prohibited. "Subliminal or similar techniques," as used in this part, refers to any device or technique that is used to convey, or attempts to convey, a message to a person by means of images or sounds of a very brief nature that cannot be perceived at a normal level of awareness.

[T.D. 7020, 34 FR 20337, Dec. 30, 1969, as amended by T.D. ATF-180, 49 FR 31674, Aug. 8, 1984]

$5.66 Comparative advertising.

(a) General. Comparative advertising shall not be disparaging of a competitor's product.

(b) Taste tests. (1) Taste test results may be used in advertisements comparing competitors' products unless they are disparaging, deceptive, or likely to mislead the consumer.

(2) The taste test procedure used shall meet scientifically accepted procedures. An example of a scientifically accepted procedure is outlined in the Manual on Sensory Testing Methods, ASTM Special Technical Publication 434, published by the American Society for Testing and Materials, 1916 Race Street, Philadelphia, Pennsylvania 19103, ASTM, 1968, Library of Congress Catalog Card Number 68-15545.

(3) A statement shall appear in the advertisement providing the name and address of the testing administrator. [T.D. ATF-180, 49 FR 31674, Aug. 8, 1984]

PART 6-"TIED-HOUSE"

Subpart A-Scope of Regulations

6.85 Retailer advertising specialties.

AUTHORITY: 49 Stat. 981, as amended (27 U.S.C. 205); 44 U.S.C. 3504(h).

SOURCE: T.D. ATF-74, 45 FR 63251, Sept. 23, 1980, unless otherwise noted.

Subpart A-Scope of Regulations $6.1 General.

The regulations in this part, issued pursuant to section 5 of the Federal Alcohol Administration Act (27 U.S.C. 205), specify practices which are prohibited by subsection (b), “Tied-house”, and provide the exception to these prohibitions. This part does not attempt to enumerate all of the practices prohibited by section 5(b) of the Act. Nothing in this part shall operate to exempt any person from the requirements of any State law or regulation.

$6.2 Territorial extent.

This part applies to the several States of the United States, the District of Columbia, and Puerto Rico.

$6.3 Application.

(a) General. This part applies only to transactions between industry members and retailers. It does not apply to transactions between two industry members (for example, between a producer and a wholesaler), or to transactions between an industry member and a retailer wholly owned by that industry member.

(b) Transaction involving State agencies. The regulations in this part apply only to transactions between industry members and State agencies operating as retailers as defined in this part. The regulations do not apply to State agencies with regard to their wholesale dealings with retailers.

$6.4 Jurisdictional limits.

(a) General. The regulations in this part apply where:

(1) The industry member induces a retailer to purchase distilled spirits, wine, or malt beverages from such industry member to the exclusion in whole or in part of products sold or offered for sale by other persons in interstate or foreign commerce; and

(2) If: (i) The inducement is made in the course of interstate or foreign commerce; or

(ii) The industry member engages in the practice of using an inducement to such an extent as substantially to restrain or prevent transactions in interstate or foreign commerce in any such products; or

(iii) The direct effect of the inducement is to prevent, deter, hinder or restrict other persons from selling or offering for sale any such products to such retailer in interstate or foreign commerce.

(b) Malt beverages. In the case of malt beverages, this part applies to transactions between a retailer in any State and a brewer, importer, or wholesaler of malt beverages inside or outside such State only to the extent that the law of such State imposes requirements similar to the requirements of section 5(b) of the Federal Alcohol Administration Act (27 U.S.C. 205(b)), with respect to similar transactions between a retailer in such State and a brewer, importer, or wholesaler or malt beverage in such State, as the case may be.

Subpart B-Definitions

§6.11 Meaning of terms.

As used in this part, unless the context otherwise requires, terms have the meanings given in this section. Any other term defined in the Federal Alcohol Administration Act and used in this part shall have the meaning assigned to it by that Act.

Act. The Federal Alcohol Administration Act.

Equipment. All functional items such as tap boxes, glassware, pouring racks, and similar items used in the conduct of a retailer's business.

Industry member. Any person engaged in business as a distiller, brewer, rectifier, blender, or other producer, or as an importer or wholesaler, of distilled spirits, wine or malt beverages, or as a bottler, or warehousemen and bottler, of distilled spirits; industry member does not include an agency of a State or political subdivision thereof, or an officer or employee of such agency. Product. Distilled spirits, wine malt beverages, as defined in the Federal Alcohol Administration Act.

or

Retailer. Any person engaged in the sale of distilled spirits, wine or malt

beverages to consumers. A wholesaler who makes incidental retail sales representing less than five percent of the wholesaler's total sales volume for the preceding two-month period shall not be considered a retailer with respect to such incidental sales.

Retailer establishment. Any premises where distilled spirits, wine or malt beverages are sold or offered for sale to consumers, whether for consumption on or off the premises where sold.

Subpart C-Unlawful Inducements GENERAL

$6.21 Application.

Except as provided in Subpart D, it is unlawful for any industry member to induce, directly or indirectly, any retailer to purchase any products from the industry member to the exclusion, in whole or in part, of such products sold or offered for sale by other persons in interstate or foreign commerce by any of the following means:

(a) By acquiring or holding (after the expiration of any license held at the time the FAA Act was enacted) any interest in any license with respect to the premises of the retailer;

(b) By acquiring any interest in the real or personal property owned, occupied, or used by the retailer in the conduct of his business;

(c) By furnishing, giving, renting, lending, or selling to the retailer, any equipment, fixtures, signs, supplies, money, services or other thing of value, subject to the exceptions contained in Subpart D;

(d) By paying or crediting the retailer for any advertising, display, or

distribution service;

(e) By guaranteeing any loan or the repayment of any financial obligation of the retailer;

(f) By extending to the retailer credit for a period in excess of the credit period usual and customary to the industry for the particular class of transactions as prescribed in §6.65; or

(g) By requiring the retailer to take and dispose of a certain quota of any such products.

INTEREST IN RETAIL LICENSE

§ 6.25 General.

Industry members are prohibited from inducing the purchases of a retailer by acquiring or holding any interest in any license (State, county or municipal) with respect to the premises of a retailer.

§6.26 Indirect interest.

Industry member interest in retail licenses includes any interest acquired by corporate officials, partners, employees or other representatives of the industry member. Any interest in a retail license acquired by a separate corporation in which the industry member or its officials, hold ownership or are otherwise affiliated, is an interest in a retail license.

$6.27 Proprietary interest.

(a) Complete ownership. Outright own ership of a retail business by an industry member is not prohibited.

(b) Partial ownership. Less than complete ownership of a retail business by an industry member constitutes an interest in a retail license within the meaning of the Act.

INTEREST IN RETAIL PROPERTY

§ 6.31 General.

Industry members are prohibited from inducing the purchases of retailers by acquiring an interest in real or personal property owned, occupied, or used by the retailer in the conduct of the business.

$6.32 Indirect interest.

Industry member interest in retail property includes any interest acquired by corporate officials, partners, employees or other representatives of the industry member. Any interest in retail property acquired by a separate corporation in which the industry member or its officials, hold ownership or are otherwise affiliated, is an interest in retail property.

$6.33 Proprietary interest.

(a) Complete ownership. Outright own ership of a retail business by an industry member is not prohibited.

(b) Partial ownership. Less than complete ownership of a retail business by an industry member constitutes an interest in retail property within the meaning of the Act.

$6.34 Mortgages.

The acquisition of a mortgage on a retailer's real or personal property by an industry member constitutes an interest in the retailer's property within the meaning of the Act.

$6.35 Renting display space.

The renting of display space by an industry member at a retail establishment constitutes an interest in the retailer's property within the meaning of the Act.

FURNISHING THINGS OF VALUE

$6.41 General.

Subject to the exceptions listed in Subpart D, industry members are prohibited from inducing the purchases of a retailer by furnishing, giving, renting, lending or selling to the retailer any equipment, fixtures, signs, supplies, money, services or other thing of = value.

$6.42 Indirect inducement through

third party arrangements.

The furnishing, giving, renting, lending or selling of equipment, fixtures, signs, supplies, money, services, or other thing of value by an industry member to a third party, such as a retailer association or display company where the benefits resulting from such thing of value flow to individual retailers, is the indirect furnishing of a thing of value within the meaning of the Act. This section does not prohibit third parties from furnishing, giving, renting, lending, or selling equipment, fixtures, signs, supplies, money, services, or things of value to retailers which industry members may lawfully provide to retailers under Subpart D of this part.

$6.43 Sale of equipment.

A transaction in which equipment is sold to a retailer by an industry member, except as provided in §§6.88 and 6.89, is the selling of equipment within the meaning of the Act regardless of

how sold. Further, the negotiation by an industry member of a special price to a retailer for equipment from an equipment company is the furnishing of a thing of value within the meaning of the Act.

§6.44 Free warehousing.

The furnishing of free warehousing by delaying delivery of distilled spirits, wine, or malt beverages beyond the time that payment for the product is received, or if a retailer is purchasing on credit, delaying final delivery of products beyond the close of the period of time for which credit is lawfully extended, is the furnishing of a service or thing of value within the meaning of the Act.

§6.45 Assistance in acquiring license.

Any assistance (financial, legal, administrative or influential) given the retailer by an industry member in the retailer's acquisition of the retailer's license is the furnishing of a service or thing of value within the meaning of the Act.

§6.46 Outside signs.

(a) Furnished to retailers. The furnishing of outside signs to retailers by an industry member is the furnishing of a thing of value within the meaning of the Act.

(b) Benefiting a retailer. The placement by an industry member of a "billboard" or "spectacular" sign, advertising distilled spirits, wine, or malt beverages, on the wall or roof of a building adjacent to or occupied by a retailer is the furnishing of a thing of value within the meaning of the Act if (1) the sign contains a panel identifying the retailer, or (2) the retailer is compensated, directly or indirectly (through a sign company), in conjunction with the placement of the sign.

§ 6.47 Item intended for consumers.

Except as provided in §§6.87 and 6.93, the furnishing of things of value such as trading stamps, coupons, non-alcoholic mixers, pouring racks, and the like to retailers is the furnishing of a thing of value within the meaning of the Act regardless of whether the industry member intends for the items to

be distributed free of charge to consumers.

PAYING FOR ADVERTISING, DISPLAY OR

DISTRIBUTION SERVICE

§6.51 General.

Industry members are prohibited from inducing the purchases of a retailer by paying or crediting the retailer for any advertising, display or distribution service, whether or not the advertising, display or distribution service received is commensurate with the amount paid by the retailer. $6.52 Cooperative advertising.

An arrangement in which an industry member participates with a retailer in paying for an advertisement placed by the retailer constitutes paying the retailer for advertising within the meaning of the Act.

§6.53 Advertising in ballparks, racetracks, and stadiums.

The purchase, by an industry member, of advertising on signs, scoreboards, programs, scorecards, and the like at ballparks, racetracks or stadiums, from the retail concessionaire constitutes paying the retailer for an advertising service within the meaning of the Act.

§6.54 Advertising in retailer publications.

The purchase, by an industry member, of advertising in a retailer publication for distribution to consumers or the general public constitutes paying the retailer for advertising within the meaning of the Act.

§ 6.55 Display service.

Industry member reimbursements to retailers for setting up product or other displays constitutes paying the retailer for rendering a display service within the meaning of the Act.

§6.56 Renting display space.

A promotion whereby an industry member rents display space at a retail establishment constitutes paying the retailer for rendering a display service within the meaning of the Act.

GUARANTEEING LOANS

§6.61 Guaranteeing loans.

An industry member is prohibited from inducing the purchases of a retailer by guaranteeing any loan or the repayment of any financial obligation of a retailer.

EXTENSION OF CREDIT

$6.65 General.

Industry members are prohibited from inducing the purchases of a retailer by the extension of credit to the retailer for a period of time in excess of 30 days from the date of delivery.

$6.66 Calculation of period.

For the purpose of this part, the period of credit is calculated as the time elapsing between the date of delivery of the product and the date of full legal discharge of the retailer, through the payment of cash or its equivalent, from all indebtedness arising from the transaction.

§6.67 Sales to retailer whose account is in arrears. [Reserved]

QUOTA SALES

$6.71 Quota sales.

An industry member is prohibited from inducing the purchases of a retailer by requiring a retailer to take and dispose of any quota of distilled spirits, wine, or malt beverages.

$6.72 "Tie-in" sales.

A requirement that a retailer purchase one product in order to purchase another is prohibited. This includes combination sales if one or more products may be purchased only in combination with other products and not individually. However, an industry member is not prohibited from selling at a special combination price, two or more kinds or brands of products to a retailer, provided (a) the retailer has the option of purchasing either product at the usual price, and (b) the retailer is not required to purchase any product he or she does not want.