SACRAMENTO-  In March 2017, the California Alcoholic Beverage Control (ABC) announced that it had reached a $400,000 settlement with Anheuser-Busch, LLC wholesalers and a $10,000 settlement with Straub Distributing Company LTD for their engagement in unfair marketing practices aimed at retail licensees. Additionally, approximately 34 retail licensees also received disciplinary sanctions levied against their ABC licenses for their related activities.

The settlements followed a year-long investigation that began in 2015 by ABC’s Trade Enforcement Unit.  ABC agents investigating the case found the wholesalers covered the cost of, or partially financed, refrigeration units, television sets and draught systems at retailers in the Southern California area, in violation of the law. When wholesalers provide prohibited things of value to retailers, it results in unfair marketplace advantages over other wholesalers.

Agents inspected more than 100 retail customers of Anheuser-Busch, LLC’s distributorships in Sylmar, Pomona, Carson (Beach Cities) and Riverside. They also found that Straub Distributing Company LTD, which distributes Anheuser-Busch products in Orange County, engaged in the activity as well.

“This was a job well done by ABC agents who enforce the state’s alcoholic beverage control laws,” said Kevin Highbaugh, president of California Alcoholic Beverage Control Agents (CABCA).  “There are strict ABC laws in place for a reason, this penalty will cause other companies to take notice and be sure to educate their employee about fair and unfair marketing practices.”

The settlement with Anheuser-Busch, LLC includes one of the largest penalty fines imposed in the history of ABC. As part of the settlement by Anheuser-Busch, LLC, the company must provide training to its current and newly hired employees regarding the administration of a rental or lease program of Anheuser-Busch, LLC refrigeration equipment by a company unit within the confines of law. Additionally, upon request by the Department, Anheuser-Bush, LLC, must provide evidence of the training. In exchange for suspension of $200,000 of the fine, Anheuser-Busch, LLC agreed to extend the conditions of discipline to all Anheuser-Busch, LLC wholesalers in the state. Failure to comply with the terms of the agreement may result in the imposition of the suspended penalty against any Anheuser-Busch, LLC wholesaler licensed by ABC.