2024-04-12 01:12:42
In this article, we take a look at the 11 largest fines handed out to alcohol companies over the past eight years and reveal the costly consequences of non-compliance and unethical practices in the industry.
11 place
E & J Gallo (Apothic, Barefoot Cellars, E&J Brandy, 100+ brands)
The amount of the fine: $378,668 in 2023 February
The essence of the violation: fine for discharging sewage into the river.
in 2021 in August, this Californian wine production company released more than 90,000 tons into the Mercedes River. gallons (340,687 liters) of wastewater. The water board fined the winery $378,668 for “elevated levels of organic matter, potassium and salinity” that threatened fish and other river life.
10 place
Pernod Ricard (Jameson Irish Whiskey, Ballantines, Absolut Vodka, ~240 brands)
The amount of the fine: 697 thousand US dollars, 2022 december
The essence of the violation: the company offered illegal “rebates” (“rebate” in the trade is the act/term when the producer encourages the distributor to sell more production by refunding him for the sales) to bars and clubs for the whiskey sold. The penalty for Pernod Ricard Korea and Pernod Ricard Korea Imperial is due to the fact that, according to the Fair Trade Commission (FTC), these two companies between 2010 and 2020 granted illegal discounts to hundreds of entertainment establishments to boost product sales totaling $61.5 billion. vans (46,019,865.75 US dollars).
9th place
Eagle Brands (Budweiser and Bud Light, Stella Artois ir kiti)
The amount of the fine: 1.5 million US dollars, 2018 december
The essence of the violation: the company violated laws governing competition between companies in the sale of alcoholic beverages. The complaint by the Alcohol and Tobacco Tax and Trade Bureau (The Alcohol and Tobacco Tax and Trade Bureau) alleges that the company paid retailers to “sell and promote its products to the exclusion of competing products.” Payments were disguised as banquet events, credit card payments for discounts, or test production for customers. In addition, TTB also alleges that Eagle Brands provided bottling systems that were to be used only for bottling their own products.
8 place
Heineken USA (Heineken, Amstel, Desperados, 300+ brands)
The amount of the fine: 2.5 million US dollars, 2019 April
The essence of the violation: penalty for trade practice violations. The Alcohol and Tobacco Tax and Trade Bureau (The Alcohol and Tobacco Tax and Trade Bureau) said in a press release that Heineken distributed its proprietary BrewLock brewing systems to retailers free of charge and reimbursed other retailers for the cost of purchasing the systems. The refunds were disguised as unrelated credit card charges.
Because BrewLock is a Heineken proprietary or custom bottling system that only works with Heineken-specific kegs, the TTB argued that the system mandated and encouraged retailers to buy only Heineken products. The TTB alleged that Heineken paid bonuses to retailers for placing barrels and disguised these illegal payments as payments for authorized activities, such as sampling test production, that never actually occurred. The TTB also alleged that Heineken used third-party services to pay additional bonuses to retailers.
7th place
Craft Beer Guild (2000+ brands)
The amount of the fine: 2.6 million US dollars, 2018
The essence of the violation: the company was caught paying Boston bars to stock/buy its beer. An investigation by the Massachusetts Alcoholic Beverage Control Commission (ABCC) found that distributor Craft Brewers Guild of Everett operated a so-called “pay-to-play” scheme for at least five years in violation of state alcohol regulations. Its sales representatives and managers regularly gave Boston bars and restaurant companies thousands of dollars in illegal bonuses in exchange for restocking Craft Brewers Guild beer and pushing out rival wholesalers.
6 place
Diageo (Guinness, Captain Morgan, Smirnoff, 200+ brands)
The amount of the fine: 5 million US dollars, 2020
The essence of the violation: The US Securities and Exchange Commission (SEC) said Diageo North America pressured its customers (retailers) to buy more products than they needed for two years in order to report higher sales and operating profit growth to shareholders. According to the SEC, this behavior did not create sustainable growth and led to a “misleading picture of the company’s financial performance and its ability to meet key performance indicators,” which in turn distorted the stock’s value in the market. As a result, distributors in North America had a lot of unnecessary inventory, continued overselling was unsustainable because distributors were likely to buy less product in future periods, and Diageo failed to disclose these known trends and uncertainties to investors in its periodic filings, the SEC said.
5th place
Anheuser-Busch InBev (Corona, Budweiser, Stella Artois, 500+ brands)
The amount of the fine: 6 million US dollars, 2016
The essence of the violation: the company used third-party sales promoters and illegally paid bribes to Indian officials to increase sales and production in that country. The ruling alleges that Anheuser-Busch InBev repeatedly ignored employee complaints, failed to properly implement internal accounting controls to detect and prevent improper payments, and failed to ensure that transactions with vendors were properly recorded on the books.
In addition, the US Securities and Exchange Commission (SEC) found that the company fired an employee who reported the bribery in an attempt to prevent him from further voluntarily communicating with the SEC regarding possible Foreign Corrupt Practices Act Act, FCPA) violations, due to the large financial penalty that would be imposed for severe non-disclosure violations.
4 place
Bordeaux (Bordeaux wine is produced by more than 5,660 producers or châteaux. There are 65 appellations of Bordeaux wine)
The amount of the fine: 7.8 million euros, 2016
The essence of the violation: to be punished, because in several large shopping centers cheap wine was sold as more expensive Bordeaux. The owner of A château in Bordeaux, which also sells wine, has been arrested for allegedly leading a gang that distributed thousands of liters of cheap wine to supermarkets masquerading as mid-range Bordeaux. The case began to be examined in 2012, when customs officials found more than 800,000 items in Marret’s cellars. liters of allegedly adulterated wines that mixed entry-level wines with prestigious Saint-Émilion, Pomerol and Listrac-Médoc wines.
3 place
Molson Coors (Coors Light, Miller Lite, Leinenkugels, 100+ brands)
The amount of the fine: 9.5 million US dollars, 2023
The essence of the violation: California Federal District Judge William H. Orrick preliminarily approved $9.5 million. $500,000 settlement in a class-action lawsuit involving Molson Coors’ line of Vizzy Hard Seltzers. The lawsuit alleges that Molson Coors sought to capitalize on increased consumer interest in healthy foods and beverages and misled consumers. The lawsuit alleges that Vizzy’s claims that it contains “antioxidant vitamin C from the superfruit acerola” are “misleading,” according to Law360. Although the product, launched in 2020, does indeed contain acerola cherries, the health claims promoting the consumption of alcoholic products are very much against the Alcohol and Tobacco Tax Trade Bureau (TTB) regulations.
2 place
Anheuser-Busch InBev (Corona, Budweiser, Stella Artois, 500+ brands)
The amount of the fine: 225 million US dollars, 2019
The essence of the violation: punished for antitrust violations – the company did not allow the import of cheaper beer from the Netherlands to Belgium. “Consumers in Belgium have been paying more for their favorite beer as a result of AB InBev’s deliberate strategy to limit cross-border trade between the Netherlands and Belgium,” said EU Competition Commissioner Margrethe Vestager. The Commission said AB InBev’s strategy included changing the packaging of some Jupiler beer distributed to Dutch retailers and wholesalers, such as removing information in French from the labels. This made it difficult to sell beer in Belgium.
The company also limited the amount of Jupiler to Dutch wholesalers to prevent imports into Belgium, and refused to sell some of its products to retailers unless they agreed to limit imports of Jupiler beer from the Netherlands to Belgium. Another anti-competitive tactic was to prevent Dutch retailers from offering buyer beer promotions to their customers in Belgium.
1 place
Pernod Ricard (Jameson Irish Whiskey, Ballantines, Absolut Vodka, ~240 brands)
The amount of the fine: 244 million US dollars, 2022
The essence of the violation: to be punished for bribing Prime Minister Narendra Modi and his tax officials/officers to resolve disputes related to the assessment of alcohol imports. 2009-10-2020-21 audited by the Indian authorities. import invoices and found that Pernod Ricard India had understated the value of alcohol concentrates in its declarations, resulting in lower import duties being paid.
Let’s develop business honestly and compete by offering better products that better meet customer needs, rather than using illegal methods. Those who cheat are caught sooner or later.
2024-04-12 01:12:42