NON-ALCOHOLIC MALT BEVERAGE MARKETING
Proprietors of Distilled Spirits Plants, Bonded Wine
Cellars, Taxpaid Wine Bottling Houses, Brewers,
Importers, Wholesale Malt Beverage Dealers, Wholesale
Liquor Dealers, and Others Concerned:
Purpose. This circular is to advise members of the
regulated industries of the Bureau of Alcohol, Tobacco and
Firearms (ATF) position concerning the marketing of
non-alcoholic malt beverages.
Background. The Federal Alcohol Administration Act
(FAA Act) defines malt beverages under 27 U.S.C. section
211 (a)(7) and the regulations issued thereunder, without
any reference to a minimum level of alcohol content. Thus,
importers and wholesalers of all malt beverages, including
non-alcoholic malt beverages, are subject to the permit
requirements of the FAA Act pursuant to the provisions of
27 U.S.C. sections 203 and 204. When properly labeled,
malt beverages of less than one-half of one percent of
alcohol may be designated as "cereal beverages," "near
beer," or "non-alcoholic malt beverages." See 27 C.F.R.
§§ 7.24(d), 7.26(c). Moreover, where State law imposes
similar requirements, non-alcoholic malt beverages are
subject to the Unfair Competition and Unlawful Practices
provisions of the FAA Act. See 27 U.S.C. §205. Regula-
tions at 27 C.F.R. Parts 6, 8, 10, and 11 define the
parameters of these provisions.
Discussion. Recently ATF received an inquiry concerning
the marketing of non-alcoholic malt beverages by industry
members. Specifically, industry members requested ATF's
position on the giving of cash payments to retailers for
the purpose of selling their non-alcoholic malt beverages.
Generally, if these cash payments induce retailers to
purchase an industry member's non-alcoholic malt beverages
products to the exclusion of a competitor's products
and if State law also prohibits these payments, such a
practice may well violate the FAA Act. Moreover, even
if a particular State law does not include non-alcoholic
malt beverages within the definition of a malt beverage,
ATF will nevertheless closely scrutinize promotions of
non-alcoholic malt beverages to determine the extent to
which they may be tied in with the sale of other alcoholic
products that fall within the provisions of the FAA Act.
Finally, ATF will investigate marketing strategies that
point to the existence of unfair trade practices under
the FAA Act and will take the appropriate action accor-
ding to the merits of each case.
Inquiries. Inquiries concerning this circular should
refer to its number and be addressed to the Associate
Director (Compliance Operations), Bureau of Alcohol,
Tobacco and Firearms, 650 Massachusetts Avenue, N.W.,
Room 8000, Washington, DC 20226.