Financial reporting from Anheuser Busch InBev

Anheuser-Busch InBev has once again run afoul of the Alcohol and Tobacco Tax and Trade Bureau and will pay $5 million for alleged trade practice violations.

Anheuser-Busch InBev to Pay $5M for Trade Practice Violations

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For Anheuser-Busch InBev, paying gawdy sums of money in fines is so commonplace that is seems to be just the cost of doing business. But even a penalty as large as this one may raise some eyebrows.

And once again the world’s largest brewer has run afoul of the Alcohol and Tobacco Tax and Trade Bureau (TTB) in the U.S., and the penalty this time is a whopper. AB-InBev will be paying the TTB $5 million as the result of an offer-in-compromise (OIC) that will resolve the latest round of alleged trade practice violations.

That’s a new record and the largest OIC that the TTB has ever collected. Further, the Leuven, Belgium-based company will have its importer and wholesaler permits briefly suspended in Littleton and Denver, Colorado.

Most of the trade practice violations are linked to sports and and entertainment sponsorships. Those familiar with AB-InBev’s cutthroat practices will be familiar with these list of illegal actions as they’re similar to what the company has been previously fined for in bars and restaurants.

These alleged actions would have been in violation of the Federal Alcohol Administration Act and took place in between July 2016 and December 2018.

Just some of the accusations include:

  • AB-InBev was accused of creating sponsorship agreements with “various entities in the sports and entertainment industries” that required concessionaires to specifically stock AB-InBev beer and prohibited those concessionaires from also seeking out competitor’s brands.
  • AB-InBev was accused of providing free “fixtures, equipment and services,” including draft beer dispensing systems, on the grounds that the concessionaires exclusively purchase AB-InBev products.
  • AB-InBev was accused of paying off retailers for items such as “consumer samplings” that never took place and that such payments allegedly were the equivalent of bribes in exchange for stocking AB-InBev products.

For a complete list of the accusations, check out the report on Brewbound.

In a press release, the TTB said: “TTB remains committed to putting an end to anti-competitive practices that negatively impact law-abiding businesses and prevent consumers from enjoying a wide selection of products.”

Of course, even after paying an enormous fine while vowing that new “strategic training initiatives” are in place to prevent this from happening again, it seems almost inevitable that AB-InBev will push the limits of legality again.

For those driving the brewing behemoth’s strategy, crushing the competition at any cost is just the modus operandi. And that’s in spite of a company’s spokesperson claiming that AB-InBev “has always maintained the highest standards of business integrity and ethics including working closely with regulators as we have done in this instance.”

“Our commitment to operating in full compliance with alcohol beverage laws and regulations includes regular reviews of our operations and we have recently implemented several enhancements to our compliance programs including a strategic training initiative, new communication tools, and leveraging data and analytics,” said the company’s statement. “We apply the same passion and rigor to our ethics and compliance standards as we do to brewing the country’s best-loved beverages.”

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