Distributor accused of pay-to-play tactics in Massachusetts

The Alcoholic Beverages Control Commission in Massachusetts (ABCC) has officially accused distributor Craft Beer Guild LLC of a pay-to-play practice, offering rewards to retailers to get its beers stocked over its competitors’.

From the Boston Globe:

These are the first charges to emerge from a six-month probe into so-called pay-to-play practices that limit consumer choices by favoring one company’s products over another’s.

“The alleged wrongdoing in this case is serious,” said state Treasurer Deborah Goldberg, who oversees the ABCC, said in a statement. “As the commission examines this matter, we’ll continue the work to ensure license holders across the state are acting in a proper manner.”

This accusation by state regulators is the first charge of pay-to-play in at least 15 years in the state. If ABCC finds wrongdoing, Craft Beer Guild’s license to distribute alcohol could be suspended or revoked.

Martin Pomeroy and Eric Speed of Boston law firm of Bernkopf Goodman detailed the impact of pay-to-play on the industry for CBB back in December.

Past formal complaints to the ABCC have been limited and the issuance of violations for offenses has been non-existent. This could mean one of two things: Either the practice is not as widespread as some would believe or proving a violation of the regulations is very difficult. The ABCC, similar to many state regulatory bodies, does not have adequate resources (14 investigators who both review the license applications and conduct investigations into violations by licensees) to conduct major investigations into actions that do not deal directly with public safety or affect the general public. Additionally, “pay-to-play” allegations usually involve a private arrangement between the individual providing the unlawful compensation and the individual accepting it, neither of whom would be willing to admit wrongdoing.

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