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. TTB Consignment Sales Investigations - What is Behind the Curtain of the TTB Press Releases?
  2. Heads Up! The ABC Is Stepping Up Enforcement Against Licensees Located Near Universities
  3. Coming Soon: New Mandatory Training Requirements for over One Million “Alcohol Servers” In California – September 1, 2021 will be here quickly
  4. 2019 Legislative Changes for California Alcohol Producers – a Blessing or a Curse?
  5. A Picture (On Instagram) Is Worth A Thousand Words
  6. Playing by the Rules: California Cannabis Final Regulations Takeaways
  7. Hinman & Carmichael LLP Names Erin Kelleher Partner and Welcomes Gillian Garrett and Tsion “Sunshine” Lencho to the Firm
  8. Congress Makes History and Changes the CBD Game for Good
  9. Pernicious Practices (stuff we see that will get folks in trouble!) Today’s Rant – Bill & Hold
  10. CBD: An Exciting New Fall Schedule… or Not?
  11. MISSISSIPPI RISING - A VICTORY FOR LEGAL RETAILER TO CONSUMER SALES, AND PASSAGE OF TITLE UNDER THE UNIFORM COMMERCIAL CODE
  12. California ABC's Cannabis Advisory - Not Just for Stoners
  13. NEW CALIFORNIA WARNINGS FOR ALCOHOLIC BEVERAGES AND CANNABIS PRODUCTS TAKE EFFECT AUGUST 30, 2018, NOW INCLUDING ADDENDUM REGARDING 2014 CONSENT AGREEMENT PARTIES AND PARTICIPANTS
  14. National Conference of State Liquor Administrators – The Alcohol Industry gathers in Hawaii to figure out how to enforce the US “Highly Archaic Regulatory Scheme.”
  15. Founder John Hinman Honored with the Raphael House Community Impact Award
  16. ROUTE TO MARKET AND MARKETING RESTRICTIONS - NAVIGATING REGULATORY SYSTEM CONSTRAINTS
  17. Alcohol and Cannabis Ventures: Top 5 Legal Considerations
  18. ATF and TTB: Is Another Divorce on the Horizon? What’s Going on with the Agency?
  19. STRIKE 3 - YOU REALLY ARE OUT! THE ABC'S STRICT APPLICATION OF PENALTIES FOR SALES TO MINORS
  20. TTB Temporarily Fixes Problem with Fulfillment Warehouse Tax Credits - an “Alternate Procedure” for Paying Taxes & Reporting
  21. CUSTOMERS WHO HAVE HAD ONE TOO MANY - THE FREE TRANSPORTATION DILEMMA
  22. The Renaissance of Federal Unfair Trade Practices - Current Issues and Strategies
  23. ‘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
  24. Big Bottles, Caviar and a CA Wine Strong Silent Auction for the Holidays!
  25. The FDA and the Wine and Spirits Industry – Surprise inspections anyone?
  26. NORTHERN CALIFORNIA WILDFIRES: UPDATED REGULATORY AGENCY DISASTER RELIEF RESOURCES AT A GLANCE
  27. NORTHERN CALIFORNIA WILDFIRES: REGULATORY AGENCY DISASTER RELIEF RESOURCES AT A GLANCE
  28. Soon to come to your Local Supermarket– Instant Redeemable Coupons of the digital age!
  29. The License Piggyback Dilemma – If it Sounds Too Good to be True, it Probably is
  30. A timely message from our Florida colleagues on the tied house laws, the three-tier system and the need for reform
  31. ABC Declaratory Rulings – A Modest Proposal Whose Time has Come
  32. More on FDA Inspections - Breweries, Distilleries and Questions
  33. WHY THE FDA IS INSPECTING WINERIES
  34. Senate Bill 378—The Proposed Demise of Due Process for Alcohol Licensees
  35. ABC Enforcement - Trends and Predictions
  36. The Corruption Chronicles – Volume One: A New Hope
  37. New Alcohol Delivery Oversight on the Horizon
  38. Michigan: Canary in the DtC Coal Mine?
  39. California ABC and Federal Credit Laws – Active Enforcement and Lots of Questions!
  40. Big Bottles For The Holidays - The Highest Calling Of The Winemaker's Art
  41. 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
  42. SONOMA COUNTY WINERY USE PERMITS, EVENT RESTICTIONS AND DTC
  43. 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
  44. Isn't A Written Agreement With A Distributor Worthless In A Franchise State?
  45. Crowd Funding for Alcohol Producers and Retailers – Down the Rabbit Hole with the Tied House laws
  46. Everything you ever wanted to know about the BPA Warning Statement but were afraid to ask
  47. AB 2082 - A Hunting License for Police and a Lethal Weapon for Politicians that Deprives Licensees of Currently Available Due Process Rights
  48. “Better Late Than Never”-- Judge in Illinois Dismisses 201 Sales Tax Cases against Retailers
  49. 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
  50. The Arsenic in Wine Class Action Dismissal – what it means
  51. Counterfeit or Artisanal Mexican Spirits? Pick your Poison, or your lime wedge
  52. Warning - CA ABC enforcement teams are on the prowl this weekend!
  53. 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
  54. The TTB Speaks on Category Management or, be Careful What you Ask for Because you might Get it!
  55. Hinman & Carmichael LLP Announces the Addition of Jeremy Siegel to its team of top beverage law lawyers
  56. 2016 LEGISLATIVE UPDATES: Part IV
  57. 2016 LEGISLATIVE UPDATES: Part III
  58. 2016 LEGISLATIVE UPDATES: Part II
  59. 2016 LEGISLATIVE UPDATES: Part I
  60. Hinman & Carmichael LLP is Hiring!
  61. John Hinman Presents NBI Webinar on Basics of Alcohol Beverage Law
  62. ABC DISMISSES SAVE MART GRAPE ESCAPE ACCUSATION BUT REFUSES TO ADOPT JUDGE’S DECISION FINDING NO STRICT LIABILITY FOR ABC VIOLATIONS
  63. Speakeasies are still with us, and proliferating!
  64. The War for the Soul of Sonoma County – the Winery Working Group Battle
  65. Santa Claus isn’t the only one coming to town this Christmas!
  66. Arizona's Direct to Consumer Shipping Rules - An Exercise in Complexity
  67. AB 780 - Social Media and the ABC: The California Legislative “Fix” that Fails
  68. Illinois Finally Offers Certainty and Relief for Victims of Sales Tax Lawsuits, but Prompt Action is Required in Pending Cases
  69. A Modest Proposal – Adopt the federal rule on Tied-House liability in California
  70. The Grapes Escaped - Why the First Amendment Matters
  71. Appellate Court Ruling Strikes Blow Against State’s Arbitrary Beer Label Ban
  72. Illinois Attorney General's Office Announces Intention to Dismiss False Claims Act Against Liquor Retailers
  73. Commercial Speech And Alcoholic Beverages - Part III
  74. Commercial Speech And Alcoholic Beverages - Part II
  75. Craft Beverages: Social Media Marketing the Effective and Compliant Way
  76. Commercial Speech And Alcoholic Beverages - Part I
  77. A LAYPERSON LOOKS AT ARSENIC IN WINE
  78. The Biggest Retailer in the World vs. the TABC
  79. Rebecca Stamey-White presents Emerging Issues in Wine Law
  80. Top Beverage Alcohol Law Firm Adds and Elevates Partners
  81. Illinois Qui Tam Lawsuits—Private Enforcement Of a State Claim: A Bonanza For A Plaintiff’s Lawyer And A Rip-Off Of Retailers
  82. BOOZE RULES OF SOCIAL MEDIA: The Retailer Right to Pay Exception
  83. LIONS AND TIGERS AND TWEETS, OH MY!
  84. AB 2004: Brewer's Incremental Parity with Wine Makers
  85. Expanding, Proud Of It, and Wanting to Tell the World
  86. DC Weighs in Strongly on Third Party Marketer Delivery Services
  87. “Visual Links” between Beer, Wine and Spirits Labels and Retailers Ruled Unlawful in California — the tied house laws run amok
  88. Hard Cider Legislative Update
  89. New Marketing Model for New York – Lot 18 and the NYSLA
  90. Sweeping Changes in Proposed NYSLA Bill Include Expansion for Craft
  91. Minimum Resale Price Policies - How to Control Price-Cutters
  92. AB 2130 – Gloves Off?
  93. “Gluten-Free” Labels for Wine, Beer and Distilled Spirits. We’re Still Waiting.
  94. AB 1252: Sanitation Overkill?
  95. Growlers: Not Just for Beer Anymore
  96. California Legislative Roundup 2014
  97. Build It and They Will Come: Craft Products Get New Privileges in CA and TX
  98. AB 1128: Veto of the “Serve a Minor” Felony Penalty Bill, or How to Lose a Winery in One Sale
  99. California Grocers Association v. ABC, Part 2: California Appeals Court Vacates ABC’s Adoption of a Trade Advisory That Correctly Guided Licensee Conduct
  100. California Grocers Association v. ABC, Part 1: California Appeals Court Prohibits Alcohol Sales at Self-Check Out Stands