Massachusetts probes beer industry for possible illegal inducements to stock certain brands

IndustriesAssociated Press

Massachusetts regulators are investigating whether beer distributors, breweries and retailers are violating the law by paying to have certain brands sold in bars and at liquor stores, while at the same time shutting out rivals.

Investigators for the Alcoholic Beverages Control Commission have issued subpoenas to several breweries, distributors and retailers for records to determine whether they are paying for, or demanding payments for, access to taps and shelf space, according to a story Friday in The Boston Globe (http://bit.ly/1yEQkKL ).

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The practice, known as pay-to-play, is illegal under state and federal laws.

"We're looking at any and all forms of inducements," said Frederick Mahoney, chief investigator for ABCC. "This is ongoing, and this may not stop here."

He refused to identify which companies were under investigation.

Inducements can take several forms, including paying bars, restaurants and retailers to stock particular beers while keeping out competitors, or through gifts, including expensive bar equipment.

A spokesman for Treasurer Steven Grossman, who oversees the ABCC, said the agency was prepared to take "strong corrective measures" against any company that violates the state's liquor control laws. Punishment could range from warnings to suspension of a company's liquor license to revocation.

An industry group, The Beer Distributors of Massachusetts, acknowledged some of its members have received records requests.

Those members "cooperated with the ABCC investigators, provided this information and will ... continue to cooperate and respond in a timely manner," President Bill Kelley said.

One brewer who received a subpoena, Chris Tkach of Idle Hands Craft Ales LLC in Everett, said investigators mostly asked him general questions about pay-to-play and did not indicate why he received a subpoena.

He said his company has never paid to have his beer stocked, nor has it been asked for payment. He did , however, say that one bar owner told him he could no longer stock Idle Hands products because a competitor had bought the bar new tap equipment that had to be reserved for that company's brews.

Harpoon Brewery of Boston and Yuengling Brewery of Pennsylvania said they provided the ABCC with requested information. Both breweries said they did not engage in pay-to-play practices.

The two largest breweries in the country, Budweiser parent Anheuser-Busch InBev, and MillerCoors, said they had not received requests from ABCC.

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Information from: The Boston Globe, http://www.bostonglobe.com