Alcohol industry warns Kroger shelf plan may break US law (Excerpt)
By Andy Morton
2 February 2016
US alcohol trade groups have asked regulators to investigate a new shelf management programme from retailer Kroger that seeks payments from producers.
Kroger last year warned it was to implement a so-called “single source” system at its US stores that would put wholesaler Southern Wine & Spirits in charge of organising its alcohol shelf space. Kroger said the move would improve “shelf presentation and compliance” and asked clients to fund the costs of the programme.
However, industry groups including the Distilled Spirits Council (DISCUS) and the Beer Institute have written to the Alcohol and Tobacco Tax and Trade Bureau (TTB) questioning whether the programme is in line with federal rules on alcohol distribution.
DISCUS said the proposal “raises serious issues” over compliance and appears to break prohibitions on inducements and payments.
“Our members have sought our advice about the legal status of the Kroger programme and we have advised that the programme may put their basic permit at risk,” DISCUS said.
The Beer Institute said that while it was not against category management programmes, the payment to Southern could break federal law.