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Texas Alcoholic Beverage Code - Section 102.01. Tied House Prohibited

Legal Research Home > Texas Laws > Alcoholic Beverage Code > Texas Alcoholic Beverage Code - Section 102.01. Tied House Prohibited

§ 102.01. TIED HOUSE PROHIBITED.  (a) In this section, 
"tied house" means any overlapping ownership or other prohibited 
relationship between those engaged in the alcoholic beverage 
industry at different levels, that is, between a manufacturer and a 
wholesaler or retailer, or between a wholesaler and a retailer, as 
the words "wholesaler," "retailer," and "manufacturer" are 
ordinarily used and understood, regardless of the specific names 
given permits under Subtitle A, Title 3, of this code.
	(b)  In considering an original or renewal application for a 
permit issued under Subtitle A, Title 3, of this code, the 
commission or administrator may make any investigation or request 
any additional information necessary to enforce this section and to 
provide strict adherence to a general policy of prohibiting the 
tied house and related practices.  The activities prohibited by 
this section are unfair competition and unlawful trade practices.
	(c)  No person having an interest in a permit issued under 
Subtitle A, Title 3, of this code may secure or hold, directly or 
indirectly, an ownership interest in the business or corporate 
stocks, including a stock option, convertible debenture, or similar 
interest, in a permit or business of a permittee of a different 
level who maintains licensed premises in Texas.
	(d)  No person may act or serve as officer, director, or 
employee of the businesses of permittees at different levels.
	(e)  No permittee may own the premises, fixtures, or 
equipment of a permittee of a different level.
	(f)  No permittee may secure or in any manner obtain the use 
of any premises, fixtures, or equipment on the credit of a permittee 
of a different level.
	(g)  No permittee may loan to, or by means of his credit 
secure a loan for, a permittee of a different level.  If a permittee 
secures a loan from a source outside the state, there is a 
presumption of a tied house relationship or subterfuge, and the 
permittee securing the loan has the burden of showing that he has 
not violated this section.
	(h)  No permittee may enter with a permittee of a different 
level or with another person or legal entity into a conspiracy or 
agreement to control or manage, financially or administratively, 
directly or indirectly, in any form or degree, the business or 
interests of a permittee of a different level.
	(i)  No permittee may enter with another permittee into any 
type of profit-sharing agreement or any agreement relating to the 
repurchase of any assets or any agreement attempting to effectuate 
the shipment or delivery of an alcoholic beverage on consignment.
	(j)  On finding that a person has violated any provision of 
Subsections (c) through (i) of this section, the commission or 
administrator shall suspend for not less than six months or cancel 
the permit of any permittee involved.  A person who held or had an 
interest in a permit cancelled under this subsection is ineligible 
to hold or have an interest in a permit for one year after the 
cancellation.
	(k)  This section does not apply to the application for 
renewal of a permit held by an applicant who was engaged in the 
legal alcoholic beverage business in this state under a charter or 
permit before August 24, 1935, or to an application for a 
nonresident seller's or wholesaler's permit held by an applicant 
who continuously has been the holder of a permit of that type since 
January 1, 1941.

Acts 1977, 65th Leg., p. 498, ch. 194, § 1, eff. Sept. 1, 1977.            

Last modified: August 11, 2007