Liquor Group Wholesale has received the green light for its bailment distribution business model in the US.

The wine and spirits distributor said late last week that it has received clearance from the director of the US Tax and Trade Bureau (TTB) for its distribution business model.

The patent-pending bailment distribution business model in use by Liquor Group (LGW) in both licence and control states in the US has been approved by the TTB in a recent notice of compliance, the company said.

"Because there are specific Federal and State laws prohibiting 'consignment sales' of alcohol beverages, several industry members and distribution competitors of Liquor Group had levied complaints with the TTB and State Alcohol Control agencies claiming that the 'Innovative Distribution' approach utilised by Liquor Group through it's patent-pending bailment warehousing business model was in violation of regulations and constituted an "Unfair Business Advantage"," LGW said.

The company cited a complaint by an unnamed competitor as clarifying the success of its system: "Liquor Group does not have any carrying costs for the inventory placed in their control by alcohol beverage manufacturers on a state-by-state basis, allowing them to continue to grow rapidly and unfettered by the costs of the alcohol beverages in their inventory; unaffected by the volume of alcohol beverages they place in each state wherein they operate; and with no need for additional capital to grow their operations; which makes them unmatched in the alcohol beverage industry, and as such they are utilising an unfair business advantage," the company claimed the complaint said.

LGW represents in the region of 1,700 spirits and wine products with varying degrees of operations in 31 US states.