Pay-for-Play Gets Added Scrutiny

Beer distributor payments to freeze out competitors.

Massachusetts regulators have launched an investigation into whether beer distributors, brewers, and retailers are violating state law by agreeing to promote certain beers at bars and liquor stores in exchange for payments that freeze out competitors.

The investigators, from the Alcoholic Beverages Control Commission, told the Boston Globe that they have issued subpoenas to some unidentified breweries, distributors and retailers looking for records to determine whether payments are being made to get access to taps in bars and restaurants and shelf space at stores.

Illegal under state and federal liquor control laws, the laws were originally designed to keep large national breweries from dominating beer markets. Small breweries say the laws are still relevant because the popularity of craft beer has brought them into competition for limited space.

Breweries or distributors have been said to pay retailers to stock their beers instead of competitors, using free beer, gift cards and equipment including draft systems as inducements.

A spokesman for Treasurer Steven Grossman, who oversees the ABCC, warned the agency was prepared to take “strong corrective measures” against any company that violates the state’s liquor control laws. Punishment for these types of violations could range from warnings to suspension of a company’s liquor license or even revocation.

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