The Alcohol and Tobacco Tax and Trade Bureau (TTB) has accepted an $850,000 offer in compromise from Chicago-based Lakeshore Beverage’s RN Acquisition LLC and City Beverage – Markham LLC for alleged trade practice violations from 2014 through the present.
The TTB’s allegations against Lakeshore Beverage’s outposts include:
- Violating the Federal Alcohol Administration (FAA) Act’s tied house prohibition, by inducing a retailer to purchase their malt beverages over competing brands by paying sponsorship money to a third-party concert promotion company commonly owned and/or managed by the retailer’s owner and/or manager;
- Violating the FAA Act’s tied house and exclusive outlet prohibitions by paying or reimbursing another industry member as part of a scheme to induce a multi-purpose venue retail concessionaire to purchase their malt beverages and exclude competing brands through a venue sponsorship, and by providing various trade items to the retail concessionaire;
- Violating the FAA Act’s tied house prohibition by providing various trade items to a retailer at below-market value, which induced the retailer to purchase their malt beverages to the exclusion of competitor brands;
- And operating without a basic permit at one of its warehouses.
The TTB reiterated that it remains “committed to ensuring a level playing field for law abiding businesses and to stopping anti-competitive practices that prevent consumers from enjoying a wide selection of products.”
Nebraska Liquor Bill Would Create New Bev-Alc Category
An omnibus liquor bill is making its way through the Nebraska Legislature that would tweak several of the Cornhusker State’s liquor laws, including creating a new category of alcoholic beverages, according to the Unicameral Update, the state Legislature’s official news source.
Among the changes LB274 would bring about: The creation of a new category of alcoholic beverage — essentially ready-to-drink, spirits-based cocktails below 12.5% ABV in their original packages — which would be taxed at $0.95 a gallon, rather than the $3.75 per gallon RTD canned cocktails would otherwise be taxed.
The bill would appear to be one example of why Boston Beer Company founder Jim Koch is urging beer industry trade groups to fight against tax rate equalization efforts pushed by spirits groups.
Other measures within the bill would allow farm wineries, craft breweries and micro-distilleries to apply for a special license that would allow them to sell their products at farmers markets for one year, the outlet reported.
The bill was placed on final reading on April 8. The Nebraska Legislature is expected to adjourn on June 10.
Alcohol Delivery Signed into Law in Alabama
Alabama Gov. Kay Ivey has signed a bill (S.B. 126) into law allowing delivery of beer, wine and spirits, starting October 1, according to The Birmingham News.
Grocery stores, independent package stores, wineries, distilleries, breweries and restaurants interested in offering alcohol delivery would need to submit an application to the state’s Alcoholic Beverage Control Board and pay fees of a couple of hundred dollars. Businesses approved to offer delivery would be allowed to use their own employees or third-party services to execute deliveries so long as the delivery driver is at least 21 years old. Customers must also show an ID proving they are of legal drinking age.
The law limits stores offering delivery to a 75-mile radius of their establishment. Deliveries must take place within a 24-hour window, and would only be allowed to take place during hours in which alcoholic beverages can be legally sold.
Packaged beer cannot exceed the equivalent of 120 12 oz. containers per customer, while draft can be sold in line with ABC rules but cannot exceed 288 oz. per customer.
Alcohol deliveries from restaurants must be accompanied by a meal.
Missouri Judge Gives Approval to Sale of Kona’s Hawaii Operations
The last piece of approval in Craft Brew Alliance’s divestment of Kona Brewing’s operations in Hawaii to private equity firm PV Brewing, in an effort to gain regulatory approval of its $220 million merger with Anheuser-Busch InBev, came from a federal judge in Missouri this week, according to Law 360.
The “final judgment” seemed like a foregone conclusion after the U.S. Department of Justice (DOJ) shrugged off antitrust concerns expressed by the attorney general of Hawaii and Maui Brewing Company last month.
The DOJ determined that the required divestiture of CBA’s Kona Hawaii business to to PV Brewing Partners — the investment firm made up of former A-B president Dave Peacock and Overland Park, Kansas-headquartered VantEdge Partners — provides “an effective and appropriate remedy for the antitrust violation alleged in the complaint and is therefore in the public interest.”
In signing the final judgment this week, U.S. District Judge Stephen R. Clark wrote that the divestiture “is in the public interest.”
SweetWater Notes from Aphria’s Q3 Earnings
Five months after acquiring Atlanta’s SweetWater Brewing, Ontario-headquartered Aphria reported performance of the brand during its third quarter earnings report.
For the 12-month period ending February 28, 2021, SweetWater sold about 220,000 barrels of product, the company reported.
According to Aphria, SweetWater has contributed $15.689 million CAD ($12.5 million USD) to its revenue since the completion of the transaction on November 25, 2020.
For the three months ending February 28, Aphira’s alcoholic beverage business generated $14.808 million CAD ($11.8 million USD) in net revenue.
However, Aphria missed overall revenue expectations for the quarter, with $153.6 million CAD ($122.6 million USD) in net revenue, up 6.4%. The company reported a net loss of $366.8 million CAD ($292.7 million) in Q3.
In other Aphria news, the company is now closer to finalizing its merger with Tilray, after a revision of the latter company’s bylaws, according to MarketWatch.