Anheuser-Busch InBev is no stranger to paying massive sums in fines and penalties to the Alcohol and Tobacco Tax and Trade Bureau (TTB) in the U.S., when it comes to operating in its traditionally cutthroat manner. Still, even among the usual violations for the world’s largest beer company, cutting a $5 million check is nothing to sneeze at. That’s what AB InBev will be paying the TTB, as the result of an offer-in-compromise (OIC) that will resolve the latest round of alleged trade practice violations. It will be a new record; the largest OIC that the TTB has ever collected. The company’s importer and wholesaler permits were likewise briefly suspended in Littleton and Denver, Colorado.
Most of these particular, alleged trade practice violations are connected to the world of sports and entertainment sponsorships, where AB InBev was accused of a laundry list of illegal actions that are all very familiar to those of us who have been reading these stories for years, with many being the same exact types of illegal promotion the company has previously been fined for in bars and restaurants. The actions allegedly would have been in violation of the Federal Alcohol Administration Act, and occurred between July of 2016 and Dec. 2018.
Specific allegations included the following, and more:
— AB InBev was accused of creating sponsorship agreements with “various entities in the sports and entertainment industries” that required concessionaires to specifically stock AB InBev beer, and prohibited those concessionaires from also seeking out competitor’s brands.
— AB InBev was accused of providing free “fixtures, equipment and services,” including draft beer dispensing systems, on the grounds that the concessionaires exclusively purchase AB InBev products.
— AB InBev was accused of paying retailers for nebulous items such as “consumer samplings” that never took place, with such payments allegedly being the equivalent of bribes in exchange for stocking AB InBev products.
You can see more details in the full list of accusations here.
“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,” said the TTB in a press release.
It should be noted that even a $5 million fine, and AB InBev’s promise that new “strategic training initiatives” are in place, will be unlikely to prevent more instances of these practices occurring in the future. Being a global megalith, one can assume that the company simply operates with the knowledge that occasional large-scale fines and OIC agreements are part of its business model. In the eyes of the people running AB InBev, stamping out the competition will almost certainly always be a higher priority. Of course, that doesn’t stop the company’s spokesperson from claiming that AB InBev “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,” said the company’s statement. “We apply the same passion and rigor to our ethics and compliance standards as we do to brewing the country’s best-loved beverages.”
Good news, folks. AB InBev is applying the same level of passion to their ethics that they’re applying to their Strawberry Mojito Lime-A-Ritas! If that doesn’t make you feel like you’re in good hands, I can’t imagine what would.