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NY Wine and Liquor Suppliers Pay Big for Payoffs
Posted by perle0 on 2006-10-31 12:37:20
(5343 views) 
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[News]
[New York] |
| A group of 15 national suppliers of wine and liquor have paid $2.3 million to settle a New York investigation into illegal use of incentives to get retailers and restaurants to favor their beverages. Apparently, these alcohol mavens geve out $9 million in rebates, gifts, etc. between 2003 and 2005 alone to encourage stocking their beverages instead of someone else's. (That's $3 million a year, folks! And you wondered why you find the same wines no matter where you shop!) |
The use of such incentives can result in higher prices and limit choices for consumers, as store and restaurant owners only have so much room to store bottles. If your local giant Pour 'n' Gulp agrees to carry 10 popular national wines as a result of a few goodies, that's 10 lesser-known wines they will have room for.
Some of the largest suppliers agreed to ban the use of preferential discounts, rebates, allowances, cash and gifts to promote their products. In the settlement, suppliers agreed that they wouldn't subsidize illegal marketing schemes orchestrated by wholesalers. The suit involved brands such as Banfi, Diageo, Skyy Spirits, Bacardi USA, Brown-Forman Corp., Constellation Brands, E&J Gallo Winery, Future Brands, Absolut Spirits Co., Jim Beam Brands, Kobran Corp., Moet Hennessy USA, Pernod Ricard USA, Remy Cointreau USA, and Sidney Frank Importing Co.
In August, New York wholesalers made similar arrangements and paid $1.6 million to make up for their use of incentives.
Wesley Kinnear, attorney for Skyy Spirits, said the settlement would affect the way suppliers do business nationwide.
"People look to New York," he said. "It's very important in the wine and spirits world ... and Eliot Spitzer gets a lot of attention." |
More details. |
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