Slotting allowances and the retail sale of alcohol beverages

Considerable controversy and debate surrounds the practice of slotting allo wances, or fees, paid by manufacturers for obtaining the patronage of retai lers. To date, regulators have yet to agree on public policy toward these p ractices; at least one federal antitrust agency suggests that slotting fees may be competitive, another has conducted investigations ir these practice s, and still another suggests banning them altogether. In this article, the authors examine the recent decision by the Bureau of Alcohol, Tobacco, and Firearms (BATF) to prohibit slotting allowances in the retail sale of alco hol beverages. Focusing on the regulatory environment, industry structure, marketing practices, and consumer consumption behavior in the alcohol bever age industry, the authors analyze the BATF's decision and attempt to reconc ile disparate public policy treatment of these practices. Implications for understanding slotting allowances and recommendations for further public po licy development and research then are explored.