I am shocked, shocked I tell you. Such a moral company doing such naughty things.
Same Glazer that own the Tampa Bay Buccaneers and Manchester United football teams?
Unfortunately, this is just the tip of the iceberg as far as their dealings with retailers and restaurants.
routinely provide illegal gifts, either in the form of cash or goods, at favoured restaurants and retail establishments, running up large expenses
And everyone in the business knew it for years. So did the “authorities”. The problem with the governor is that he is a supremely astute politician who has surrounded himself with people just as shrewd, so they keep that kind knowledge until they need it. I have to assume that someone got the gov PO’d.
Silly Southern. All they had to do was make one more campaign contribution, or provide one more gift.
This is not silly (though I know you were being facetious). It’s disgusting. These are the guys who buy up votes to keep us from being able to ship wine. Their CEO needs to go to prison for a few years. Now there’s a silly idea.
Of course it’s disgusting Alan. The ugly truth is that those guys or people like them are in every state, doing the same thing. And it’s not only wine. That fine they’re paying is just a cost of doing business.
Sadly the $3.5M is just a slap on the wrist for a company of southern’s size …
I’m curious what the actual laws and limitations are. Does anyone have a pointer to them?
Not much of a penalty at all given the size of the company and the value of the business that they “bought” through illegal means…Glazer is still probably up $10s of millions from their practices. What they should have done is suspended Glazer’s license to sell in the state of NY for 60 days. Now that would have stopped future practices by all distributors cold and immediately as well as actually punished them for engaging in the conduct.
One imagines that this occurs in the other 49 states, and a $3.5MM fine might be attractive enough for others to follow suit, given that NY has already done the spade work.
Here’s a theory. Constellation pays more and got them to go after southern to squash a competitor.
Oh, the stories I could tell from my experience with Glazer’s in my retail days…
Go ahead; no-one will know.
Specifics probably vary by state, but this sort of thing is illegal everywhere I know of. It also happens everywhere I know of, and Southern Glazer’s is far from the only company engaging in these tactics. A beer company here in Massachusetts recently paid a huge fine for “pay to play”, and nothing happened to their competitors who were doing the exact same things. The agent at the alcohol control bureau asked for funding for a much more widespread investigation and was denied. I guarantee there are a lot of other companies doing the same things as Southern Glazer’s in NY.
Some of the things that are considered “pay to play” in the alcohol business are perfectly legal and pretty much standard business practice in many other areas of retail. Some would be considered bribery in any sector.
Not the most intelligent of theories as the two entities compete on entirely different planes.
While we may applaud the SLA we should also ask them to continue on up the slope and eventually reach Albany, Springfield, Sacramento. There is a reason this bribery by Southern exists and works and is necessary.
If anyone wants to read it, here’s the statement from the SLA.
https://www.sla.ny.gov/system/files/SGWS_SLA_announcement_release_December_20_2017.pdf
It’s the way business is done. In NY you have to publish your prices and if you don’t get paid within 30 days, you are supposed to report the retailer who didn’t pay. That retailer is then put on a COD list for all wholesalers.
But published prices are just that. They’re not always the real prices. You call on the store, take an order, and swipe your credit card a few times, going home with maybe a bottle of water or nothing. The fake “sales” mean that the retailer gets a nice discount.
And if you have a favored retailer, you might make sure his competition doesn’t get the same price or same allocation. That seems to be what happened here.
But it’s not only the wholesalers. It works both ways. If you’re a big enough potential customer, the sales rep doesn’t even get to you until he takes care of the secretary. Regarding one account I was trying for, a guy told me “she likes expensive Chardonnay”.
Then, if you’re moving enough product, you demand a few extra perks. Maybe a nice trip overseas. With a few girls when you get there.
This board is about wine, but that’s not what really matters. People here go to a place and peruse a wine list. Today they’ll have this wine, tomorrow that one. People who don’t drink wine behave differently. They want their Johnny Walker or Maker’s Mark or whatever. They’re brand loyal.
The real money is in liquor. And other branded products, which is why people pay $300M for things like Meiomi or the Prisoner that folks on this board won’t drink. Those are brands.
Go to any store and look at the products, whatever they are. Somebody had to make the sale to the retailer, either at the corporate or local level, and they did exactly what the guys at Southern did.
The only reason it’s an issue with Southern at the moment is because the SLA is extremely political and wanted to send a message to someone or do a favor for someone. Look at the rules they’ve chosen to enforce the past few years, and where they’re enforcing them. Two years ago their associate counsel asked other states to issue cease and desist orders to a NYS retailer, and when they got a couple states to do it, they went after the retailer for shipping out of NY, something that had no impact on NY residents.
Basically the SLA is a shake-down organization that’s just as shady as the business practices it’s supposedly “uncovering”.
When I was ITB there were large blind deals for big accounts, posted with the ABC but not in the price book. Even more disturbing as a salesman was the cash give backs by others, mostly old timers salesman. Tough to compete with especially on spirits. Lots of hands extended.
Here is story from Earlier this year. Four Vendors To Pa-Liquor Control Board Agree To Pay Over $9 Million In Monetary Penalties
These guys are a joke in the Twin Cities. Everyone who has to work with these guys says their customer service is amateur hour. I applied the shops that don’t buy from them.