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Record $2 Million Fine Against Craft Beer Wholesaler

TRENTON – Attorney General Christopher S. Porrino and the Division of Alcoholic Beverage Control today announced a settlement with a Hunterdon County craft beer wholesaler which resulted in an unprecedented $2 million fine for alleged trade practice violations.

The Division alleged that Hunterdon Brewing Company LLC sold draft beer tap systems at below fair market prices and concealed the charges by mislabeling them as “miscellaneous draft charges” on invoices and ignored credit regulation for at least 700 retail customers. During its investigation, the Division compiled sworn statements from more than two dozen retail licensees and reviewed thousands of documents.

The fine, agreed to by Hunterdon Brewing in a Consent Order signed May 31, is the largest ever imposed on a single wholesale licensee for trade practice violations, according to the Division. All of the alleged offenses are violations of New Jersey statutes and regulations governing the sale and distribution of alcoholic beverages.

“Fair market prices exist for a reason. The improper trade practices allegedly employed by Hunterdon Brewing threatened to disrupt competition and throw the wholesale industry into disarray,” said Attorney General Porrino. “Consumers suffer when these laws and regulations are ignored. The Division’s actions ensure that New Jersey consumers will continue to benefit from a stable alcoholic beverage industry.”

“Throughout its history, ABC has endeavored to create a level playing field that encourages fair, open and transparent competition,” said Jonathan Orsen, Acting Director of the Division of Alcoholic Beverage Control. “When a wholesaler utilizes discriminatory trade practices, competition among wholesalers is stifled and consumers lose the benefits which open competition provides.”

Acting Director Orsen said that Hunterdon Brewing’s parent company, Craft Beer Guild, cooperated with the investigation.

The alleged violations and terms of the fine are outlined in the attached Notice of Charges and Consent Order.

The fine is payable in four $500,000 installments over the next year. If required compliance audits show no substantial similar violations, the Division will waive $250,000 of the last payment.

The investigation was led by Enforcement Bureau Chief and Senior Deputy Attorney General Kevin Marc Schatz and Deputy Attorneys General Alyssa E. Bloom, Andrew Sapolnick and Richard Karczewski, along with the Division’s investigations bureau.