Today the TTB announced acceptance of a $450,000 offer in compromise from MillerCoors for trade practice violations. The allegations are that MillerCoors’ Miller Fortune had a buy back program where MillerCoors guaranteed participating wholesalers that it would buy back product that went unsold or expired if, in return, the wholesaler fulfilled certain standards. According to the TTB press release, that included “distribution, speed to market, and forecasting/ordering compliance.” Guaranteeing repurchase of product was an alleged consignment sale violation. As noted in the press release, “under the Consignment Sales provisions of the FAA Act, it is unlawful for an industry member to sell or for any trade buyer to purchase alcohol beverage products with the privilege of return.” Returns of product may be permissible, as outlined in 27 CFR Chapter 11 and in the 2012-4 TTB Advisory, for purposes such as defective product, shipment error, change in law preventing sale of the product, etc. See the press release here.

James Short was the director of marketing and merchandising for the Pennsylvania Liquor Control Board (PLCB) from 2003-2012. He was responsible for deciding which products the PLCB stores would sell and which would be discontinued. Short was charged with taking money in exchange for preferring certain products over others in the PLCB retail stores. Federal prosecutors said he received cash, meals, tickets to events, and all-expense paid trips from at least one manufacturer and wholesaler. Short is expected to plead guilty, but no date has been set.

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