New York Settles Wine Issues

Filed in archive Wine News on November 1, 2006

Fifteen wine and liquor suppliers have finally come to an agreement with the state of New York. The laws governing sales of alcohol really vary.

So funny...just yesterday we had a shipment of wine come to the house. It was in my husband's name, but I was home to sign for it. The guy was like, "Were you born before 1984?"

After I hugged the man, I got my wine. But, here's more on the wine selling issues from New York according to the Democrat and Chronicle:

Fifteen national suppliers of wine and liquor, including Perinton-based constellation Brands, have paid $2.3 million to settle an investigation into the use of rebates and gifts to obtain preferential treatment from retailers and restaurants, officials said Monday.

Attorney General Eliot Spitzer, the Democratic candidate for governor, announced the settlement Monday. Liquor wholesalers reached a similar settlement two months ago.

Under the agreement, some of the largest suppliers operating in New York, including such well-known brands as Gallo, Bacardi and Jim Beam, agreed to ban the use of preferential discounts, rebates, allowances, cash and gifts to buy favor for their products.

The incentives, which Spitzer said totaled $9 million from 2003 through 2005, went to some of the biggest retailers.

The incentives violate provisions of the state Alcohol Beverage and Control Law aimed at making sure such inducements don't affect marketing decisions. To skirt the law, retailers set up display and advertising companies to accept payments from suppliers and wholesalers, Spitzer said.

In the settlement, suppliers agreed not to subsidize marketing schemes orchestrated by wholesalers.

Some suppliers contacted Monday did not respond to requests for comment, but Banfi Products Corp. said it had cooperated fully with the investigation.

"Banfi is pleased the business environment has changed in accordance with the law, and that all industry members will conduct their efforts on a level playing field," the company said.