Kim Reynolds, Governor
Adam Gregg, Lt. Governor
Stephen Larson, Administrator

Refilling Bottles is Unethical, Illegal

November 2005

It is a crime that happens everyday. Bar owners authorize the refilling, watering down or adulteration of liquor bottles. Bottles with top-shelf labels are refilled with bottom-shelf liquor – making for a substitution that is not only illegal, but unethical and potentially dangerous. The practice not only misleads consumers, but damages the good will of brand names, places legitimate establishments at an unfair disadvantage and robs state programs of needed tax dollars. Everyone loses. 

Refilling bottles can potentially expose consumers to unforeseen health risks. Often the bottles and equipment used for refilling are not sanitized or may have been stored in unsanitary conditions. Bottles may harbor bacteria and other contaminants such as dead or decaying insects that may jeopardize the health and welfare of consumers who are expecting to drink what they order. 

The fraudulent practices also damage the good will and reputation of a manufacturer’s brand name. Liquor manufacturers spend a great deal of time, money and energy establishing an identity for brands in their product lines. A well-branded product with an established and loyal customer base often enjoys a competitive edge in the market that is reflected by market share and profitability. But when a loyal customer orders a favorite brand and is unknowingly served with a different –  often inferior – product, the reputation of the brand is damaged.   

Not to be forgotten are the licensees who own and operate law-abiding establishments. Licensees who illegally – and unethically – refill their bottles are able to offer “all-you-can-drink” specials and other promotions for a low price by replacing premium branded liquor with a cheaper product. The price differential gives unethical licensees a competitive edge while placing legitimate businesses at a market disadvantage. Moreover, the “all-you-can-drink” specials made possible by the practice contribute to the problem of high-risk drinking. 

Refilling liquor bottles and adulterating the contents of the bottles is also a form of tax evasion. Because taxes are based on a percentage of the cost of the product, more expensive products carry a higher tax rate. When licensees refill premium branded bottles with cheaper brands, state tax revenue is reduced. Simply put, the money intended to fund schools, hospitals and roadways is instead pocketed by the unethical licensees.

Ultimately, the unethical licensees will render themselves victims to the shady practices with the harsh consequences of breaking the law. The Iowa Alcoholic Beverages Division imposes civil penalties not to exceed $1,000 per violation, as well as license suspensions up to one year, and in extreme cases, licenses revocation. Similarly, federal penalties include a $1,000 fine or imprisonment up to one year. Legal fees, including court costs and attorney fees, are additional expenses for breaking the law. 

The message should be clear; the law does not stand for deception or dishonesty. There are no winners when licensees choose to do business in a fraudulent manner. Licensees who ignore the law ultimately do so at their own peril. 

Simply put, honesty, responsibility and fairness are in everyone’s best interest.

Printed from the website on October 31, 2020 at 3:37pm.