On September 10, 2026, the Alcohol and Tobacco Tax and Trade Bureau (TTB) announced a non-prosecution agreement in which Southern Glazer's Wine and Spirits agreed to pay $12.5 million after an investigation into commercial bribery of retailer employees [1]. The case was investigated jointly by TTB and IRS Criminal Investigation [1]. If you operate a bonded winery — in Napa, Sonoma, Willamette Valley, Finger Lakes, or anywhere else in the US — this case is a signal you cannot afford to ignore.

Why Wineries Are Directly in the Frame

Wineries are industry members under the Federal Alcohol Administration (FAA) Act. That means the full set of federal trade practice prohibitions applies to you: tied-house restrictions, commercial bribery rules, exclusive outlet provisions, and consignment sale rules. These are not just distributor problems.

The Southern Glazer's case illustrates a risk that many small and mid-size wineries overlook: you can be held accountable for what third-party vendors or sales agents do on your behalf. When false invoices are used to conceal payments to retailer employees — even if those invoices are created by a broker or promotional firm you hired — the trail can lead back to the industry member who funded the arrangement.

The Four Highest-Risk Scenarios for Wineries

Understanding where violations typically originate helps you build a practical defense. Here are the four scenarios most relevant to wineries:

1. Paying for Shelf Space or Display Placement

Any arrangement — formal or informal — in which your winery pays a retailer (or someone associated with a retailer) in exchange for preferred shelf positioning, end-cap placement, or prominent display is a classic tied-house concern. This applies whether the payment is cash, free goods, or in-kind services.

2. Sponsorships Tied to Product Placement

Sponsoring a wine dinner at a restaurant or a retail wine event is not automatically prohibited, but the moment a written or verbal agreement ties that sponsorship to your bottles receiving preferred placement, you are in prohibited territory. A Sonoma Chardonnay producer co-sponsoring a "wine education night" at a local chain is fine; secretly requiring that only their SKUs appear on the featured display table is not.

3. "Events" or Samplings That Never Happen

One of the clearest red flags in the Southern Glazer's case is the use of false invoices — payments for promotional events or samplings that were either grossly inflated or never occurred at all. If your winery books a "tasting event" at a Finger Lakes retailer and that event does not happen as described, yet the invoice is paid, every document in that transaction is a potential liability.

4. Promotional Items Given in Exchange for Preferred Display

Point-of-sale materials, branded merchandise, free cases, and similar promotional items can be given to retailers — but only within the limits of the applicable exceptions, and only when they are not conditioned on the retailer giving your brand preferred placement or excluding competitors.

Understanding the Subpart D Exceptions: What You Must Document

Federal regulations provide limited exceptions that allow industry members to furnish certain things of value to retailers. To use these exceptions lawfully, your records must be complete and accurate. The records you are required to keep for point-of-sale and promotional materials furnished to retailers must include:

The retailer's name and address
The date the item or service was provided
A description of the item furnished
The cost to the industry member
Any charges made to the retailer

This is not optional paperwork — it is the evidentiary backbone that separates a compliant promotion from an unlawful inducement. A Napa Valley winery that hands out branded wine openers at a retailer's grand opening without a dated, itemized record linking that distribution to a specific store and cost cannot demonstrate compliance if TTB comes knocking.

Building an Audit-Ready Record-Keeping System

The practical challenge for most wineries is not knowing the rules — it is maintaining records that hold up during an audit. Here is a checklist you can apply today:

Before any promotional activity:

Confirm in writing (email is fine) the retailer's legal name and address.
Assign a unique reference number to each promotional activity or item batch.
Document the fair market cost of everything being furnished.

At the time of the activity:

Record the exact date — not a range, an exact date.
Note what was furnished (item description, quantity, SKU if applicable).
Note any charges the retailer is paying back to your winery.
Have a winery representative sign off that the activity actually occurred.

After the activity:

File all documentation in a durable, searchable format — paper folders work but are hard to audit quickly; a digital system with lot-level traceability is significantly more efficient.
Cross-reference each promotional expense against your general ledger so that an auditor can trace a dollar amount on a bank statement to a specific retailer record.

Red flags to watch for in your own operations:

Invoices from promotional vendors that describe services in vague terms ("marketing support," "brand activation") with no location, no date, and no retailer name.
Payments routed through a third party (a broker, an events company, a media firm) with no documentation that the described activity occurred.
Promotional expenses that spike around a retailer's annual reset or product selection cycle.

What to Do If You Use Sales Agents or Promotional Firms

The Southern Glazer's case underscores that your winery bears responsibility for the conduct of agents acting on your behalf. If you use an independent sales rep, a brand ambassador company, or a third-party events firm, your compliance program must extend to their activities:

Include trade practice compliance language in every vendor and agent contract.
Require vendors to submit activity reports — with retailer name, date, item, and cost — before you release payment.
Conduct periodic spot-checks: call the retailer and confirm the event or activity actually happened.
Never approve an invoice that lacks the required record-keeping fields for point-of-sale and promotional materials, regardless of how the vendor frames it.

A small Willamette Valley Pinot Noir producer paying a freelance brand ambassador to run tastings at Portland-area wine shops is in exactly the scenario the regulators care about. The winery may be three times-removed from the retailer employee, but if money flows improperly, TTB and IRS-CI can follow it.

Tracking Trade Practice Expenses in Winery Software

Keeping compliant records is significantly easier when your promotional expenses live in the same system as your lot traceability, inventory of dry goods, and regulatory declarations. Cepaos includes a TTB-focused regulatory compliance module that supports cellar book records and regulator reports alongside your day-to-day winemaking and inventory data — so the records you need for a trade practice audit are part of the same workflow you already use to track vessels, fermentation additions, and bottling runs.

When a TTB auditor asks for documentation on a promotional item given to a Napa retailer last spring, the answer should be a few clicks — not a search through filing cabinets. Cepaos also supports electronic invoicing and sales management, which means your commercial records and your compliance records can live in the same traceable environment.

The Takeaway: Compliance Is a Daily Practice, Not a One-Time Review

The $12.5 million Southern Glazer's case was investigated by TTB and IRS-CI and stands as a clear signal that federal enforcement of trade practice rules is real and consequential [1].

For your winery, the message is straightforward: review every promotional spend, audit your vendor invoices, build complete point-of-sale and promotional records into your workflow, and extend your compliance expectations to every agent or firm acting on your behalf. The rules apply to you as an industry member, and the enforcement environment has never been clearer.

Ready to bring your trade practice records, lot traceability, and TTB compliance reports into one place? Learn how Cepaos supports US winery compliance.

Sources

Press Release - FY 26-2 | TTB: Alcohol and Tobacco Tax and Trade Bureau — ttb.gov, published 60 days ago. https://www.ttb.gov/public-information/press-releases/press-release-fy-26-2