Subsidiary of Boston Beer Co. fined $1 million for sales of unregistered beer and malt beverage

Maybe it’s not just the new, small breweries that need a reminder about following labeling regulations. The American Craft Brewery, a subsidiary of Boston Beer Co., is settling charges from the New York State Liquor Authority (SLA) that the company was selling millions of dollars in unregistered beer and malt beverages throughout New York, paying a fine of $975,000. The SLA says these 1.4 million cases, valued at over $24 million, lacked the legally required brand label registrations that “protect consumers, ensure public health and safety in the event of a product recall.”

All beer and malt beverages sold in New York State must first receive brand label approval from the SLA. Brand labeling requirements protect consumers from false or deceptive product information, in addition to providing consumers with safeguards against “knockoff” or bootleg alcohol from entering the marketplace.

“Brand label registrations are essential in protecting the public health, safety, and welfare, as they allow the SLA to easily track products through the distribution chain in the event of a product recall,” the organization said in its statement.

Here’s what happened

In February 2016, the SLA’s Permits Unit Supervisor discovered American Craft Brewery had only registered one product, Twisted Tea Summer Blueberry, for sale within the state. The Supervisor brought this matter to the attention of Boston Beer executives in a formal letter in 2016. Boston Beer officials responded that they were in the process of filing paperwork to add their numerous additional brands.

In early 2018, more than a year after notifying Boston Beer of their failure to register their products, SLA Enforcement opened an investigation after verifying that numerous products sold across New York were still not registered with the Authority. Investigators discovered more than 1.4 million cases of unregistered malt beverages, with a value of over $24 million, were being sold throughout the State of New York in 2017. Products
included numerous varieties of popular Angry Orchard, Twisted Tea, and Sam Adams brands.

“Whether you are a small farm brewer in Clinton County, or a major international public company, you have to comply with the rules and the laws of New York,” said SLA Chairman Vincent G. Bradley. “I am thankful for the hard work of our enforcement and licensing teams, who work tirelessly to ensure that New York remains an innovative and competitive place to manufacture and sell beer, but also is a place where the marketplace is safe for the consumer.”

These investigations were conducted and prosecuted by the major cases team, including Beverage Control Investigator Ethan Manning, Beverage Control Investigator Brian McLean, Senior Beverage Control Investigator Martin Liepshutz, and the Authority’s leading major case prosecutor, AGC William Brennan. The violation was brought to the attention of the major case team due to the diligence of SLA Permit Unit Supervisor Maureen Hughes.