Texas Alcoholic Beverage Code - Section 102.01. Tied House Prohibited
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Texas Laws > Alcoholic Beverage Code > Texas Alcoholic Beverage Code - Section 102.01. Tied House Prohibited
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§ 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
(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