Craft Brew News – 07/19/19

(courtesy of Brewbound) https://www.brewbound.com/

Heineken USA Agrees to Pay $1.25 Million Fine to Settle New York Trade Practice Violations

The New York State Liquor Authority (SLA) on Wednesday finalized a $1.25 million settlement agreement with Heineken USA Incorporated (HUSA) for 42 alleged violations of the state’s Alcoholic Beverage Control (ABC) law.

The New York fine comes three months after HUSA agreed to pay the largest offer in compromise ever — $2.5 million — to the Alcohol and Tobacco Tax and Trade Bureau (TTB) for alleged trade practice violations related to its proprietary “BrewLock” draft systems.

The federal investigation spurred the New York investigation, as the TTB notified the SLA last year that HUSA was allegedly providing retailers with BrewLock systems at no cost.

The BrewLock systems, according to both the SLA and TTB, are designed to only dispense Heineken products packaged in unique kegs, which subsequently induced retailers to purchase more products made by the global brewing company.

Through its investigation, the SLA determined that HUSA gave away more than 800 BrewLock systems, valued at about $500 each, from 2014 to 2015. Additionally, the SLA’s investigation found that Heineken attempted to conceal transactions involving its “Blade” kegerator device by using a third-party, Micro Matic, to incentivize retailers.

State Liquor Authority chairman Vincent Bradley said in a press release. “Whether you are small craft brewery or a major international company, you have to comply with the rules and laws of New York,” “Our agency remains committed to rooting out anti-competitive practices that artificially restrict consumer choice and place small manufacturers at a disadvantage.”

Heineken’s UK Pubs Under Investigation

Two weeks after announcing plans to sell off 150 pubs, Heineken’s Star Pubs & Bars chain is under investigation by the Pubs Code Adjudicator for allegedly requiring its publicans to overstock Heineken beer and its other offerings, according to The Guardian.

At issue is whether Heineken imposed unfair terms on tenants who tried to escape the so-called “beer tie,” which requires tenants to buy a certain amount of beer from their landlord, in this case, Heineken. If found to be in violation, the Dutch beer giant could face a fine of about $13.8 million, the outlet reported.

California Revises Definition of ‘Beer’

California Gov. Gavin Newsom signed a law Tuesday revising the definition of beer to include production using “honey, fruit, fruit juice, fruit concentrate, herbs, spices, and other food materials, as adjuncts in fermentation.” The law also says beer aged in empty wooden wine or spirits barrels is defined as “beer” and should “not be considered a dilution or mixture of any other alcoholic beverage.”

California beer companies were previously required to hold a wine making license in order to use fruit in the fermentation process, according to KSBW News. The clarification aligns state law with the existing federal law.

Michigan Brewers Push for Self-Distribution Increase

Michigan craft brewers are attempting to increase the state’s self-distribution cap to 30,000 barrels annually, according to Crain’s Detroit Business. Currently, state law limits self-distribution to 1,000 barrels a year, forcing those who exceed the cap to contract with a wholesaler.

Eastern Market Brewing co-owner Dayne Bartscht has started an online petition to garner support for the effort. So far, more than 3,000 people have signed the petition.

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