Recently, the New York State Liquor Authority levied a $500,000 fine against some well known New York restaurateurs and wine producers.
As if the whopping fine was not enough, the SLA suspended their retail wine store license for 6 months and forced one of the principal owners to relinquish ownership in the store.
What could they have done to deserve such severe disciplinary actions–something called INTERLOCKING INTEREST.
Applicants for a liquor store license are required to disclose any interest (direct or indirect) in any business that manufactures alcoholic beverages or transports or sells such beverages at wholesale.
Any interest in such a business triggers “TIED HOUSE CONCERNS”.
What is a TIED HOUSE?
A bar or restaurant that is required to purchase at least some of its product from a particular supplier or producer. A TIED HOUSE is generally illegal in the United States.
The principals in this case not only owned a retail wine store, they were also wine producers.
The New York State Liquor Authority prohibits anyone from being a producer of wine (in any country) and a retailer of wine in New York State.
So keep in mind that if you are a wine producer in any country you cannot obtain a retail license to sell wine in New York State.