS AND STADIUMS
Proprietors of Distilled Spirits Plants, Bonded Wine Cellars,
Taxpaid Wine Bottling Houses; Brewers, Importers, Whole-
sale Malt Liquor Dealers, Wholesale Liquor Dealers and
Others Concerned:
It has come to the Bureau's attention that certain industry
members, primarily brewers and wholesale malt liquor dealers, are
engaging in activities in violation of the Federal Alcohol Admin-
istration Act at ballparks, racetracks, stadiums, etc.
Section 5(a) of the Federal Alcohol Administration Act makes
it unlawful, under the jurisdictional limitations set forth, for
an industry member to require, by agreement or otherwise, directly
or indirectly, or through an affiliate, that any retailer engaged
in the sale of distilled spirits, wine, or malt beverages, purchase
any such products to the exclusion in whole or in part of products
sold or offered for sale by other industry members in interstate
or foreign commerce.
Section 5(b) of the Act makes it unlawful, under the juris-
dictional limitations set forth, for an industry member, directly
or indirectly or through an affiliate, to induce any retailer
engaged in the sale of distilled spirits, wine, or malt beverages
to purchase any such products from such person to the exclusion
in whole or in part of products sold or offered for sale by other
persons in interstate or foreign commerce by, among other things,
furnishing, giving, renting, lending, or selling to the retailer
any equipment, fixtures, signs, supplies, money, services, or
other thing of value; or by paying or crediting the retailer for
any advertising, display, or distribution service; or by requiring
the retailer to take and dispose of a certain quota of any such
products.
Recent inspections disclosed that violations have resulted
from brewers, wholesalers, etc., engaging in activities similar
in nature to the following:
(1) An industry member contracts or deals directly with
a concessionaire (retailer). The industry member pays for signs, advertising in scorecards, on scoreboards and fences,
or, provides the concessionaire with equipment, services, or
other things of value.
(2) An industry member sponsors a ballclub which also
operates the concessions. In this instance the ballclub
is also the retailer. Usually, sponsorship or support
consists of such things as buying season tickets, paying
for advertising as described above, or providing other
things of value such as renting and lending draft equip-
ment or coolers.
(3) The industry member enters into a contractual agree-
ment or other arrangement with a third party. The third
party, a ballclub, or municipal or private corporation,
not acting as a retailer, leases the concession rights but
maintains control over the purchasing operations of the
retailer. The business arrangements entered into between
the industry member and the third party may consist of such
things as sponsoring radio or television broadcasting, pay-
ing for advertising, or providing other services or things
of value. The third party, in consideration of the above,
requires the retailer to purchase the industry member's
products either exclusively or on a specified percentage
basis.
The Bureau intends no interference with sporting or athletic
sponsorship as long as the entity receiving such support is not a
retailer, or is not in control of a retailer's purchasing operations.
Likewise, the Bureau recognizes the benefits of selling at a stadium
the products of the industry member sponsoring a ballclub, event,
etc., and will therefore not object to such practice unless it is
determined that purchases by the retailer are conditioned specifi-
cally on such sponsorship, or on payments, gifts, or services
provided to either a third party or the retailer.
Industry members entering into arrangements similar to those
described herein are cautioned that if such sponsorship, support, or
the providing of services or other things of value, directly or in-
directly, result in exclusion in whole or in part of distilled
spirits, wine, or malt beverages sold or offered for sale by other
persons in interstate or foreign commerce, and in the case of malt
beverages if the state imposes similar requirements, a violation of
the Act would ensue.
Inquiries. Inquiries concerning this circular should refer
to its number and be addressed to the Assistant Director, Regula-
tory Enforcement, Bureau of Alcohol, Tobacco and Firearms, 1200
Pennsylvania Avenue, N.W., Washington, D.C. 20226.

Rex D. Davis
Director |