Two Charged With Selling Illicit Alcoholic Beverage To NJ Stores

NEWARK – Two men have been charged in connection with a scheme to sell the illicit alcoholic beverage, Extracto de Malta, to unlicensed retail shops throughout the state, The Division of Alcoholic Beverage Control announced Thursday.

The ABC is alleging that Condal Distributors Inc., of Bronx, N.Y., has been selling Extracto de Malta, a beverage with an alcohol by volume content of 3.5 to 4 percent (the equivalent of a light beer), to small retail food and drink shops, also known as bodegas, throughout the state, with many clients concentrated in Hispanic communities in northern New Jersey. Investigators found the drink in at least 15 supermarkets and bodegas in Newark, Jersey City, Elizabeth, Plainfield, Bridgewater, Garfield, North Bergen and as far south as Pennsauken.

Nelson A. Fernandez, 63, of Bloomfield, is the owner of Condal and was charged with selling an alcoholic beverage without a license. Elbio A. Fanas, 44, of Yonkers, N.Y., was working as a salesman for Condal when ABC Investigators arrested him in Elizabeth on Aug. 13 for allegedly soliciting the sale of alcohol without a license and selling an alcoholic beverage without a license. Fernandez and Fanas will both appear in Superior Court in Union County to face the charges. The investigation is ongoing, and more charges may be brought as it proceeds.

The ABC is allowing a 10-day period for all establishments to get the beverage off their shelves. Extracto de Malta must be removed by Sept. 1 or retailers can face fines of up to $1,000 and/or a maximum jail term of three years for selling alcohol without a license.

“It is imperative that we get this unlawful alcoholic beverage off the shelves immediately,” said Attorney General Jeffrey Chiesa. “It appears that Condal has tried to sidestep and circumvent the safeguards we have that protect the public. This drink is allegedly being sold at shops that can sell almost anything except alcohol, so the thought of carding someone never crosses anyone’s mind. There are many potential dangers here, most notably Extracto de Malta getting into the hands of unknowing children.”

At all the establishments visited by the Division, Extracto de Malta was stocked on shelves among soft drinks and specifically placed next to the soft drink Malta. Malta is a carbonated, non-alcoholic beverage brewed from barley, malt and hops. Malta is popular in Hispanic communities and is distributed by many companies, including Goya.

Extracto de Malta is brewed by Bavaria-St. Pauli in Hamburg, Germany, and imported by Condal. Its label does not include an “Alcohol by Volume” percentage, but the Surgeon General’s Warning about the dangers of alcoholic beverages can be found stickered on the back of the 12-ounce bottles.

“Licensees in New Jersey adhere to strict regulatory and enforcement guidelines to ensure that alcohol does not get into the hands of those who cannot buy it,” said Division of Alcoholic Beverage Control Director Michael Halfacre. “That this drink has been sold completely outside our system of regulation, through a shadowy backchannel, compromises at every level the integrity of the alcoholic beverage industry in New Jersey.”

The Division received a tip on this case in June from NJ Transit, who reported it had discovered during its employee monitoring process, that one of its bus drivers was drinking an alcoholic beverage on the job. When questioned by NJ Transit officials, the driver insisted he did not know the drink he was consuming, Extracto de Malta, was alcoholic. The driver said he bought the drink at a supermarket in Newark. Both NJ Transit and ABC investigators purchased Extracto de Malta from that store and sent its content for lab testing. Both tests reported the drink had an alcohol by volume of 3.5 percent.

Halfacre stressed the sale of unregulated alcohol posted a major public safety risk: “This drink is potentially being sold to children and unsuspecting adults, who may drive a motor vehicle or engage in other activities without realizing they may be impaired by the consumption of alcohol. This danger is self-evident, and we are taking steps to have it removed from store shelves immediately. ”

The ABC and Division of Consumer Affairs are also issuing a “Consumer Alert” to New Jersey residents warning them about the alcohol content in Extracto de Malta. The Division of Consumer Affairs, through its network of Consumer Affairs Local Assistance Offices, will issue flyers to bodegas, warning shop owners of the beverage and the consequences facing them for selling it. Residents are encouraged to call the ABC’s Investigations tip line (1-866-713-8392) to report establishments selling Extracto de Malta.

“The sale of alcoholic beverages that are not labeled as having an alcohol content, and that may be purchased by young people without being carded and without their parents’ knowledge, creates a genuine public danger and a real risk to consumers,” Eric T. Kanefsky, Acting Director of the New Jersey Division of Consumer Affairs, said. “Our partners at the county and local levels will notify stores that they must remove these items from their shelves, and will urge consumers to be wary of this alcoholic product should they encounter it on the shelf among soft drinks at their local grocery.”

In addition to the public safety concerns, Condal does not have a wholesaler’s license to sell alcoholic beverages in New Jersey. Licensed alcoholic beverage wholesalers in New Jersey are required to collect both federal excise tax and state alcohol tax. The ABC estimates that a case of alcohol equivalent to Extracto de Malta would yield 27 cents for state alcohol tax and $1.30 for federal excise tax.

Also, the product has not been brand registered in the state. The ABC requires that all alcoholic beverage brands sold in New Jersey be registered. The ABC requires brand registration as a consumer protection, so that if a problem arises with the beverage, the ABC has the ability to contact the brand owner and manufacturer.

However, no record of Extracto de Malta exists. In fact, according to the investigation, Condal was allegedly falsifying its invoices to bodega owners, recording sales of the prohibited beverage as “Crema de Coco,” in an apparent attempt to leave no paper trail.

Any person or establishment selling liquor in New Jersey is required to have a license. Potential licensees are required to disclose a wide range of personal information, including financial and criminal history, before they are allowed to own a license.

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