Brewed Awakening – The Cubs and Beer

{Tied House Rules of the Game}

It happened. It actually happened! The Cubs won the World Series after 108 years of billy goat interference! I am, admittedly, a new fan. Some of you might say, “that’s convenient. You’re only a fan because they won. Where were you through the tough times?” Quite frankly, I didn’t care about them or baseball through the tough times because I didn’t like baseball. It’s only since I married my husband that I’ve grown to appreciate it and the Cubs. Plus, why does it matter why I became a fan? I was dedicated through the Series and was overjoyed for their victory. I don’t have to prove myself to you!

What’s the point of all of this? Well, as Americans, we know that the only reason to win at anything is to be able to capitalize on it as much as possible. That’s right, milk that goat for all it’s worth. How? Beer. Cubs Beer.

The day after the game I did what any lawyer worth their salt does – I thought about how the law fits into all of this. In a matter of 45 seconds, I had thought up a scenario where the Cubs would like to manufacture and sell their own brand of beer – Cubs Beer (or Cubby the Beer, a play on bear, it’s funny). But, could they?

Maaaaybe. Here’s why.

Tie Your Mother(‘s house) Down

Tied house laws make it very difficult, if not impossible, for an owner of a retail license to also manufacture alcohol. This is because of the 3-tier system that exists both under federal and state laws. The gist of it is that the owner of a retail, manufacturing, or distribution license cannot be the owner of any of the other two. So, if you’re a beer manufacturer, you can’t also be a retailer or a distributor. After Prohibition, legislatures were concerned about the overconsumption of alcohol and the influence of businesses that owned the entire supply chain. Enter the 3-tier system and tied house rules.

You might be wondering what this has to do with the Cubs brewing their own beer. Well, as many baseball fans are intimately aware, ballparks sell beer. That means they own a retail license. Aha…do you see where I’m headed with this? If whoever owns the retail license is also an owner of the Cubs, then things aren’t looking too promising for Cubby the Beer.

Brace yourselves because I’m about to get a little technical – but I’ll make my way back to boozed-down law soon. Federal law does not have an outright ban on cross-ownership (it does have restrictions, though), but many states have specifically legislated this particular issue. Illinois and California both have laws that either entirely prohibit, or provide a few exceptions to a prohibition of, multi-tier ownership. In Illinois, the law says that no person (FYI, the term “person” includes corporations) with a retailer’s license, excluding airplane licensees exercising certain powers, or any subsidiary or affiliate of that person, or any officer, associate, member, partner, representative or agent, or shareholder can be issued a manufacturer’s license. A mouthful, right? And, sadly, not of beer.

Who’s Your Daddy?

So, Cubby the Beer’s future heavily depends on who owns the retail license. We would then look to their subsidiaries, affiliates, shareholders, and so on to see if there is a common thread. There is one more kink, however. We would also have to know if Cubby the Beer’s owner is providing anything “of value” to the retail license owner, and vice versa. I didn’t tell you earlier because I like plot twists.

Here’s a very brief excerpt from Illinois’ Liquor Control Act (Section 6-5): it is “unlawful for any person having a retailer’s license or any officer, associate, member, representative or agent of such licensee to accept, receive or borrow money, or anything else of value, or accept or receive credit…directly or indirectly from any manufacturer.” I won’t venture down this path today, but you should be aware of its existence.

Fizzy Wizzy Had No Beer

Tell me you know what I’m talking about – Fuzzy Wuzzy was a bear…anyone?

Anyway, regardless of the intricacies of the law, we can’t get very far until we have a clear picture of ownership. Who owns the retail license at Wrigley Field? Who will own the manufacturer’s license for Cubs beer? Only then can we consider a world in which the Cubs win the World Series AND manufacture their own beer.

HOW DO I GET
STARTED?

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Full Circle Business Law, PC
425 E. Colorado St., Suite 660
Glendale, CA 91205
Email: clientcare@fullcirclebl.com
Phone: (818) 247-2036