The Corruption Chronicles – Volume One: A New Hope

A new publication has emerged on the industry scene, and it promises to be one of the most useful resources we have seen in a long time – Spirited Magazine (the website for the new magazine is www.spiritedbiz.com. There is another site for an old publication called spirited magazine.  Don’t confuse the two). Spirited crosses beverage types (wine, beer, spirits, cider and mead), looks at issues common to all licensed producers, wholesalers and retailers of all beverages and tries to make sense of it all.  We now live in a world where the large and small winery, brewery and distiller are all competing, and are all facing the same marketing and regulatory challenges. 

Many of our clients in each space are involved with other alcoholic beverage products and, as a result, are now experiencing first-hand the fundamentally inconsistent regulatory treatment of the different products.  Something legal for wine is unlawful for beer, something legal for spirits is unlawful for wine, and so forth.  It creates a very frustrating dynamic not only for the industry member but for the regulator who, let’s face it, has a very difficult job.  To add to the chaos, every state is a regulatory island unto itself.  That means national and regional marketing and other programs have to be carefully vetted against multiple different laws and regulations, and narrowly tailored to comply with the strictest.

The challenge with cross-involvement is that while most of the regulatory rules of the road (including licensing, distribution, marketing, event privileges and consumer sale privileges) are different for each beverage type, the penalties for violation of the historic “tied-house” laws, which apply to all beverage types, are almost identical and are often draconian.  We talked to the Spirited Magazine founders about this and the response from us will be the “Corruption Chronicles” – a series of tales of actual violations (and the lessons to be learned from each) published on an occasional basis in Spirited, and republished on Booze Rules for the edification of our friends and colleagues.

Volume One can be found here. Volume Two will be in the next edition of Spirited.

The point of the Chronicles is to illustrate the types of actual violations that regulators in California and around the country are pursuing. Bribery of retail accounts, smuggling of alcohol from one jurisdiction to another to evade taxes, suppliers managing retail account liquor departments and choosing what products the retailer will buy and in the process shutting out their competition; these are all examples of corrupt activities that impact the marketplace, threaten fair competition and justify vigorous regulatory responses.

But, and this is the big BUT, where is the line between clean competition and corrupt activity? When does an innocent act or agreement cross the line?  Is intent required (sometimes yes, sometimes no). Does the “everyone else is doing it” defense ever work? Those are the questions the Corruption Chronicles will explore.  Welcome to the world of Hinman & Carmichael LLP!

  1. The TTB Crusade Against Small Producers and the “Consignment Sale” Business Model
  2. TTB Protocols, Procedures, and Investigations
  3. Wine in a 250 ML can – the Mystery of the TTB packaging Regulations and Solving the Problem by Amending the Regulations
  4. The Passing of John Manfreda of the TTB: a Tragedy for his family and a Tragedy for the Industry he so Faithfully Served for so Long.
  5. Pride in a Job Well-done, or Blood Money? The Cost of Learning the Truth from the TTB about the Benefits to Investigators from Making Cases Against Industry Members
  6. How ADA Website Compliance Works – The Steps You Can Take to Protect Yourself, Your Website and Your Social Media from Liability
  7. Supplier and Distributor Promotional “Banks,” Third Party Promotion Companies and Inconsistent TTB Enforcement, Oh My!
  8. “A Wrong Without a Remedy – Not in My America” – The TTB Death Penalty for Not Reporting Deaths
  9. Is a 1935 Alcohol Beverage Federal Trade Practice Law Stifling Innovation?
  10. Decoding the BCC’s Guidance on Commercial Cannabis Activity.
  11. Prop 65 - Escaping a "Notice of Violation"
  12. TTB Consignment Sales Investigations - What is Behind the Curtain of the TTB Press Releases?
  13. Heads Up! The ABC Is Stepping Up Enforcement Against Licensees Located Near Universities
  14. Coming Soon: New Mandatory Training Requirements for over One Million “Alcohol Servers” In California – September 1, 2021 will be here quickly
  15. 2019 Legislative Changes for California Alcohol Producers – a Blessing or a Curse?
  16. A Picture (On Instagram) Is Worth A Thousand Words
  17. Playing by the Rules: California Cannabis Final Regulations Takeaways
  18. Hinman & Carmichael LLP Names Erin Kelleher Partner and Welcomes Gillian Garrett and Tsion “Sunshine” Lencho to the Firm
  19. Congress Makes History and Changes the CBD Game for Good
  20. Pernicious Practices (stuff we see that will get folks in trouble!) Today’s Rant – Bill & Hold
  21. CBD: An Exciting New Fall Schedule… or Not?
  22. MISSISSIPPI RISING - A VICTORY FOR LEGAL RETAILER TO CONSUMER SALES, AND PASSAGE OF TITLE UNDER THE UNIFORM COMMERCIAL CODE
  23. California ABC's Cannabis Advisory - Not Just for Stoners
  24. NEW CALIFORNIA WARNINGS FOR ALCOHOLIC BEVERAGES AND CANNABIS PRODUCTS TAKE EFFECT AUGUST 30, 2018, NOW INCLUDING ADDENDUM REGARDING 2014 CONSENT AGREEMENT PARTIES AND PARTICIPANTS
  25. National Conference of State Liquor Administrators – The Alcohol Industry gathers in Hawaii to figure out how to enforce the US “Highly Archaic Regulatory Scheme.”
  26. Founder John Hinman Honored with the Raphael House Community Impact Award
  27. ROUTE TO MARKET AND MARKETING RESTRICTIONS - NAVIGATING REGULATORY SYSTEM CONSTRAINTS
  28. Alcohol and Cannabis Ventures: Top 5 Legal Considerations
  29. ATF and TTB: Is Another Divorce on the Horizon? What’s Going on with the Agency?
  30. STRIKE 3 - YOU REALLY ARE OUT! THE ABC'S STRICT APPLICATION OF PENALTIES FOR SALES TO MINORS
  31. TTB Temporarily Fixes Problem with Fulfillment Warehouse Tax Credits - an “Alternate Procedure” for Paying Taxes & Reporting
  32. CUSTOMERS WHO HAVE HAD ONE TOO MANY - THE FREE TRANSPORTATION DILEMMA
  33. The Renaissance of Federal Unfair Trade Practices - Current Issues and Strategies
  34. ‘Twas the week before New Year’s and the ABC is out in Force – Alerts for the Last Week of 2017, including the Limits on Free Rides
  35. Big Bottles, Caviar and a CA Wine Strong Silent Auction for the Holidays!
  36. The FDA and the Wine and Spirits Industry – Surprise inspections anyone?
  37. NORTHERN CALIFORNIA WILDFIRES: UPDATED REGULATORY AGENCY DISASTER RELIEF RESOURCES AT A GLANCE
  38. NORTHERN CALIFORNIA WILDFIRES: REGULATORY AGENCY DISASTER RELIEF RESOURCES AT A GLANCE
  39. Soon to come to your Local Supermarket– Instant Redeemable Coupons of the digital age!
  40. The License Piggyback Dilemma – If it Sounds Too Good to be True, it Probably is
  41. A timely message from our Florida colleagues on the tied house laws, the three-tier system and the need for reform
  42. ABC Declaratory Rulings – A Modest Proposal Whose Time has Come
  43. More on FDA Inspections - Breweries, Distilleries and Questions
  44. WHY THE FDA IS INSPECTING WINERIES
  45. Senate Bill 378—The Proposed Demise of Due Process for Alcohol Licensees
  46. ABC Enforcement - Trends and Predictions
  47. The Corruption Chronicles – Volume One: A New Hope
  48. New Alcohol Delivery Oversight on the Horizon
  49. Michigan: Canary in the DtC Coal Mine?
  50. California ABC and Federal Credit Laws – Active Enforcement and Lots of Questions!
  51. Big Bottles For The Holidays - The Highest Calling Of The Winemaker's Art
  52. FINAL COMMENTS TO TTB NOTICE 160 DUE ON WEDNESDAY DECEMBER 7TH – WE ARE ASKING THE TTB TO EXTEND THE COMMENT PERIOD AGAIN TO ALLOW FOR INDUSTRY NEGOTIATION AND ALIGNMENT OF INTERESTS
  53. SONOMA COUNTY WINERY USE PERMITS, EVENT RESTICTIONS AND DTC
  54. New TTB Labeling Requirement Regulations: Out-of-State Bottling Is Not Created Equal and Consumers Right to Know Where the Grapes in their Wine Come from is Compromised
  55. Isn't A Written Agreement With A Distributor Worthless In A Franchise State?
  56. Crowd Funding for Alcohol Producers and Retailers – Down the Rabbit Hole with the Tied House laws
  57. Everything you ever wanted to know about the BPA Warning Statement but were afraid to ask
  58. AB 2082 - A Hunting License for Police and a Lethal Weapon for Politicians that Deprives Licensees of Currently Available Due Process Rights
  59. “Better Late Than Never”-- Judge in Illinois Dismisses 201 Sales Tax Cases against Retailers
  60. The Day the Music Almost Died: The Story of the BottleRock ABC Accusations, the ABC Appeals Board and a Victory for a Common Sense Interpretation of the Tied House Laws
  61. The Arsenic in Wine Class Action Dismissal – what it means
  62. Counterfeit or Artisanal Mexican Spirits? Pick your Poison, or your lime wedge
  63. Warning - CA ABC enforcement teams are on the prowl this weekend!
  64. RELIEF AT LAST! ILLINOIS MOVES TO FIX THE SALES TAX LAWSUITS AGAINST OUT-OF-STATE SELLERS BUT PROPOSES TO PENALIZE WINERIES AND RETAILERS THAT SHIP WITHOUT PERMITS
  65. The TTB Speaks on Category Management or, be Careful What you Ask for Because you might Get it!
  66. Hinman & Carmichael LLP Announces the Addition of Jeremy Siegel to its team of top beverage law lawyers
  67. 2016 LEGISLATIVE UPDATES: Part IV
  68. 2016 LEGISLATIVE UPDATES: Part III
  69. 2016 LEGISLATIVE UPDATES: Part II
  70. 2016 LEGISLATIVE UPDATES: Part I
  71. Hinman & Carmichael LLP is Hiring!
  72. John Hinman Presents NBI Webinar on Basics of Alcohol Beverage Law
  73. ABC DISMISSES SAVE MART GRAPE ESCAPE ACCUSATION BUT REFUSES TO ADOPT JUDGE’S DECISION FINDING NO STRICT LIABILITY FOR ABC VIOLATIONS
  74. Speakeasies are still with us, and proliferating!
  75. The War for the Soul of Sonoma County – the Winery Working Group Battle
  76. Santa Claus isn’t the only one coming to town this Christmas!
  77. Arizona's Direct to Consumer Shipping Rules - An Exercise in Complexity
  78. AB 780 - Social Media and the ABC: The California Legislative “Fix” that Fails
  79. Illinois Finally Offers Certainty and Relief for Victims of Sales Tax Lawsuits, but Prompt Action is Required in Pending Cases
  80. A Modest Proposal – Adopt the federal rule on Tied-House liability in California
  81. The Grapes Escaped - Why the First Amendment Matters
  82. Appellate Court Ruling Strikes Blow Against State’s Arbitrary Beer Label Ban
  83. Illinois Attorney General's Office Announces Intention to Dismiss False Claims Act Against Liquor Retailers
  84. Commercial Speech And Alcoholic Beverages - Part III
  85. Commercial Speech And Alcoholic Beverages - Part II
  86. Craft Beverages: Social Media Marketing the Effective and Compliant Way
  87. Commercial Speech And Alcoholic Beverages - Part I
  88. A LAYPERSON LOOKS AT ARSENIC IN WINE
  89. The Biggest Retailer in the World vs. the TABC
  90. Rebecca Stamey-White presents Emerging Issues in Wine Law
  91. Top Beverage Alcohol Law Firm Adds and Elevates Partners
  92. Illinois Qui Tam Lawsuits—Private Enforcement Of a State Claim: A Bonanza For A Plaintiff’s Lawyer And A Rip-Off Of Retailers
  93. BOOZE RULES OF SOCIAL MEDIA: The Retailer Right to Pay Exception
  94. LIONS AND TIGERS AND TWEETS, OH MY!
  95. AB 2004: Brewer's Incremental Parity with Wine Makers
  96. Expanding, Proud Of It, and Wanting to Tell the World
  97. DC Weighs in Strongly on Third Party Marketer Delivery Services
  98. “Visual Links” between Beer, Wine and Spirits Labels and Retailers Ruled Unlawful in California — the tied house laws run amok
  99. Hard Cider Legislative Update
  100. New Marketing Model for New York – Lot 18 and the NYSLA