Tied house rules

Tied house rules prevent any person from having a direct or indirect interest in both a wholesale and a retail business involving alcohol. For example, a craft beverage manufacturer cannot also own a liquor store. There are ways to work around some of the restrictions, but these prohibitions have no exceptions.

In a recent matter, I proposed the following structure to the Authority to ascertain if it would present any tied house issues:

 

Family farm and all real estate held by a single member LLC whose member is wife.

Part of farm leased to a single member LLC who member is husband and on which will be operated a farm brewery and winery (direct wholesale/manufacturing interest by husband).

Wife plays no role in the farm brewery or winery because she has her own business, a restaurant with a retail license (direct retail interest by wife).

Our concern was the real estate is owned by wife with retail interest even though she would play no role in farm brewery and winery and simply be a landlord. Counsel’s Office advised that the landlord relationship itself would not invoke a tied house issue.

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