​Liquor Distributor Fined $3M By Michigan For 88 Violations

MICHIGAN — A large liquor distributor has been fined a "historic" $3 million by the state of Michigan for 88 violations of the Liquor Control Code that officials said led to liquor supply shortages throughout the state during the 2019 holiday season.

Michigan Attorney General Dana Nessel and Michigan Liquor Control Commission Chair Pat Gagliardi described the fine against NWS Michigan LLC, which does business as Republic National Distributing Co., as unprecedented when they announced it Wednesday, following an independent audit against the company.

“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,” Nessel said. “The State will not tolerate vendor mismanagement that results in financial hardship which impacts the livelihood of liquor retailers across Michigan.”

RNDC’s logistical failures began in spring 2019 and contributed to liquor shortages at Michigan liquor stores that extended through the 2019 holiday season, according to a news release. During that time the MLCC received hundreds of complaints from liquor retailers who could not obtain products from RNDC to stock their shelves.

Retailers reported that RNDC delayed or missed deliveries completely, or did not deliver the products ordered. They also complained of RNDC’s lack of customer service, failure to return phone calls and of having to drive to RNDC’s warehouse to pick up their products.

The order approving the settlement was signed Wednesday by MLCC Hearings Commissioner Ed Clemente and is believed to be unprecedented in the liquor regulatory industry.

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, according to a news release.

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.

“Distributors must abide by the rules or be subject to a fine,” Gagliardi said. “I am deeply appreciative of the assistance from the Attorney General’s office and all of the hard work of the MLCC staff in negotiating this agreement.”