Manhattan Beer Distributors Facing Class Action Over Allegedly Hidden 10-Cent Bottle Deposit Charge

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An Armonk, New York restaurant has filed a proposed class action in which it alleges Manhattan Beer Distributors, LLC has engaged in “widespread billing fraud” against small businesses by way of imposing additional bottle deposit charges. 

The 23-page lawsuit alleges Manhattan Beer, reportedly the largest single-market beer wholesaler in the U.S., has hidden within its invoices an extra 10-cent charge in the deposit the company is required to charge customers under the New York State Returnable Container Act of 1982, or the “Bottle Bill.” 

Under the law, beer distributors such as the defendant must collect a five-cent deposit on each bottle delivered, the case says. According to the suit, Manhattan Beer “dupes its customers,” of which there are reportedly more than 23,000 in New York alone, into paying an extra 10 cents on 24-bottle orders and believing that the 10-cent charge is part of the state-mandated bottle deposit. 

“This deceptive billing practice leads customers like Plaintiff Cap 111, which ran a small restaurant, to think that the $1.30 ‘deposit’ Manhattan Beer billed for a 24-bottle case of beer is legitimate, when in fact the Company is only authorized by law to collect $1.20 in deposit fees,” the complaint says. “That is, 24 bottles x $0.05 = $1.20. Not the $1.30 Manhattan Beer sneaks into its invoices.” 

The lawsuit stresses that the additional 10-cent charges “add up quickly” given Manhattan Beer reportedly sells more than 45 million cases of beer per year. 

“Even if Manhattan Beer added the extra 10 cents onto just half of the 45 million cases it delivers annually, that results in millions of dollars in ill-gotten gains,” the suit alleges. “Specifically, 22,500,000 cases x $0.10 = $2,250,000 per year. Manhattan Beer extracts millions of dollars from its customers every year by this deceptive and fraudulent scheme.” 

The lawsuit goes on to allege that Manhattan Beer is well aware that its “billing scheme” is fraudulent and unlawful, as the company, the suit says, declines to charge “more sophisticated customers,” such as supermarkets, the extra 10 cents on 24-bottle cases. 

“Instead, Manhattan Beer’s scheme preys on the small businesses that rely on the giant distributor to do the right thing when it comes to billing,” the plaintiff charges. 

According to the case, Manhattan beer is “the only game in town” for its more than 23,000 New York customers since the company has exclusive distribution rights for Corona, Coors Light, Heineken and many other popular brands. Small businesses are thus left locked into buying from Manhattan Beer, and in doing so “innocently pay fraudulent deposit charges to a company with annual sales that exceed one billion dollars a year,” the lawsuit claims. 

“Sales of alcoholic beverages, including beer, are the lifeblood of many restaurants and convenience stores, especially those owned and operated by small business owners,” the plaintiff states. “To target consumers with impermissible bottle deposit charges using the cover of state action, as Defendants have done for years, is unconscionable.” 

The lawsuit looks to represent all Manhattan Beer customers in the United States who purchased bottled beer from the company and were charged $1.30 as a deposit for 24-bottle cases during the applicable statute of limitations period up to and including the date of judgment. 

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