USA: Boston Beer subsidiary fined nearly US$ 1 million for unregistered sales

American Craft Brewery (ACB), a subsidiary of Boston Beer Company was imposed a fine of US$975,000 for selling unregistered products in New York state.  The state requires for all liquor, beer, wine products, and wine specialties within the state a Brand Label Registration.

A supervisor of the State Liquor Authority (SLA) found in 2016 that ACB had only registered one of its products for sale within the state. He informed Boston Beer about his findings and the company  promised to register also the other brands. When in early 2018, ACB and its parent company Boston Beer was still lacking the registration for its products, including varieties of the Angry Orchard, Twisted Tea, and Sam Adams brands, SLA launched an investigation which found that 1.4 million cases of unregistered Boston beer products were sold in 2017. In order to settle the case ACB made a conditional no contest offer of US$975,000, which was accepted on Thursday by the State Liquor Authority (SLA).

According to the SLA “the purpose of Brand Label Registration is to ensure that labels sold in New York are in compliance with both State and Federal labeling regulations and that the product in the container to which the label is attached is safe for public consumption.  Further, it is the purpose of Brand Label Registration to ensure that no deceptive health/benefit claims are present on the label.”

Critics see in the Brand Label Registration a hidden tax and a state-run tool for insuring wholesaler exclusivity.

As a direct respone to the recent case SLA chairman, Vincent G. Bradley, said, “Whether you are a small farm brewer in Clinton County, or a major international public company, you have to comply with the rules and the laws of New York. I am thankful for the hard work of our enforcement and licensing teams, who work tirelessly to ensure that New York remains an innovative and competitive place to manufacture and sell beer, but also is a place where the marketplace is safe for the consumer”.

 

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