Boston Beer subsidiary fined $1m for over $24m worth of unregistered sales

American Craft Brewery, a subsidiary of Boston Beer Company, has been fined US$975,000 after selling over $24 million worth of unregistered beer and malt beverages in New York state, including varieties of the Angry Orchard, Twisted Tea, and Sam Adams brands.

The State Liquor Authority (SLA) announced yesterday (31 May) that it had accepted a conditional no contest offer from American Craft Brewery to settle charges brought against it.

Sales of the unregistered products, which are said to have been without legally required brand label registrations, amounted to 1.4 million cases worth over $24 million. The offer of $975,000 from American Craft Brewery was presented at a meeting of the SLA board on 30 May.

The issue was first brought to light in February 2016 when a SLA permits supervisor found that American Craft Brewery had only registered one of its products (Twisted Tea Summer Blueberry) for sale within the state. After issuing a formal letter to parent company Boston Beer in the same year, officials from the brewing company informed the SLA that they were in the process of submitting paperwork for their other brands.

However, in early 2018, the forms still hadn’t been filed, prompting the SLA to launch an investigation which found that 1.4 million cases of unregistered products were being sold in New York state last year, including the Angry Orchard, Twisted Tea, and Sam Adams brands.

SLA chairman, Vincent G. Bradley, said, “Whether you are a small farm brewer in Clinton County, or a major international public company, you have to comply with the rules and the laws of New York. I am thankful for the hard work of our enforcement and licensing teams, who work tirelessly to ensure that New York remains an innovative and competitive place to manufacture and sell beer, but also is a place where the marketplace is safe for the consumer”.

Beer and malt drinks sold in New York state must receive brand label approval from the SLA prior to sale. The SLA states these conditions help to guard against “false or deceptive product information” and safeguard the consumer against “‘knock-off’ or bootleg alcohol”. They also allow products to be easily tracked in the event of a recall.

A spokesperson for Boston Beer blamed the blunder on a “clerical error” and added that the company was working with the SLA to “renew the lapsed registrations”.

One Response to “Boston Beer subsidiary fined $1m for over $24m worth of unregistered sales”

  1. Lew Bryson says:

    “Beer and malt drinks sold in New York state must receive brand label approval from the SLA prior to sale. The SLA states these conditions help to guard against “false or deceptive product information” and safeguard the consumer against “‘knock-off’ or bootleg alcohol”. They also allow products to be easily tracked in the event of a recall.”

    Nonsense. There is no significant problem with “knock-off or bootleg alcohol” in the first place, and certainly none with beer. And no, that doesn’t prove registration is working, it simply proves that NY excise taxes (and US excise taxes in general) are reasonable enough that they don’t encourage smuggling. As for products being easily tracked for a recall, I’d refer you to the issue Boston Beer itself had with possible glass shards in bottles in 2008. The time from the first report of the issue to BBC issuing a public statement: under 24 hours. Recall of the affected bottles began immediately. Action by ANY state connected to brand registration or not: nil, zip, nothing. They didn’t have to do anything, and they clearly were not set up for it.
    Brand registration has zero benefit for the consumer. It is a source of fee revenue for state alcohol agencies — a tax by another name that very few know about — and it is a state-run tool for insuring wholesaler exclusivity.
    This is a fossil of Repeal, and it should be done away with.

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