Three months after Heineken USA (HUSA) agreed to pay a USD 2.5 million record fine (inside.beer, 9.4.2019) to the federal Alcohol and Tobacco Tax and Trade Bureau (TTB), the company has now finalized another USD 1.25 million settlement agreement with the New York State Liquor Authority (SLA).
In both cases HUSA was accused of alleged violations of the Federal Alcohol Administration (FAA) Act for “unfair competition and unlawful practices,” between August 1, 2015, and March 26, 2019.
Spurred from the federal investigation, the SLA determined that HUSA gave illegally away more than 800 BrewLock systems, valued at about $500 each to bars and restaurants in the New York area. BrewLock is a patented draft system developed by or for Heineken that only works with specially-designed kegs used by Heineken. In addition, HUSA illegally used a third party to conceal a transaction with at least one retailer for a Heineken Blade draft beer system.
State liquor laws prohibit producers or distributors of alcoholic beverages from giving away anything of value to artificially incentivize sales.
On June 10, the New York SLA charged Heineken USA with 42 violations of the state Alcoholic Beverage Control (ABC) law, including thirty-two counts of providing illegal gifts and services and ten counts of failing to maintain adequate books and records.
“Whether you are small craft brewery or a major international company, you have to comply with the rules and laws of New York," Vincent Bradley, State Liquor Authority Chairman said in a media release. "Our agency remains committed to rooting out anti-competitive practices that artificially restrict consumer choice and place small manufacturers at a disadvantage.”