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The Federal Alcohol and Tobacco Tax and Trade Bureau (TTB) Accepted a $2.5 Million Offer in Compromise from Heineken USA Incorporated for alleged violations of the exclusive outlet and tied house provisions of the Federal Alcohol Administration (FAA) Act.
So what happened here? It appears that the TTB investigated actions by Heineken in the states of Florida, Washington and New York which pertained to providing retailers with BrewLock draft systems at not no charge, and reimbursing retailers for the cost of purchasing BrewLock draft systems.
According to the TTB, “Reimbursements were disguised as unrelated credit card charges (also known as swipes.) Because BrewLock is a patented draft system developed by or for Heineken that only works with specially-designed kegs used by Heineken, TTB alleges that the system both obligated and induced the retailers to exclusively purchase Heineken products. TTB alleges that Heineken made slotting fee payments to retailers and disguised those unlawful payments as payments for permissible activities (such as consumer sampling) that never actually occurred. TTB also alleges that Heineken used third parties to pay for additional slotting fees to retailers.”
$2.5 million…ouch. To learn a bit more about the tied house and 3-tier laws pertaining to beer in Tennessee, see our previous blog post on the subject HERE. Please do not hesitate to contact us with an questions pertaining to alcoholic beverage laws or issues that your business may be facing.
Last modified: April 15, 2019
