TTB Seeks Competition-Related Information About American Alcohol Market

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President Biden recently issued Executive Order 14036 (E.O. 14036) to create the White House Competition Council (Council), which “shall coordinate, promote, and advance Federal Government efforts to address overconcentration, monopolization, and unfair competition in or directly affecting the American economy.” 86 Fed. Reg. 36987, 36990 (July 14, 2021).

E.O. 14036, among other things, requires

the Secretary of the Treasury, in consultation with the Attorney General and the Chair of the FTC, not later than 120 days after the date of this order, shall submit a report to the Chair of the … Council, assessing the current market structure and conditions of competition, including an assessment of any threats to competition and barriers to new entrants, including:

(i) any unlawful trade practices in the beer, wine, and spirits markets, such as certain exclusionary, discriminatory, or anticompetitive distribution practices, that hinder smaller and independent businesses or new entrants from distributing their products;

(ii) patterns of consolidation in production, distribution, or retail beer, wine, and spirits markets; and

(iii) any unnecessary trade practice regulations of matters, such as bottle sizes, permitting, or labeling that may unnecessarily inhibit competition by increasing costs without serving any public health, informational, or tax purpose.

—86 Fed. Reg. at 36994.

This action is meant to “protect the vibrancy of the American markets for beer, wine, and spirits, and to improve market access for smaller, independent, and new operations … .” Id.

E.O. 14036 further requires

the Secretary of the Treasury, through the Administrator of the Alcohol and Tobacco Tax and Trade Bureau [TTB], [to], not later than 240 days after the date of this order, consider:

(i) initiating a rulemaking to update the [TTB’s] trade practice regulations;

(ii) rescinding or revising any regulations of the beer, wine, and spirits industries that may unnecessarily inhibit competition; and

(iii) reducing any barriers that impede market access for smaller and independent brewers, winemakers, and distilleries.

Id.

In accordance with E.O. 14036, the Department of the Treasury (Treasury) has issued a “Request for Information (RFI) to solicit input regarding the current market structure and conditions of competition in the American markets for beer, wine, and spirits, including an assessment of any threats to competition and barriers to new entrants.” 86 Fed. Reg. 40678 (July 28, 2021). The public may submit comments as individuals or on behalf of a business or organization to TTB no later than August 18, 2021.

Treasury’s RFI presents an early opportunity for alcoholic beverage industry members to shape the report content the agency submits to the Council, as well as decisions related to potential TTB alcohol regulation changes.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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