Press Clips: TTB Begins Pay-to-Play Investigation in Miami; Craft Brewers Adopt Independence Seal

The Alcohol and Tobacco Tax and Trade Bureau (TTB), together with the Florida Division of Alcoholic Beverages and Tobacco (ABT), last week initiated a joint investigation into alleged “pay-to-play” schemes throughout greater Miami.

In a press release, the TTB called it “the largest trade practice enforcement operation” in its history, but it did not identify the subject or subjects of the inquiry.

“TTB takes its responsibility to actively enforce a level playing field very seriously and appreciates this opportunity to work together with our law enforcement partners in Florida to ensure that existing industry members and smaller businesses just entering the marketplace can compete based on customer service and consumer preference rather than on their ability to buy shelf space,” the bureau wrote in the release.

This is the fourth significant instance of pay-to-play — the prohibited practice of inducing retailers to stock certain beer products by providing unfair discounts or items of substantial value — to make headlines in the last nine months (two of those involved distributorships owned by Sheehan Family Companies).

In June, Hunterdon Brewing Company, a Sheehan Family Companies subsidiary, reached a $2 million settlement for various trade practice violations, including sales of draft beer equipment below fair market prices. The wholesaler reportedly hid the charges by “mislabeling” invoices.

In May, August A. Busch & Co. of Massachusetts, a beer distribution company wholly-owned by Anheuser-Busch, was charged with giving away $1 million of Budweiser-branded coolers and draft equipment to bars and liquor stores.

In March, California’s Department of Alcoholic Beverage Control reached a $400,000 settlement with Anheuser-Busch LLC wholesalers and a $10,000 settlement with Orange County’s Straub Distributing Company for similar violations.

And last November, the TTB announced it had accepted a $750,000 payment from Massachusetts-based Craft Beer Guild LLC, a subsidiary of Sheehan Family Companies, for violating state and federal laws that prohibit illegal inducements. That sum was the “largest offer in compromise” that the agency had ever recovered from a single industry member for trade practice violations.

Thousands of Indie Brewers Adopt BA Seal

The Brewers Association (BA) last week announced that more than 1,250 brewing companies, representing more than 1,500 brewing locations and collectively producing about 50 percent of the U.S. craft beer volume, had signed licensing agreements to use the organization’s new seal denoting “independence.”

The BA unveiled the badge last month and offered its use, for free, to any brewer who meets the group’s definition of a craft brewer (small, independent and traditional), who has a valid TTB brewer’s notice and who signs the BA’s licensing agreement.

One notable early adopter of the seal is Dogfish Head Craft Brewery.

Founder Sam Calagione wrote on his company’s website that he hopes thousands of craft brewers follow suit, to “give this shield power and integrity as we continue to create, cultivate and preserve the entrepreneurial and independent spirit that craft brewing was built on.”

“We think this is important because the identity and integrity of the craft brewing community have come under attack in recent months and years as certain global brewing conglomerates attempt to influence and blur the lines between their brands and those that continue to deliver innovation, imagination and community investment here in America,” he wrote.

Beer Still Alcoholic Drink of Choice in U.S.

Beer remains the most popular alcoholic drink among Americans, despite its ongoing battle for share with wine and spirits. Forty percent of Americans who consume alcohol say they prefer beer over wine (30 percent) and liquor (26 percent), according to a recent Gallup Poll of consumption habits.

Beer is most popular among men, with 62 percent of male consumers saying they choose beer, according to the poll conducted between July 5-9. Beer is also most popular among “less-educated and middle-income Americans,” according to Gallup.

Only 19 percent of female consumers said beer was their drink of choice. Wine was the preference of 50 percent of female consumers, compared to 11 percent of their male counterparts.

Overall, 62 percent of Americans say the consume alcohol at least occasionally. This is in line with the 63 percent historical average in Gallup’s survey, dating back to 1939.

Gallup concluded: “Americans are about as likely to consume alcohol as they have been for the past eight decades.”

Sons of Famous Fathers Start Barrels & Sons Brewery

Forbes recently profiled Barrels & Sons Brewery, a Napa California-based brewery launched last year by Carlo Mondavi (son of vintner Tim Mondavi and grandson of Robert Mondavi), Jacob Busch (son of Peter W. Busch and grandson of August Busch Jr.) and Elliott Taylor (the son of restaurant builder Ronald Lee Taylor).

The three sons of famous fathers plan to produce about 2,000 barrels in 2017, while focusing on production of a single pilsner beer.

Mondavi said the trio’s goal is to make “one classic beer.”

“We just wanted to create one great pilsner to sit with the world’s finest,” Busch added. “Other beer houses want to create their light, their darker, their porters, their stouts. We wanted to focus on creating the best pilsner.”

The three plan to build a two-story location in downtown Napa for beer and food pairings and forecast production of 15,000 barrels of beer annually. The eventual plan is to outsource production to breweries across the U.S. in order “to keep the brew as fresh as possible,” Taylor told the outlet.

Read the full profile here.

Narragansett Featured at White House ‘Made in America’ Showcase

President Donald Trump’s Made in America product showcase at the White House last week featured beer from Narragansett Brewing Company, which was selected to represent the state of Rhode Island at the soiree.

Narragansett president Mark Hellendrung told the Boston Globe that he pondered whether to accept the invitation and ultimately decided to send his lager due to his support for American-made products.

“Let’s just honor the White House and being at the White House, and these great other American-made products,” he told the outlet. “It was something we considered long and hard and it wasn’t necessarily easy.”

Narragansett announced plans to return some of its production to its home state of Rhode Island in April 2016, and now brews various offerings at “The Guild” in Pawtucket.

MillerCoors Moves Creative Work to DDB Chicago

A month after moving Miller Lite’s digital accounts to DDB Chicago, MillerCoors announced that it would be shifting all of the creative for the domestic premium beer to the advertising agency, officially ending its relationship with 180LA.

“DDB has made great strides on the digital side of the Miller Lite business over the last month, and we feel confident that this expanded team will keep the brand on its positive trajectory,” MillerCoors CMO David Kroll wrote in an internal memo (via Ad Age). “In an increasingly competitive industry, it’s crucial that we reward agency partners that share our commitment and vision for the future. We have the right brand purpose, the right brand world and the right creative to bring it all together. Now we have the right team in place to capitalize on the opportunity in front of us.”

Additionally, MillerCoors announced that it will transfer the global creative for Miller Genuine Draft to Adam & Eve, DDB’s London-based agency.

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