
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 27USC205]

 
                     TITLE 27--INTOXICATING LIQUORS
 
              CHAPTER 8--FEDERAL ALCOHOL ADMINISTRATION ACT
 
              SUBCHAPTER I--FEDERAL ALCOHOL ADMINISTRATION
 
Sec. 205. Unfair competition and unlawful practices

    It shall be unlawful for 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 warehouseman and bottler, of distilled spirits, 
directly or indirectly or through an affiliate:

(a) Exclusive outlet

    To require, by agreement or otherwise, that any retailer engaged in 
the sale of distilled spirits, wine, or malt beverages, purchase any 
such products from such person to the 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, if such requirement is 
made in the course of interstate or foreign commerce, or if such person 
engages in such practice to such an extent as substantially to restrain 
or prevent transactions in interstate or foreign commerce in any such 
products, or if the direct effect of such requirement 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; or

(b) ``Tied house''

    To induce through any of the following means, 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 distilled spirits, wine, or malt beverages sold or offered for sale 
by other persons in interstate or foreign commerce, if such inducement 
is made in the course of interstate or foreign commerce, or if such 
person engages in the practice of using such means, or any of them, to 
such an extent as substantially to restrain or prevent transactions in 
interstate or foreign commerce in any such products, or if the direct 
effect of such 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: (1) By acquiring or 
holding (after the expiration of any existing license) any interest in 
any license with respect to the premises of the retailer; or (2) by 
acquiring any interest in real or personal property owned, occupied, or 
used by the retailer in the conduct of his business; or (3) by 
furnishing, giving, renting, lending, or selling to the retailer, any 
equipment, fixtures, signs, supplies, money, services, or other thing of 
value, subject to such exceptions as the Secretary of the Treasury shall 
by regulation prescribe, having due regard for public health, the 
quantity and value of articles involved, established trade customs not 
contrary to the public interest and the purposes of this subsection; or 
(4) by paying or crediting the retailer for any advertising, display, or 
distribution service; or (5) by guaranteeing any loan or the repayment 
of any financial obligation of the retailer; or (6) 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 
ascertained by the Secretary of the Treasury and prescribed by 
regulations by him; or (7) by requiring the retailer to take and dispose 
of a certain quota of any of such products; or

(c) Commercial bribery

    To induce through any of the following means, any trade buyer 
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 distilled spirits, wine, or malt beverages sold or offered 
for sale by other persons in interstate or foreign commerce, if such 
inducement is made in the course of interstate or foreign commerce, or 
if such person engages in the practice of using such means, or any of 
them, to such an extent as substantially to restrain or prevent 
transactions in interstate or foreign commerce in any such products, or 
if the direct effect of such inducement is to prevent, deter, hinder, or 
restrict other persons from selling or offering for sale any such 
products to such trade buyer in interstate or foreign commerce: (1) By 
commercial bribery; or (2) by offering or giving any bonus, premium, or 
compensation to any officer, or employee, or representative of the trade 
buyer; or

(d) Consignment sales

    To sell, offer for sale, or contract to sell to any trade buyer 
engaged in the sale of distilled spirits, wine, or malt beverages, or 
for any such trade buyer to purchase, offer to purchase, or contract to 
purchase, any such products on consignment or under conditional sale or 
with the privilege of return or on any basis otherwise than a bona fide 
sale, or where any part of such transaction involves, directly or 
indirectly, the acquisition by such person from the trade buyer or his 
agreement to acquire from the trade buyer other distilled spirits, wine, 
or malt beverages--if such sale, purchase, offer, or contract is made in 
the course of interstate or foreign commerce, or if such person or trade 
buyer engages in such practice to such an extent as substantially to 
restrain or prevent transactions in interstate or foreign commerce in 
any such products or if the direct effect of such sale, purchase, offer, 
or contract is to prevent, deter, hinder, or restrict other persons from 
selling or offering for sale any such products to such trade buyer in 
interstate or foreign commerce: Provided, That this subsection shall not 
apply to transactions involving solely the bona fide return of 
merchandise for ordinary and usual commercial reasons arising after the 
merchandise has been sold; or

(e) Labeling

    To sell or ship or deliver for sale or shipment, or otherwise 
introduce in interstate or foreign commerce, or to receive therein, or 
to remove from customs custody for consumption, any distilled spirits, 
wine, or malt beverages in bottles, unless such products are bottled, 
packaged, and labeled in conformity with such regulations, to be 
prescribed by the Secretary of the Treasury, with respect to packaging, 
marking, branding, and labeling and size and fill of container (1) as 
will prohibit deception of the consumer with respect to such products or 
the quantity thereof and as will prohibit, irrespective of falsity, such 
statements relating to age, manufacturing processes, analyses, 
guarantees, and scientific or irrelevant matters as the Secretary of the 
Treasury finds to be likely to mislead the consumer; (2) as will provide 
the consumer with adequate information as to the identity and quality of 
the products, the alcoholic content thereof (except that statements of, 
or statements likely to be considered as statements of, alcoholic 
content of malt beverages are prohibited unless required by State law 
and except that, in case of wines, statements of alcoholic content shall 
be required only for wines containing more than 14 per centum of alcohol 
by volume), the net contents of the package, and the manufacturer or 
bottler or importer of the product; (3) as will require an accurate 
statement, in the case of distilled spirits (other than cordials, 
liqueurs, and specialties) produced by blending or rectification, if 
neutral spirits have been used in the production thereof, informing the 
consumer of the percentage of neutral spirits so used and of the name of 
the commodity from which such neutral spirits have been distilled, or in 
case of neutral spirits or of gin produced by a process of continuous 
distillation, the name of the commodity from which distilled; (4) as 
will prohibit statements on the label that are disparaging of a 
competitor's products or are false, misleading, obscene, or indecent; 
and (5) as will prevent deception of the consumer by use of a trade or 
brand name that is the name of any living individual of public 
prominence, or existing private or public organization, or is a name 
that is in simulation or is an abbreviation thereof, and as will prevent 
the use of a graphic, pictorial, or emblematic representation of any 
such individual or organization, if the use of such name or 
representation is likely falsely to lead the consumer to believe that 
the product has been indorsed, made, or used by, or produced for, or 
under the supervision of, or in accordance with the specifications of, 
such individual or organization: Provided, That this clause shall not 
apply to the use of the name of any person engaged in business as a 
distiller, brewer, rectifier, blender, or other producer, or as an 
importer, wholesaler, retailer, bottler, or warehouseman, of distilled 
spirits, wine, or malt beverages, nor to the use by any person of a 
trade or brand name used by him or his predecessor in interest prior to 
August 29, 1935; including regulations requiring, at time of release 
from customs custody, certificates issued by foreign governments 
covering origin, age, and identity of imported products: Provided 
further, That nothing herein nor any decision, ruling, or regulation of 
any Department of the Government shall deny the right of any person to 
use any trade name or brand of foreign origin not presently effectively 
registered in the United States Patent and Trademark Office which has 
been used by such person or predecessors in the United States for a 
period of at least five years last past, if the use of such name or 
brand is qualified by the name of the locality in the United States in 
which the product is produced, and, in the case of the use of such name 
or brand on any label or in any advertisement, if such qualification is 
as conspicuous as such name or brand.
    It shall be unlawful for any person to alter, mutilate, destroy, 
obliterate, or remove any mark, brand, or label upon distilled spirits, 
wine, or malt beverages held for sale in interstate or foreign commerce 
or after shipment therein, except as authorized by Federal law or except 
pursuant to regulations of the Secretary of the Treasury authorizing 
relabeling for purposes of compliance with the requirements of this 
subsection or of State law.
    In order to prevent the sale or shipment or other introduction of 
distilled spirits, wine, or malt beverages in interstate or foreign 
commerce, if bottled, packaged, or labeled in violation of the 
requirements of this subsection, (1) no bottler of distilled spirits, no 
producer, blender, or wholesaler of wine, or proprietor of a bonded wine 
storeroom, and no brewer or wholesaler of malt beverages shall bottle, 
and (2) no person shall remove from customs custody, in bottles, for 
sale or any other commercial purpose, distilled spirits, wine, or malt 
beverages, respectively, after such date as the Secretary of the 
Treasury fixes as the earliest practicable date for the application of 
the provisions of this subsection to any class of such persons (but not 
later than August 15, 1936, in the case of distilled spirits, and 
December 15, 1936, in the case of wine and malt beverages, and only 
after thirty days' public notice), unless, upon application to the 
Secretary of the Treasury, he has obtained and has in his possession a 
certificate of label approval covering the distilled spirits, wine, or 
malt beverages, issued by the Secretary in such manner and form as he 
shall by regulations prescribe: Provided, That any such bottler of 
distilled spirits, or producer, blender, or wholesaler of wine, or 
proprietor of a bonded wine storeroom, or brewer or wholesaler of malt 
beverages shall be exempt from the requirements of this subsection if, 
upon application to the Secretary, he shows to the satisfaction of the 
Secretary that the distilled spirits, wine, or malt beverages to be 
bottled by the applicant are not to be sold, or offered for sale, or 
shipped or delivered for shipment, or otherwise introduced, in 
interstate or foreign commerce. Officers of internal revenue are 
authorized and directed to withhold the release of distilled spirits 
from the bottling plant unless such certificates have been obtained, or 
unless the application of the bottler for exemption has been granted by 
the Secretary; and customs officers are authorized and directed to 
withhold the release from customs custody of distilled spirits, wine, 
and malt beverages, unless such certificates have been obtained. The 
District Courts of the United States, and the United States court for 
any Territory shall have jurisdiction of suits to enjoin, annul, or 
suspend in whole or in part any final action by the Secretary upon any 
application under this subsection; or

(f) Advertising

    To publish or disseminate or cause to be published or disseminated 
by radio broadcast, or in any newspaper, periodical or other publication 
or by any sign or outdoor advertisement or any other printed or graphic 
matter, any advertisement of distilled spirits, wine, or malt beverages, 
if such advertisement is in, or is calculated to induce sales in, 
interstate or foreign commerce, or is disseminated by mail, unless such 
advertisement is in conformity with such regulations, to be prescribed 
by the Secretary of the Treasury, (1) as will prevent deception of the 
consumer with respect to the products advertised and as will prohibit, 
irrespective of falsity, such statements relating to age, manufacturing 
processes, analyses, guaranties, and scientific or irrelevant matters as 
the Secretary of the Treasury finds to be likely to mislead the 
consumer; (2) as will provide the consumer with adequate information as 
to the identity and quality of the products advertised, the alcoholic 
content thereof (except the statements of, or statements likely to be 
considered as statements of, alcoholic content of malt beverages and 
wines are prohibited), and the person responsible for the advertisement; 
(3) as will require an accurate statement, in the case of distilled 
spirits (other than cordials, liqueurs, and specialties) produced by 
blending or rectification, if neutral spirits have been used in the 
production thereof, informing the consumer of the percentage of neutral 
spirits so used and of the name of the commodity from which such neutral 
spirits have been distilled, or in case of neutral spirits or of gin 
produced by a process of continuous distillation, the name of the 
commodity from which distilled; (4) as will prohibit statements that are 
disparaging of a competitor's products or are false, misleading, 
obscene, or indecent; (5) as will prevent statements inconsistent with 
any statement on the labeling of the products advertised. This 
subsection shall not apply to outdoor advertising in place on June 18, 
1935, but shall apply upon replacement, restoration, or renovation of 
any such advertising. The prohibitions of this subsection and 
regulations thereunder shall not apply to the publisher of any 
newspaper, periodical, or other publication, or radio broadcaster, 
unless such publisher or radio broadcaster is engaged in business as a 
distiller, brewer, rectifier, or other producer, or as an importer or 
wholesaler, of distilled spirits, wine, or malt beverages, or as a 
bottler, or warehouseman and bottler, of distilled spirits, directly or 
indirectly or through an affiliate.
    The provisions of subsections (a), (b), and (c) of this section 
shall not apply to any act done by an agency of a State or political 
subdivision thereof, or by any officer or employee of such agency.
    In the case of malt beverages, the provisions of subsections (a), 
(b), (c), and (d) of this section shall apply to transactions between a 
retailer or trade buyer in any State and a brewer, importer, or 
wholesaler of malt beverages outside such State only to the extent that 
the law of such State imposes similar requirements with respect to 
similar transactions between a retailer or trade buyer in such State and 
a brewer, importer, or wholesaler of malt beverages in such State, as 
the case may be. In the case of malt beverages, the provisions of this 
subsection and subsection (e) of this section shall apply to the 
labeling of malt beverages sold or shipped or delivered for shipment or 
otherwise introduced into or received in any State from any place 
outside thereof, or the advertising of malt beverages intended to be 
sold or shipped or delivered for shipment or otherwise introduced into 
or received in any State from any place outside thereof, only to the 
extent that the law of such State imposes similar requirements with 
respect to the labeling or advertising, as the case may be, of malt 
beverages not sold or shipped or delivered for shipment or otherwise 
introduced into or received in such State from any place outside 
thereof.
    The Secretary of the Treasury shall give reasonable public notice, 
and afford to interested parties opportunity for hearing, prior to 
prescribing regulations to carry out the provisions of this section.

(Aug. 29, 1935, ch. 814, title I, Sec. 105, formerly Sec. 5, 49 Stat. 
981; Feb. 29, 1936, ch. 105, Sec. 2, 49 Stat. 1152; June 25, 1936, ch. 
804, 49 Stat. 1921; June 26, 1936, ch. 830, title V, Secs. 505, 506, 49 
Stat. 1965, 1966; 1940 Reorg. Plan No. III, Sec. 2, eff. June 30, 1940, 
5 F.R. 2108, 54 Stat. 1232; Apr. 20, 1942, ch. 244, Sec. 1(h), 56 Stat. 
219; June 25, 1948, ch. 646, Sec. 32(b), 62 Stat. 991; May 24, 1949, ch. 
139, Sec. 127, 63 Stat. 107; renumbered title I, Sec. 105, and amended 
Pub. L. 100-690, title VIII, Sec. 8001(a)(1), (2), (b)(2), Nov. 18, 
1988, 102 Stat. 4517, 4521; Pub. L. 106-113, div. B, Sec. 1000(a)(9) 
[title IV, Sec. 4732(b)(13)], Nov. 29, 1999, 113 Stat. 1536, 1501A-584.)

                          Codification

    As originally enacted subsec. (e) of this section contained a 
reference to the Supreme Court of the District of Columbia. Act June 25, 
1936, substituted ``the district court of the United States for the 
District of Columbia'' for ``the Supreme Court of the District of 
Columbia'', and act June 25, 1948, as amended by act May 24, 1949, 
substituted ``United States District Court for the District of 
Columbia'' for ``district court of the United States for the District of 
Columbia''. However, the words ``United States District Court for the 
District of Columbia'' have been deleted entirely as superfluous in view 
of section 132(a) of Title 28, Judiciary and Judicial Procedure, which 
states that ``There shall be in each judicial district a district court 
which shall be a court of record known as the United States District 
Court for the district'', and section 88 of Title 28 which states that 
``the District of Columbia constitutes one judicial district''.
    An amendment to the second proviso of subsec. (e) of this title was 
contained in act June 26, 1936, ch. 830, title V, Sec. 506, 49 Stat. 
1965. The amendment was to have taken effect when a majority of the 
members of the Federal Alcohol Administration authorized to be appointed 
under section 202b of this title took office. However, the members were 
never appointed and section 202b of this title was repealed by Pub. L. 
89-554, Sec. 8(a), Sept. 6, 1966, 80 Stat. 649.


                               Amendments

    1999--Subsec. (e). Pub. L. 106-113 substituted ``United States 
Patent and Trademark Office'' for ``United States Patent Office'' in 
first par.
    1988--Subsec. (e). Pub. L. 100-690, Sec. 8001(b)(2), substituted 
``the date of the enactment of this title'' for ``the date of the 
enactment of this Act'', which had been translated editorially as 
``August 29, 1935'', thereby requiring no change in text.
    1942--Subsec. (f)(2). Act Apr. 20, 1942, substituted ``beverages and 
wines are prohibited'' for ``beverages are prohibited and except that, 
in case of wines, statements of alcoholic content shall be required only 
for wines containing more than 14 per centum of alcohol by volume,''.
    1936--Subsec. (e). Act Feb. 29, 1936, substituted ``August 15, 1936, 
in the case of distilled spirits, and December 15, 1936, in the case of 
wine and malt beverages'' for ``March 1, 1936,''.
    Subsec. (e). Act June 26, 1936, amended subsec. (e) generally.


                    Effective Date of 1999 Amendment

    Amendment by Pub. L. 106-113 effective 4 months after Nov. 29, 1999, 
see section 1000(a)(9) [title IV, Sec. 4731] of Pub. L. 106-113, set out 
as a note under section 1 of Title 35, Patents.

                          Transfer of Functions

    ``Secretary of the Treasury'' and ``Secretary'' were substituted in 
subsecs. (b), (e), and (f) for ``Administrator'', meaning the 
Administrator of the Federal Alcohol Administration, pursuant to Reorg. 
Plan No. III of 1940, see note set out under section 201 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 204, 207 of this title; 
title 26 section 5206.
