The federal Alcohol and Tobacco Tax and Trade Bureau (TTB) has accepted offers in compromises from a pair of Midwestern beer wholesalers for entering into sponsorship agreements that “allegedly resulted in the unlawful exclusion of their competitors’ products,” the agency announced in its weekly newsletter.
Two unrelated investigations led to the receipt of a $225,000 offer in compromise from Doll Distributing LLC in Des Moines, Iowa, and a $225,00 offer in compromise from Robert “Chick” Fritz Inc. in Belleville, Illinois, the TTB said.
Documents on the TTB website detailed Doll’s alleged offenses, including violating the Federal Alcohol Administration Act’s tied house and exclusive outlet prohibitions.
According to the TTB, Doll entered into a sponsorship agreement, which it said “in part” controlled the distribution of malt beverage at Drake University’s Knapp Center during the 2018 and 2019 basketball seasons after negotiating an “official domestic beer sponsorship” with the athletic program.
Doll’s portfolio includes Anheuser-Busch InBev products, as well as a number of craft beer brands.
“One feature of the sponsorship agreements was that in exchange for $49,500, Doll Distributing LLC was the exclusive distributor of non-craft beer at the Knapp Center,” the TTB wrote. “It is TTB’s position that Doll Distributing LLC’s participation in the sponsorship excluded competitors, and therefore, violated the Federal Alcohol Administration Act’s tied house and exclusive outlet prohibitions.”
Additionally, the TTB said its investigation turned up “mobile beer carts that were provided free of charge and used exclusively to distribute Doll Distributing LLC products.” The TTB said it believes Doll’s payments to Drake violated the FAA Act’s tied house prohibition.
Drake University’s athletics department reported that it raked in more than $60,000 in revenue during its first year of alcohol sales in 2018, including selling more than 10,000 beers during the 2018-19 basketball season, WHO-TV 13 reported. That news report noted that Busch Light would join a menu of domestic beer brands that included Budweiser, Bud Light, Michelob Ultra and Busch NA, as well as A-B-owned Bon & Viv hard seltzer. Two craft beers were listed on the menu from Confluence Brewing Company in Des Moines.
The TTB accepted the offer in compromise from Doll on January 10.
UPDATE (January 14, 5:15 p.m. ET): The TTB has shared details of Robert “Chick” Fritz’s offer in compromise, which was accepted on December 16, 2021.
According to the TTB, Robert “Chick” Fritz entered into a sponsorship agreement around April 2017 that granted it control over the distribution of malt beverages at Liberty Bank Amphitheater in Alton, Illinois, during the 2017, 2018 and 2019 seasons, including its annual July 4 fireworks celebration.
Robert “Chick” Fritz paid $16,500 annually for the sponsorship, giving the wholesaler exclusive rights for malt beverage sales “at all locations and at all functions on the amphitheater property,” which the TTB alleged excluded all other beer distributors from supplying malt beverages to to the venue. The TTB said this constituted a violation of the FAA Act’s tied house and exclusive outlet prohibitions.
Robert “Chick” Fritz’s portfolio includes offerings from Molson Coors, Constellation Brands, Mark Anthony Brands and several craft beer brands.