New York Imposes $3.5 Million Penalty Against Wine Wholesaler

The New York State Liquor Authority announced a $3.5 million civil penalty against Southern Glazers Wine & Spirits arising from an investigation into the wholesaler’s business practices in New York.  The NYSLA concluded that Southern had provided illegal gifts and services to retailers to induce them to carry Southern products in violation of state tied house restrictions, and that the wholesaler had engaged in discriminatory sales practices in violation of the state’s price posting regulations.

According to the NYSLA, Southern representatives engaged in a practice commonly called  “credit card swipes” where they would have the retailers charge their cards for a certain dollar amount, but not receive anything in return.  The result was a payment to the retailer that would lower the cost of products purchased from Southern and “incentivize additional purchases.”

This is yet another example of increased federal and state enforcement actions against “Pay to Play” and other tied house infractions that we have reported on over the past year.

Click on the link below to read the full NYSLA announcement: