legal corner
TRADE PRACTICE CHECKUP A new year is a good time to create or update your company’s policies and procedures. BY ALISON HERMAN
Hard to believe it’s 2024 and another OND is behind us! Whether it was a banner year, a fair year or a disappointing year, now that it’s over, it’s time to start fresh. While both federal and state trade practice enforcement was dormant for many years, it is clear that vigorous enforcement by regulatory agencies is now the new norm. Therefore, it is more important than ever to look over your trade practice checklist and update your company’s policies and procedures to help protect your license(s). If you don’t have a checklist, this article will help you get started and if you have one in place, now is a good time to dust it off and update it to help ensure your business teams stay compliant and avoid trade practice enforcement investigations or violations by creating a culture of compliance. A trade practice checklist should include implementing the following: Create or update policies and procedures around federal and state trade practice rules. These should include permitted activities and services such as providing retailer samples, consumer tastings, merchandising, retailer meals and entertainment, along with credit and return policies, expense spending and what to do if a state or federal agency requests company documents or approaches employees at your business locations or elsewhere for questioning. It should also make clear that certain activities, like credit card swipes, are never permissible. Quarterly policy reminders and newsletters to keep the rules front of mind and encourage managers to refer to them often during team meetings. Reinforce policies and procedures with
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specific training, regularly scheduled. Training should include both in-person and web-based seminars. Also consider bringing in counsel for at least yearly team compliance refreshers and Q&A sessions. The more familiar your team is with what is expected of them by the company, and the more comfortable they feel asking questions, the less likely they will be to make mistakes. Provide easily accessible resources that include the various federal and state specific tied-house rules along with making certain managers are accessible to discuss compliant ways to achieve various business goals. If you need guidance on what can and cannot be done in a particular state, check out Set The Bar (setthebarapp.com), which provides trade practice rules in all of the states. It’s important that your team has resources and the ability to know what can and cannot be done. Maintain state required records and schedule compliance audits and reviews. Consistently apply your policies and procedures to employees throughout your organization. Whether your company engages in marketing and promotion of your brands directly, or through third-party companies, with on- and off-premise licensees following a checklist and implementing these targeted policies and procedures will help to clearly establish the company’s expectations that employees follow the law and help to create a culture of compliance while achieving the business goals. While having a checklist and these documents in place does not guarantee a company will not be fined or face a license suspension or revocation, companies that can show they
… it is more important than ever to look over your trade practice checklist and update your company’s policies and procedures to help protect your license(s). take trade practice compliance seriously and proactively, fare much better with the ultimate outcome of an investigation than companies that do nothing. ■
Alison Herman is Of Counsel at Malkin Law, P.A., a law firm serving the alcohol beverage industry. Nothing in this article is intended to be and should not be construed as specific legal advice.
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