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.”  

  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…

Heineken USA, Inc. reached a settlement with the California Department of Alcohol and Beverage Control (CABC) for, according to the CABC’s press release, a violation against Heineken for participating in an “illegal marketing scheme aimed at consumers.” The settlement was reached on February 10, 2017 and will require Heineken to pay a settlement fee in the amount of $30,000. The case stems from Heineken’s participation in a social media sampling campaign in late 2015.  Prior to the violation, the program received some press, including in Nightclub & Bar and Mobile Marketer.  As reported and further outlined in a Heineken press release, Heineken targeted consumers on Facebook and Twitter and consumers were instructed to download a coupon through Gratafy, the marketing platform app. The promotion offered consumers the opportunity to redeem their coupon in cities such as Los Angeles, Chicago, San Francisco and Houston. Once downloaded, the consumer could go to participating bars or restaurants and redeem the coupon for a free Heineken, Heineken Light or Dos Equis. According to the CABC’s press release, “the Trade Enforcement Unit conducted an inquiry into the proposed advertising campaign, determined it was an illegal marketing scheme, and advised Heineken it was unlawful prior to its implementation. Against ABC’s advisement, Heineken proceeded with launching the illegal marketing scheme. Despite ABC’s initial and a subsequent warnings about the unlawful activity, Heineken allowed the illegal marketing scheme to persist for several weeks.” Since the promotion directed consumers to specific retailers, Heineken was in violation of the California Alcohol Beverage Control Act. Heineken will face a 45…