Trade Practices
The Federal Alcohol Administration Act (FAA Act), 27 U.S.C., Chapter 8, Subchapter I, provides for regulation of those engaged in the alcohol beverage industry and for the protection of consumers.
To ensure the integrity of the industry, the FAA Act includes provisions to:
- Require a permit for those who engage in the business as a producer, importer, or wholesaler of alcohol beverages;
- Issue, suspend, and revoke permits;
- Ensure the integrity of the industry by preventing persons who are not likely to operate in accordance with the law from entering the trade; and
- Protect the revenue and consumers by ensuring the integrity of the industry members.
To protect consumers, FAA Act provisions:
- Ensure that labeling and advertising of alcohol beverages provide adequate information to the consumer concerning the identity and quality of the product;
- Require that alcohol beverages bottlers and importers must have an approved certificate of label approval (COLA) or an exemption certificate before the product may be sold in the United States; and
- Prevent misleading labeling or advertising that may result in potential for consumer deception regarding the product.
The FAA Act includes provisions to preclude unfair trade practice. These provisions:
- Regulate the marketing promotional practices concerning the sale of alcohol beverages; and
- Regulate practices, such as exclusive outlets, tied house arrangements, commercial bribery, and consignment sales.
Unlawful Trade Practices as Outlined in Regulations
Objectives of the FAA Act
- To regulate interstate commerce and foreign commerce
- To promote fair competition in the industry
- To protect the revenue
- To protect the consumer
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