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  The ILCC Legal Division

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TPP-34:
Indirect Payments Through Third Party Arrangements

I. Purpose

A practice has occurred whereby third party promotion companies are receiving among other things “of value” advertising, money, and services from manufacturers, distributors and importing distributors, and in turn the third party promotion companies are directing such benefits to retailers. The purpose of this policy is to set the policy of the Illinois Liquor Control Commission (ILCC) with respect to manufacturers, distributors and importing distributors indirectly furnishing such things “of value” to a third party where the benefits flow to the retailer. Manufacturer, distributor and importing distributor may not indirectly furnish a thing “of value” except as specifically provided in the Illinois Liquor Control Act, or as previously determined by the ILCC to be permissible.

II. Policy

It is the policy of the ILCC that indirectly furnishing, giving, renting, lending or selling of equipment, fixtures, signs, supplies, money, services, including but not limited to display and pricing services or other things “of value” by a manufacturer, distributor and importing distributor to a third party, where the resulting benefits from such indirect thing “of value” flow to retailers, is the furnishing of things “of value” in violation of Sections 5/6-5, 5/6-5 and 5/6-6 of the Illinois Liquor Control Act (235 ILCS 5/6-4, 5.6-5, 5/6-6).

III. Background

Sections 5/6-5, 5/6-5 and 5/6-6 of the Illinois Liquor Control Act (235 ILCS 5/6-4, 5.6-5, 5/6-6) prohibit the furnishing, directly or indirectly, of things“of value” by manufacturers, distributors and importing distributors to retailers, and the reciprocal receiving of such things “of value” by retailers from manufacturers, distributors and importing distributors. Trade Practice Policy No. 1 (TPP-1) is incorporated by reference as though fully set forth herein.

IV. Exceptions

  1. An indirect furnishing of things “of value” will not arise with respect to advertising as provided in Section 100.330 of the Rules of the Commission and furnished in accordance with Trade Practice Policy concerning Sponsorship of Events at Retail Premises (TPP-3).
  2. Nothing herein shall prohibit manufacturers, distributors and importing distributors from selling alcoholic beverages through the use of quantity or promotional price discounts.
  3. Nothing herein shall prohibit third party arrangements, if the holder of the license is a public body.
  4. Nothing herein shall prohibit third party arrangements for the benefit of special events, provided a special event retailer license has been issued by the Commission.

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