THE ASSEMBLY

STATE OF NEW YORK COMMITTEES

ALBANY Banks
Cities
Consumer Affairs and Protection
Environmental Conservation
Steering

MICAH Z. KELLNER
th
65 Assembly District

February 22, 2010

Hon. Andrew M. Cuomo

Attorney General of New York
The Capitol
Albany, NY, 12224
VIA FACSIMILE: 518-474-4290

Dennis Rosen
Chair, New York State Liquor Authority
80 South Swan Street, 9th Floor
Albany NY 12210
VIA FACSIMILE: 518-402-4015

Dear Attorney General Cuomo and Chair Rosen:

I am writing to urge the State Liquor Authority and the Office of the Attorney General to
investigate the relationship between Diageo – the “world’s leading premium drinks business”
according to their materials – and the Last Store on Main Street coalition.

As the attached letter from Diageo to retailers shows, not only did this company give a large
contribution to Last Store on Main Street last year and this year and pay for a rally held by liquor
stores, but they also wrote to retailers describing these contributions in a way that may suggest
an attempt to influence purchases: “I know we can count on your support for our industry [sic.]
leading brands!”

Paragraph (c) of subdivision 1 of section 101 of the Alcoholic Beverage Control law
prohibits gifts and services from manufacturers and wholesalers to retailers which, in the
judgment of the Authority, may tend to influence licensees to purchase the products of a
manufacturer or wholesaler. Support for retail trade associations is allowed where such
participation is in reasonable amounts and does not indicate an attempt to influence the purchase
of products of contributing manufacturers and wholesalers by the members of the retail trade
association.

Diageo is not un-aware of this law. In October of 2006, former Attorney General Spitzer and
former SLA Chairman Daniel Boyle announced an agreement to resolve an investigation of
illegal marketing practices by 15 wine and liquor suppliers. Under this agreement, the OAG and
SLA re-affirmed that incentives, financial and otherwise, are a violation of New York’s Alcohol
Beverage Control law which explicitly prohibits manufacturers and wholesalers of wine and

▫ 834 Legislative Office Building, Albany, NY 12248  (518) 455-5676, FAX (518) 455-5282
▫ 315 East 65 Street, New York, NY 10065  (212) 860-4906, FAX (917) 432-2983
E-mail: KellnerM@assembly.state.ny.us
liquor from providing such inducements. Under the agreement, suppliers must cease making
such illegal inducements. One of the parties to the agreement was Diageo North America.

While the law was amended in 2008 to provide a narrow exception to the prohibition for
supporting “bona fide retailer trade association activities…where such participation is in
reasonable amounts and does not reach proportions that indicate attempts to influence the
purchase of products of contributing manufacturers and wholesalers by the members of such
retailer associations,” it is unclear to me whether Diageo’s actions fit within this exception.

Only an investigation by the SLA and the Office of the Attorney General can determine
whether this activity was permissible pursuant to all relevant laws, and by the terms of the 2006
agreement. I call upon the OAG and the SLA to conduct such an investigation.

Please do not hesitate to call me at 212-860-4906 if you wish to discuss this further. I
appreciate your attention to this matter.

Very truly yours,

Micah Z. Kellner
Assembly Member