A-B AGREES TO PAY CALIFORNIA $200k IN TIED-HOUSE SETTLEMENT
Source: Beer Business Daily
March 3rd
Coolers, draft systems, TV monitors, oh my! California law prohibits distributors providing items of value to retailers under tied-house rules. A-B owns several branch wholesalers in California.
So in mid-2016, A-B says it approached the California ABC after an “internal review” to make sure they were in compliance. Turns out, maybe not. Says A-B: “We recently reached an agreement that addresses the findings of the review through several commitments, including enhanced employee training and setting up a system to manage the equipment lease process and payments that is independent from our sales operations. We take trade practices compliance very seriously and are pleased to have this matter resolved to allow us to move forward.”
So A-B will not admit guilt, but they will pay the ABC $400k, half to be paid now and half in escrow for 3 years. If A-B’s branches behave, the other $200k will be returned.
By behaving, California means it wants A-B to train their branch sales, merch, and driver staff on a yearly basis as to what constitutes a tied-house violation. They’ll also have to separate leasing of cooler and draft equipment operation from their sales staff.