News:

According to TTB, Modus Operandi Cellars, LLC, a bonded winery in St. Helena, California, was served a one day suspension of its basic permit.  In its press release, TTB said, “over the course of almost two years, Modus Operandi Cellars, LLC, engaged in consignment sales of wine to wholesalers who were not obligated to pay for the wine until after it had been sold to retailers.  Consignment sales arrangements, like other unlawful trade practices, are used to gain an unfair advantage over law-abiding industry members and ultimately limit consumer choice.”  

Just a month after Heineken settled with the California Department of Alcohol and Beverage Control (ABC) for a case against the manufacturer participating in an illegal marketing scheme aimed at consumers, the global brewer has said it will focus its social media marketing more heavily on Instagram rather than Snapchat. The Drum reported the decision is based on the average age of the demographics of the two mega social media platforms. Heineken plans on doubling its digital marketing by 2020 and wants to make sure its marketing efforts are targeted to consumers well above the legal drinking age. Heineken based on its research believes that the Snapchat platform is “too young for us” and will instead focus on Instagram that has a higher age demographic. With regulatory agencies such as the California ABC cracking down on prohibited marketing Heineken appears to be taking the necessary steps to make sure not to cross a line that could be seen as marketing alcohol products to minors. According to the Brewers Association code, “Placements made by or under the control of the Brewer in digital media may only be made where at least 71.6% of the audience is expected to be adults of legal drinking age.” Instagram allows brands to restrict viewing to people older than 21, something which Snapchat only allows if the brand pays for an ad targeted to people 21 and older. By: Oren Cytrynbaum

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  After recently recently reaching a settlement with Heineken USA Inc., the California Department of Alcohol Beverage Control (“CABC”), has reached another settlement for $400,000 with Anheuser-Busch, LLC wholesalers and a $10,000 settlement with Straub Distributing Company LTD for unfair marketing practices aimed at retail licensees. Additionally, approximately 34 retail licensees also received disciplinary sanctions levied against their ABC licenses for their related activities. According to a CABC press release, the division’s Trade Enforcement Unit conducted an investigation that began in 2015. The investigation found that the wholesalers covered the cost of, or partially financed, refrigeration units, television sets and draught systems at retailers in Southern California who are part of Anheuser-Busch LLC’s distribution network. California law states that wholesalers cannot provide things of values to retailers. Such actions create an unfair marketplace as it can cause undue influence over retailers at the expense of competing wholesalers. The settlement is one of the largest imposed by the CABC. The CABC said “as part of the settlement by Anheuser-Busch, LLC, the company must provide training to its current and newly hired employees regarding the administration of a rental or lease program of Anheuser-Busch, LLC refrigeration equipment by a company unit within the confines of law. In exchange for suspension of $200,000 of the fine, Anheuser-Busch, LLC agreed to extend the conditions of discipline to all Anheuser-Busch, LLC wholesalers in the state.” A lesson to others in the industry regarding the importance of training. Failure to comply with the terms of the agreement may…

Posted in alcohol beverage law, beer, CABC, California | Tagged Busch, California, Oren, trade practice | Comments Off