• by Steve Ellwanger , December 28, 2022

Independent beverage wholesalers in 17 states have asked the federal government to investigate whether soft drink companies are unlawfully “leveraging” retailer slotting fees to gain shelf space for their new alcohol beverages.

In a letter to the U.S. Department of the Treasury and its Alcohol and Tobacco Tax and Trade Bureau, 22 wholesalers allege that “new entrants to the alcohol space are not following the same well-established regulations which have served consumers well for decades.”

While soft drink marketers have long been allowed to pay slotting fees for shelf space, the same is not true for alcoholic beverages.

According to the wholesalers, some retailers that carry both alcohol and non-alcohol versions of popular soft drink brands are displaying them together—often outside of the traditional alcohol aisle.

“It is unrealistic to think that soft drink manufacturers are not leveraging slotting fees for their non-alcohol brands to ensure preferential shelf space for the alcohol counterparts,” the wholesalers wrote.

They did not cite specific evidence indicating that slotting fees are being paid for alcohol beverages.

Only one beverage brand—PepsiCo’s Hard Mtn Dew—is referenced by name in the letter. It comes by way of a link to a CNN story about the brand’s February 2022 launch.

A joint venture between PepsiCo and The Boston Beer Co., Hard Mtn Dew is distributed by Blue Cloud Distribution, which PepsiCo established as a division separate from its own soft drinks distributor system.

The letter also includes in-store images showing cases of Hard Mtn Dew and The Coca-Cola Co.’s Simply spiked lemonade in end-aisle positions.

“The law is clear and TTB should expeditiously use its authority to ensure that slotting fees are not being used by large soft drink manufacturers to sell alcohol in America today,” the letter states.

The distributors said they deliver 14,595 different alcohol and non-alcohol beverages to retailers.

Their letter was first reported by Beer Marketer’s Insights.

Marketing Daily reached out to PepsiCo, Coca-Cola and the TTB, but had not heard back by deadline.