State suspends license of Clear Lake bar accused of selling cheap liquor from refilled premium brand bottles

By: - October 19, 2020 6:10 pm

An Iowa tavern allegedly “staged” an array COVID-19 mitigation measures for the benefit of state regulators. (Creative Commons photo via Pxhere)

The state has suspended the liquor license of a Clear Lake bar opened in cooperation with the Surf Ballroom after workers were caught pouring cheap liquor into bottles that had held higher-shelf brands.

That is considered a health threat and a violation of state regulations, an administrative law judge ruled Monday.

The Surf Ballroom & Museum and MNG Restaurant Corp. announced plans for the Surf District Rock ‘N Roll Grill in 2016. The bar and restaurant is in a building next to the Surf Ballroom and contains artifacts from the historic ballroom used in a licensing arrangement. MNG owns and operated the business.

The Iowa Alcoholic Beverages Division said MNG will have its license suspended for 21 days. The business can appeal within 30 days. The case did not involve Surf Ballroom & Museum.

The Iowa Department of Public Safety filed a complaint against MNG, alleging bartenders had reused containers in violation of state regulations. A contested hearing was held Oct. 7.

Specifically, the company was accused of pouring Hawkeye vodka and whiskey into bottles that had held more expensive brands. The business also was accused of mixing Hawkeye Whiskey and “apple pucker” into a Crown Royal Apple bottle.

A company representative, Jeremy Maulsby, testified that the labels on a Jack Daniels and Crown Royal Apple were worn out because bartenders were required to wipe them at the end of each day, rather from heavy repeated use.

Maulsby denied the business was refilling premium bottles with cheaper liquor. He added that a funnel the state accused the business of using to transfer the alcohol was used instead to pour sugar for drinks, or beer used to make beer cheese.

Administrative Law Judge Thomas Augustine’s decision, issued Monday, said the bar had threatened customers’ health.

“These are serious violations that impact public health and safety,” Augustine wrote in his decision. “Putting liquor in used bottles poses all kind of health risks, especially if the bottles are not completely cleaned and dried.”

He added: “It is not lost on this judge the economic impact this decision will place on the licensee and its employees. However, licensee management brought this burden on themselves when they chose to refill bottles of liquor or otherwise not keep alcohol in its original container.

“Further, it is more likely than not that the licensee was previously unfairly enriched by selling cheaper well liquor as premium liquor. Patrons should have a right to get the drink they ordered and paid for without any worry that the liquor they receive is actually a cheap substitute from an unknown used bottle. Further, as stated, it is a major health and safety concern for alcohol not to be kept in its original container or staff otherwise transferring liquor into used bottles. This judge is especially troubled by the fake Crown Royal Apple being created by mixing two alcohols together to create
the imposter, adulterated liquor.”

A complaint was filed with the state by a former employee who frequents the business as a customer.

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Perry Beeman
Perry Beeman

Senior reporter Perry Beeman has nearly 40 years of experience in Iowa journalism and has won national awards for environmental and business writing. He has written for The Des Moines Register and the Business Record, where he also served as managing editor. He also is former editorial director of Grinnell College. He co-authored the recently published book, "The $80 Billion Gamble," which details the lottery-rigging case of Eddie Tipton.