804 KAR 4:015. Interlocking interest between licensees prohibited.
RELATES TO: KRS 243.030, 243.040
STATUTORY AUTHORITY: KRS 241.060
NECESSITY, FUNCTION, AND CONFORMITY: 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 tiers of this system are designated as producer, wholesale/distributor, and retail. Each of these three (3) levels operate separately 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 interest by and between the three (3) separate levels. The purpose of this administrative regulation is to clarify the interlocking interests which will be prohibited by this board.
Section 1. As used in this administrative regulation unless otherwise specified:
(1) "Manufacturers" include distillers, rectifiers, blenders, wineries, and brewers whether located within or without this state.
(2) "Wholesalers" include wholesalers of distilled spirits and wine and distributors of malt beverages, located within this state.
Section 2. No manufacturer of distilled spirits or wine shall have a financial interest, directly or indirectly, by stock ownership, or through interlocking directors in a corporation, in the establishment, maintenance, or operation in the business of a liquor and wine wholesaler.
Section 3. No manufacturer or wholesaler shall have a financial interest, directly or indirectly, by stock ownership, or through interlocking directors in a corporation, or otherwise, in the establishment, maintenance, or operation in the business of a retailer. A manufacturer or wholesaler shall not acquire, by ownership, leasehold, mortgage, or otherwise, directly or indirectly, a interest in the premises of a retailer.
Section 4. The malt beverage administrator or distilled spirits administrator may examine the ownership and management of applicants or existing licensees to determine the presence of an interlocking interest herein prohibited.
Section 5. This administrative regulation shall not apply to licenses issued prior to December 1, 1976. (3 Ky.R. 426; eff. 12-1-1976; Am. 17 Ky.R. 1860; 2192; eff. 12-14-1990; 27 Ky.R. 1334; 1803; eff. 1-15-2001.)