WRITTEN BY ALISON HERMAN
HOW TO BUILD A CULTURE OF COMPLIANCE A PRACTICAL GUIDE TO ALCOHOL BEVERAGE TRADE PRACTICE REGULATIONS
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avigating the complex web of federal and state alcohol beverage regulations is an ongoing challenge for producers, distributors, and marketing companies alike. Trade practice rules are designed to maintain a level playing field across the industry, ensuring responsible promotion and fair competition. The Alcohol and Tobacco Tax and Trade Bureau remains active, and just since January it has settled numerous offers In compromise that have focused mainly on industry members’ failure to pay federal excise taxes. Meanwhile, various states have active trade practice investigations. In either case, investigations can be quite costly for industry members. With regulatory scrutiny continuing, companies that have policies, procedures, and training in place are better positioned to avoid costly penalties and protect their brands. A comprehensive trade practice compliance strategy should begin with a clear checklist and robust internal policies, but it must also be supported by ongoing communication, training, and access to up-to-date legal resources. The following best practices can help your organization build and maintain a strong culture of compliance.
1. DEVELOP OR UPDATE POLICIES AND PROCEDURES At the core of any compliance program are clear, written policies that define permissible and prohibited activities that take into account each state’s alcohol beverage laws and regulations. These should include: Rules around providing samples to retailers and consumers Guidelines for tastings, merchandising, and point-of-sale activities Limitations on providing retailer meals, gifts, entertainment, and event sponsorships Proper procedures for credit and product returns Firm prohibitions on impermissible actions, such as credit card swipes on behalf of retailers or fraudulent expense reporting Protocols for responding to state or federal agency inquiries, document requests, or unannounced visits Companies should regularly review and update these documents to reflect changes in the law or evolving business practices. W W W . ARTISANSPIRITMAG . C O M
2. QUARTERLY COMPLIANCE COMMUNICATIONS Keeping compliance front-of-mind is essential. Consider issuing quarterly newsletters or compliance bulletins that remind teams of critical do’s and don’ts, highlight recent enforcement actions, and reinforce company policies. These updates can serve as valuable discussion points during regular team meetings and serve as documentation of ongoing compliance efforts.
3. REGULAR TRAINING PROGRAMS Training is the backbone of compliance. All employees involved in sales, marketing, promotions, or customer-facing roles should receive: INITIAL TRAINING upon onboarding REGULARLY SCHEDULED REFRESHERS via in-person seminars or web-based learning ANNUAL Q&A SESSIONS with legal counsel or compliance professionals. Encouraging an open environment where team members feel comfortable asking questions reduces the risk of inadvertent violations and improves overall understanding of complex regulatory requirements. This also helps mitigate potential fines. If you can show a regulator that the employee was trained and had access to the rules and regulations, it goes a long way to show that your company is doing all it can to keep compliant, despite the actions of this “bad apple.”
4. ACCESS TO PRACTICAL RESOURCES Empowering your team with easy-to-access information is a must. Keep an internal compliance portal or toolkit with state-specific tied-house rules, FAQs, and reference guides. Encourage use of resources such as Set The Bar,1 which compiles trade practice rules for all 50 states in a user-friendly app. Managers should also be readily available to advise on compliant strategies to achieve business goals.
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www.setthebarapp.com
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