In the early 1970s, the Julius Schepps Co., a wine and spirits company had a small beer division located north of downtown Dallas. The Schepps beer division represented Lone Star Brewing Co., Hamm’s Brewing Co., and Jax Brewing Co., all of which at that time were independent standalone breweries. The distributor, the Julius Schepps Co also had Colt 45 and Champale in their portfolio, along with several small imports such as Lowenbrau.
Lone Star Brewing Co., not unlike Schepps, was changing their structure to reflect shifts in the industry. Lone Star had hired a number of higher level Schlitz executives, while terminating a number of old-time street people. One of the terminated Lone Star reps nicknamed “Pokey” was hired by Schepps to be a supervisor.
Pokey had been with the brewery for many years and was very bitter that he had been let go. As a young route supervisor at Schepps, Pokey spent much of his time discussing his previous job. Lone Star had paid Pokey and their field people only $350 a month. No bonus. What he was paid was a monthly bar allowance of $650, a car, and an expense budget, to include meals and lodging. Even though it was the early 70s, we asked how he could support a family on just $350 a month. He responded by saying that the field staff lived off the bar and the expense reports. He would go in early, make a few accounts, leave and either go back home or go fishing for the remainder of the day. He might make a few bars and drink some beers at night but that was the extent of his work day.
Obviously the new executives at the brewery changed that culture and upgraded the field staff. Market reports and business planning became part of the Lone Star operation. No more $350 a month sales reps.
The alcoholic industry has been known for paying their employees well. Even with the years of consolidation and downsizing, salaries, for the most part, represented the responsibilities of the position. The recession of 2007, and the dramatic growth of crafts have changed that culture. Quite a few in the industry are not happy with their compensation, but feel that they have limited options. Some breweries even have new employees sign non-compete contracts, usually good for a year, locking them in a specific company.
Now along comes the news of a lawsuit filed by MC in a Milwaukee court that claims a former MC Chain sales executive stole more than $13 million dollars over an 11-year period. The suit claims there were 15 shell companies that were submitting fraudulent invoices. This executive caused the invoices to be submitted and approved for payment. In 2013, a MC employee noticed something unusual on the invoices and began to cross-check them, which ultimately lead to finding out about the fraud. The brewery sought punitive damages and has named 28 people as defendants and those are named as conspiracy defendants. The beer industry will be watching this case closely for the outcome.
It really does not matter if it is a brewery rep like Pokey or a warehouseman and a driver salesman altering the load manifest to hide cases or a driver removing two six packs of bottles in each case, than sliding them sideways to look like the case is full, and then selling them as such to key retailers while discounting the remaining cases to another retailer can fraud a company. A highly compensated executive with others stealing for years is the same as above. Remember Shakespeare’s words: “no legacy is as rich as honesty.”
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