Kentucky Administrative Regulations › Title 804 - PUBLIC PROTECTION CABINET - DEPARTMENT OF ALCOHOLIC BEVERAGE CONTROL › Chapter 4 - Licensing › Section 804 KAR 4:015 - Interlocking substantial interest between licensees prohibited

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO:
				KRS
				243.030,
				243.040,
				243.110,
				244.240,
				244.570,
				244.590
NECESSITY, FUNCTION, AND CONFORMITY:
				KRS
				241.060 authorizes the board to promulgate
				administrative regulations regarding matters over which the board has
				jurisdiction. The control of alcoholic beverages in the Commonwealth of
				Kentucky, as codified in Chapters 241 - 244 of the Kentucky Revised Statutes,
				has been established by the Kentucky legislature as a "three tiered" system.
				The three (3) tiers of this system are designated as manufacturer/producer,
				wholesaler/distributor, and retailer. Each of these three (3) levels operates
				separately, distinctly, and apart from each other for the purpose of control.
				In order for this control to be effectively administered by this board, it is
				necessary to prevent any type of interlocking substantial interest by and among
				the three (3) separate tier levels. This administrative regulation provides
				additional detail regarding incompatible licenses and prohibited interlocking
				substantial interests among the tiers.
Section
			 1. Definitions.
(1)
			 "Manufacturer" means a person or entity who is a distiller, rectifier, winery,
			 brewer, or who otherwise produces alcoholic beverages, whether located within
			 or without this state.
(2)
			 "Retailer" means a person or entity who sells alcoholic beverages at retail,
			 whether located within or without this state, excepting manufacturers with
			 limited retail privileges or the right to hold certain retail
			 licenses.
(3) "Substantial
			 interest" means:
(a) Membership in, or a
			 direct or indirect ownership interest in, a business, sole proprietorship,
			 partnership, corporation, limited liability company, limited liability
			 partnership, or other legal entity, whether individually, or by a spouse, or in
			 combination with a spouse, which amounts to ten (10) percent or greater of the
			 total ownership or membership interests;
(b) A common officer, director, manager, or
			 employee with managerial responsibilities, in a business, sole proprietorship,
			 partnership, corporation, limited liability company, limited liability
			 partnership, or other legal entity;
(c) A common owner, partner, or member,
			 including a spouse, the aggregate share of which is ten (10) percent or greater
			 of the total ownership of, or membership in, a business, sole proprietorship,
			 partnership, corporation, limited liability company, limited liability
			 partnership, or other legal entity; or
(d) Any other direct or indirect interest
			 which provides an ability to control or influence decisions by a business, sole
			 proprietorship, partnership, corporation, limited liability company, limited
			 liability partnership, or other legal entity.
(4) "Wholesaler" means a person or entity who
			 is a wholesaler, distributor, or who sells alcoholic beverages at wholesale,
			 located within this state.