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WSWA seeks clarification over new retail programme

The CEO of Wine and Spirits Wholesalers of America (WSWA) has requested clarification about the legality of a new single source retail service providers programme.

WSWA is seeking clarification about the legality of a single source retail service provider programme

Craig Wolf, president and CEO of WSWA, wrote a letter to Alcohol Tobacco Tax and Trade Bureau (TTB) administrator John Manfreda seeking clarification on the matter.

Implemented by The Kroger Company (Kroger), documents for the Single Source Programme submitted with Wolf’s letter suggested the Single Source Programme will require payment by wholesalers to merchandisers (chosen by Kroger) to place alcohol products on Kroger shelves throughout the US.

Wolf argued this was unlike current category management practices where wholesaler employees assist with merchandising products in their portfolios.

He suggested in his letter to Manfreda that the structural change put forward by Kroger would constitute a direct payment to Kroger-selected merchandisers for merchandising of all beverage alcohol product bought by the chain, thus creating a potential “unlawful inducement” under the Federal Alcohol Adminstration (FAA) Act and TTB regulations.

“WSWA has serious concerns that the Single Source Programme may result in violations of the Federal Alcohol Administration Act by wholesalers who may participate in that programme,” said WSWA president and CEO Craig Wolf in the letter.

The WSWA also requested clarification on additional parts of the policy, including whether payment by a wholesaler to a merchandiser chosen by a retailer equates to a slotting fee, or if the payment violates regulations disallowing merchandising of a competitor’s product?

The FAA Act was introduced to guarantee independence for each tier of the drinks industry and establish “important checks” and balances within the system.

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