Anheuser-Busch InBev has agreed to pay a record $5 million offer in compromise (OIC) for alleged trade practice violations related to sports and entertainment sponsorships, the Alcohol and Tobacco Tax and Trade Bureau (TTB) announced today.
Additionally, A-B’s importer and wholesaler permits were suspended for two days in Littleton, Colorado, and four days in Denver.
“This $5 million OIC resolves any such alleged violations that may have taken place throughout the United States through July 2, 2020,” the TTB said.
The $5 million fine is the largest offer in compromise collected to date by the TTB, Thomas Hogue, a spokesperson for the federal agency, confirmed with Brewbound. A-B’s offer tops a $2.5 million fine collected last year from Heineken USA for alleged trade practice violations.
According to the TTB, the alleged violations of the Federal Alcohol Administration (FAA) Act occurred between July 1, 2016, and December 31, 2018. They included:
- “Entering into sponsorship agreements with various entities in the sports and entertainment industries requiring concessionaires and other retailers to purchase A-B’s malt beverages and prohibiting them from purchasing specific competitor brands;
- Inducing sports industry concessionaires to purchase A-B’s malt beverages by furnishing fixtures, equipment, and services;
- Reimbursing, through credit card swipes, retailers for the cost of installing malt beverage draft dispensing systems, thereby inducing them to purchase A-B’s malt beverages;
- Requiring retailers to purchase A-B’s malt beverages in return for such retailers’ use of equipment A-B furnished them free of charge or below market value;
- Using third parties (business entities and payment services) to provide money or things of value to retailers in exchange for placement of A-B’s malt beverages; and
- Paying retailers purportedly for items such as consumer samplings, when, in fact, the retailers did not receive the goods or services purportedly purchased, and such payments were actually for A-B product placement.”
“TTB remains committed to putting an end to anti-competitive practices that negatively impact law-abiding businesses and prevent consumers from enjoying a wide selection of products,” the TTB said in a press release.
In a statement, an A-B spokesperson said the company “has always maintained the highest standards of business integrity and ethics including working closely with regulators as we have done in this instance.”
“Our commitment to operating in full compliance with alcohol beverage laws and regulations includes regular reviews of our operations and we have recently implemented several enhancements to our compliance programs including a strategic training initiative, new communication tools, and leveraging data and analytics,” the spokesperson said. “We apply the same passion and rigor to our ethics and compliance standards as we do to brewing the country’s best-loved beverages.”
In its recommendation to accept the offer in compromise, the TTB said A-B cooperated with the investigation and has since created functions dedicated to ethics and compliance, as well as “new tools to maintain compliance” with the FAA Act.
A-B’s offer in compromise is the first the TTB has accepted with an alcohol manufacturer in 2020. The only other compromise struck this year was with Lake Erie Tobacco Company in Killbuck, New York, on January 28.