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RNDC fined $3m over supply shortages in Michigan
US distributor Republic National Distributing Company (RNDC) has been ordered to pay a US$3 million fine after the company violated the liquor control code, which resulted in supply shortages across Michigan in 2019.
Michigan faced supply shortages as a result of RNDC’s liquor control code violations
Michigan’s attorney general, Dana Nessel, and Michigan Liquor Control Commission (MLCC) chair, Pat Gagliardi, issued the “unprecedented” fine after RNDC was found to have violated the liquor control code 88 times.
The distributor is one of three authorised distribution agents for the MLCC, the state-run agency that oversees the sale of spirits in Michigan.
The violations by RNDC, which is the strategic partner of National Wine & Spirits (NWS) in Michigan, contributed to supply shortages of spirits throughout the state in 2019. Stock shortages hit Michigan following RNDC’s move to a new facility, which the firm said “turned out to be like building a new plane while flying it”.
At the time, MLCC said it had received complaints from retailers regarding “delivery issues, stock shortages, and lack of customer service that are negatively impacting their businesses”.
Nessel said: “I appreciate the work of my assistant attorneys general and the Michigan Liquor Control Commission in reaching this significant settlement, which should serve as a strong reminder of accountability in the state’s liquor inventory and delivery system.
“The state will not tolerate vendor mismanagement that results in financial hardship which impacts the livelihood of liquor retailers across Michigan.”
The order approving the settlement was signed yesterday (8 July) by MLCC hearings commissioner, Ed Clemente.
In the settlement, RNDC acknowledged all 88 violations of the Michigan Liquor Control Code that included failure to deliver liquor orders, failure to maintain an adequate physical plant, and failure to provide records requested by the MLCC.
In addition to the US$3m fine, the order stipulates an independent audit of RNDC’s distributing business, places RNDC on probation for one year and requires RNDC to submit monthly compliance reports to the MLCC during that time.
The Spirits Business has contacted RNDC for comment.
RNDC is the second largest drinks distribution firm in the US and employs more than 9,500 people nationwide. Last year, the firm formed a joint venture with Young’s Market Company.