Black v. Magnolia Liquor Co.

delivered the opinion of the Court.

Petitioner seeks to suspend respondent's wholesale liquor permit issued under the Federal Alcohol Administration Act ( 49 Stat. 977 , 27 U. S. C. § 201 ) for having made “quota” sales of alcoholic beverages in violation of § 5 (a) and (b) of the Act. The agency ordered suspension of the-permit for 15 days for that violation. The Court of Appeals set the order aside, 231 F. 2d 941 . The case is here on a petition for a writ of certiorari, which we granted ( 352 U. S. 877 ) because of a conflict between the decision below and Distilled Brands v. Dunigan, 222 F. 2d 867 , from the Second Circuit.

The facts are that during the period in question Johnny Walker Scotch and Seagram's V. 0. Whiskey were in short supply, while Seagram’s Ancient Bottle Gin and Seagram’s 7-Crown Whiskey were plentiful, Ancient Bottle being a poor seller. Respondent, in order to increase its sales of Ancient Bottle Gin and 7-Crown Whiskey, compelled retailers to buy them, which they did not desire, in order to obtain the other two whiskeys which they did desire. The agency found that respondent’s sales were “quota” sales within the meaning of the Act, that they affected adversely the sales of competing brands, and “excluded, in whole or in part, distilled spirits . . . offered for sale by other persons in interstate commerce” — all to the end of substantially restraining and preventing commerce. The Court of Appeals concluded that the transactions complained of, although tie-in sales, did not violate § 5 of the Act.

Tying agreements by which the sale of one commodity is conditioned on the purchase of another have been repeatedly condemned under the antitrust laws, since they serve no purpose beyond the suppression of competition. Standard Oil Co. v. United States, 337 U. S. 293 , 305-306; United States v. Paramount Pictures, 334 U. S. 131 , 156— 159; International Salt Co. v. United States, 332 U. S. 392 ; Mercoid Corp. v. Minneapolis-Honey well Co., 320 U. S. 680 . One aim of Congress by the present legislation was to prohibit practices that were “analogous to those prohibited by the antitrust laws,” (see H. R. Rep.

The court below relied on two countervailing considerations. It noted that § 5 (a) is headed “Exclusive outlet” and § 5 (b) “Tied house.” These titles were enough, it thought, to raise doubts concerning the meaning of the statutory clauses, since the retailer in question was not a “tied house” or “exclusive outlet,” but only the victim of these particular tied-in sales. The court was constrained to read the Act narrowly, as it conceived it to be penal in nature when it forfeited a permit to do business. But we deal here with remedial legislation whose language should be given hospitable scope. See Securities and Exchange Commission v. Joiner Corp., 320 U. S. 344 , 353, 355. The will of Congress would be thwarted if we gave the language in question the strictest construction possible. The fair meaning of the Act is our guide; and it seems too clear for extended argument that the tied-in sale, though it falls short of creating an exclusive outlet and a permanently “tied house,” violates the Act.

The other consideration relied upon by the Court of Appeals was a letter written by the agency to Congress in 1947 asking for an amendment to § 5 because it had doubt “whether violations of the statute could be established through the 'tie-in’ sales.” The administrative practice, we are advised, has quite consistently reflected the view that such sales are banned by the Act. See Annual Report, Commissioner of Internal Revenue 1946,

Reversed.