Everett Beer Distributor Pays $750K to End Furtive Federal Pay-to-Play Investigation

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It turns out Everett's Craft Brewers Guild was in more trouble than we thought, stemming from allegations it's paid Boston bars tens of thousands of dollars to carry and prioritize its brands over others.

I don’t want industry members to consider getting caught the cost of doing business.

The ongoing "pay-to-play" investigation by the Massachusetts Alcohol Control Commission resulted in a record $2.6 million fine back in March, one the distribution company is currently contesting. But today, according to The Boston Globe's Dan Adams, the US Alcohol and Tobacco Tax and Trade Bureau (TTB) announced it will accept $750,000 from Craft Brewers Guild to settle a six-month federal investigation most people didn't even know was happening.

"The US bureau said the settlement is the largest the federal government has ever accepted from a single alcohol company for violating trade practice laws," said Adams. "But beyond the money, the decision by the US government to crack down on what has long been a tacitly-accepted practice will likely reverberate through the US beer industry."

The case of Craft Brewers Guild has apparently lit a fire within the agency's Trade Investigations Division.

“This is not something I intend to walk away from. You’re going to see further investigations in this area,” Robert Angleo, the Divisions's director, told Adams. “I would hope that industry members take notice of this, and take notice of the fact that this is a very significant . I don’t want industry members to consider getting caught the cost of doing business. I want them to realize there are significant consequences if we catch you committing slotting fee violations.”

If you're a bit murky on how all this came about, here are the crib notes: More than two years ago, in October 2014, a late-night twitter stream changed everything for beer distribution in Massachusetts. Dann Paquette, founder of the darling, now-closed local brewery Pretty Things Beer & Ale Project, laid it all out in a series of tweets that would eventually gain the attention of of the ABCC, and ultimately, we've just learned, federal agencies as well.

@Ryan_Witter That's what blows my mind. Right now one of the hottest newish brewers in MA pays for lines all over the place.

— PrettyBeer (@PrettyBeer) October 14, 2014
Local bars were accused point-blank of accepting payments to stock certain brands, some of which have been cited by the ABCC as knowingly engaging in pay-to-play practices with Craft Brewers Guild. Despite Paquette's claim, no specific breweries have been fined as part of the investigation.

For more on the background, see here, and below.

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