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California ABC Fines Two Large Beer & Wine Wholesalers and numerous Retailers for Unfair Business Practices and Prohibited Marketing Practices

by | Mar 8, 2017 | alcohol beverage law, Beer, CABC, California

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 result suspension of any Anheuser-Busch, LLC wholesaler licensed by the CABC.

By: Oren Cytrynbaum

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