US: Diageo, Pernod Ricard pay out to settle trade dispute
Diageo, Pernod Ricard, Bacardi agree to settle over "slotting fees" row
All companies continue to deny breaking the rules on so-called "slotting fees", but have agreed to an "offer in compromise" that will see them pay a total US$1.9m to the US Alcohol & Tobacco Tax and Trade Bureau (TTB). "This is the largest set of offers in compromise ever accepted by TTB for trade practice violations," said the TTB yesterday (10 May).
Its allegations against the drinks makers relate to the companies’ participation in the 2008-2009 Harrah’s Nationwide Beverage Program, it said. In the case, the TTB alleged that the firms' collectively paid almost $2m "in inducements" to Harrah's affiliates over a two-year period.
The TTB added: "Payment of slotting fees by an alcohol beverage supplier to an alcohol beverage retailer is an unlawful marketing inducement which creates an artificial barrier to open and fair competition especially for small to medium-sized companies that cannot pay such fees."
As part of the settlement, each company has continued to deny wrongdoing. Of the $1.9m settlement, Diageo will pay $650,000, Pernod will pay $300,000, Moët Hennessy will pay $275,000, Bacardi will pay $262,000, Future Brands will pay $250,000 and E&J Gallo will pay $225,000.
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