TCA § 57-5-101 — Traffic in alcoholic beverages of less than eight percent (8%) permitted — Brewers' and wholesalers' interests restricted

It is lawful in this state to transport, store, sell, distribute, possess, receive, or manufacture beer, as defined in subsection (b), subject to the privilege taxes and regulations set out and provided for in this part. Except as otherwise provided for in this part, no brewer or manufacturer of beer shall have any financial or ownership interest, direct or indirect, in the business of or a building containing a wholesale or retail licensee, including to furnish or loan any fixtures of any kind to a retail licensee, and no such brewer or manufacturer shall hold a wholesale or retail license. For purposes of this section, an indirect interest includes any interest acquired by affiliates, subsidiaries, corporate officials, partners, or employees of the brewer or manufacturer. Except as otherwise provided for in this part, no wholesaler shall hold any financial or ownership interest, direct or indirect, in the business of or a building containing a brewer, manufacturer, or retail licensee, including to furnish or loan any fixtures of any kind to a retail licensee, and no such wholesaler shall hold a manufacturer or retail license. For purposes of this title, “beer” means beer, ale or other malt beverages, or any other beverages having an alcoholic content of not more than eight percent (8%) by weight, except wine as defined in § 57-3-101; provided, however, that no more than forty-nine percent (49%) of the overall alcoholic content of such beverage may be derived from the addition of flavors and other nonbeverage ingredients containing alcohol. Upon meeting necessary federal, state and local license requirements, notwithstanding the prohibition of subsection (a), a manufacturer: May operate as a retailer at the manufacturer's location or a site contiguous thereto for sales of not more than twenty-five thousand (25,000) barrels of beer or high alcohol content beer or both annually for consumption on or off the premises under this chapter as long as the requirements of this chapter concerning the licensing of such retail establishments are met; and May qualify for and hold a license: Under chapter 4 of this title as a “restaurant” or “limited service restaurant”; provided, that notwithstanding chapter 4 of this title related to restrictions or prohibitions on licensees under chapter 4, a restaurant or limited service restaurant may sell for off-premises consumption beer manufactured pursuant to this section at such location or at any other restaurant or limited service restaurant licensed under chapter 4 that is owned by the same person; or As a hotel as defined under § 57-4-102(21)(F)(iii); provided, that the hotel licensee shall only sell beer manufactured pursuant to this section on the premises of the hotel. A manufacturer operating as a retailer pursuant to subdivision (c)(1)(A) may not sell its beer directly to retailers that are located in a county other than the county in which the manufacturer is located. Notwithstanding any law to the contrary, any transfer or sale by a manufacturer operating as a retailer to an off-site retailer's location shall constitute a wholesale sale. Notwithstanding the prohibitions and restrictions on a manufacturer's financial and ownership interests imposed in subsection (a), a manufacturer may have a financial or ownership interest in a licensed wholesaler's business; provided, however, that the financial or ownership interest in the licensed wholesaler's business is maintained or held only for a one-time period not to exceed five (5) years, which may not be directly or indirectly extended or renewed, and only under the following circumstances and conditions: When a licensed wholesaler is voluntarily selling its distribution rights, and the manufacturer whose brand distribution rights are being sold seeks to assist the sale by taking a noncontrolling financial interest in the purchasing wholesaler in the form of a loan made contemporaneous with the sale and secured by the inventory and assets, except for the corporate stock, of the purchasing wholesaler; or When, only for reasons permitted under § 57-5-505, § 57-5-506, or § 57-5-507, a distribution agreement between a manufacturer and a wholesaler is not renewed or is otherwise terminated, cancelled, or discontinued, in which event a manufacturer is authorized to appoint a temporary licensed wholesaler to service the manufacturer's brands in the designated sales territory and to take a financial or ownership interest in the temporary licensed wholesaler in connection with the appointment. Notwithstanding this section to the contrary, a wholesaler that has continuously held a valid wholesale distribution permit, issued pursuant to this section for a period of at least six (6) months prior to March 27, 2015, and has held a direct or indirect interest in a brewer or manufacturer, continuously during that period of time, and holds a trademark or marketing rights to a brand or brands of beer, may continue to hold the interest, and may expand the interest to effect the brewing, bottling, and sales of beer in which the wholesaler holds the trademark or marketing rights. It is the intent of the general assembly that this subsection (e) be prospective only and not be applicable to compel the divestiture of trademark or marketing rights or a direct or indirect interest held by a wholesaler for the six-month period prior to March 27, 2015. For purposes of this section, “manufacturer” means: A holder of a license to manufacture or import beer; An officer, director, agent, or employee of such a license holder; or An affiliate of such a license holder, regardless of whether the affiliation is corporate or by management, direction, or control.