Judge upholds $2.6m fine against US wholesaler

A Massachusetts judge has upheld a decision to impose a $2.6 million fine against US wholesaler Craft Beer Guild after it was found to have made “pay to play” payments to distributors in the Boston area.

An investigation into Craft Beer Guild began in October 2014 with the Massachusetts Alcoholic Beverages Control Commission (ABCC) finding that the US wholesaler,  which distributes more than 200 craft brands throughout the state, had paid bars about $120,000 over a two-year period from 2013 to 2014 for tap handle placements.

During a hearing, Craft Beer Guild admitted to paying up to $2,000 per tap handle and as much as $20,000 annually for “committed lines.”

In February 2016, the ABCC gave the Craft Beer Guild, a subsidiary of Sheehan Family Companies, the choice of a 90-day license suspension or a $2.6m fine after it concluded that the company had “engaged in a pervasive illegal enterprise involving numerous retailers and corporations that spanned at least five years.”

Having made payments to 12 licensees in the Boston are, the ABCC said the company had “gone to great lengths to hide its knowingly unlawful conduct”.

The Craft Beer Guild initially said it would pay the fine, in lieu of the suspension, but later appealed the decision in March of 2016, claiming that “the penalty, including the fine, was unlawful and require it to be reduced, refunded or, alternatively, recalculated and reduced.”

This week a Superior Court judge upheld the decision, dismissing the Craft Beer Guild’s argument that the legislature had invalidated “regulatory enforcement of the anti-[price] discrimination” law, as reported by the Boston Globe.

In a statement released on Tuesday, the ABCC said it was “very pleased the court agreed with our original ruling”, while the Craft Beer Guild has said it is is “reviewing the court’s ruling” with an appeal still possible.

A further hearing is scheduled for November 28.

Leave a Reply

Your email address will not be published. Required fields are marked *

Please note that comments are subject to our posting guidelines in accordance with the Defamation Act 2013. Posts containing swear words, discrimination, offensive language and libellous or defamatory comments will not be approved.

We encourage debate in the comments section and always welcome feedback, but if you spot something you don't think is right, we ask that you leave an accurate email address so we can get back to you if we need to.

Subscribe to our newsletters

Events & Admin Assistant

The Drinks Business
London SE1, UK

Brand Manager - Key Wine Partners

MMI Dubai
Dubai - United Arab Emirates

Business Development Manager

Bashall Spirits
Lancashire, UK

Territory Manager - London​

Cadrona Distillery
London, UK

Business Development Manager

Lucozade Ribena Suntory
UK

Customer Marketing Manager

Bibendum
London NW1, UK

Export Assistant Co-ordinator - Maternity Cover

Speciality Drinks
Whitby Avenue, London NW10 7SF, UK

Customer Services Administrator - On Trade

Speciality Drinks
Whitby Avenue, London NW10 7SF, UK

Fruit Focus 2019

East Malling,United Kingdom
17th Jul 2019

International Bulk Wine and Spirits Show

San Francisco,USA
23rd Jul 2019

The Wine Show Chelsea 2019

London,United Kingdom
18th Oct 2019
Click to view more

The Tuscan Masters 2019

Deadline : 1st July 2019

The Global Grenache Masters 2019

Deadline : 5th July 2019

Click to view more

The Global Riesling Masters 2018

View Results

Global Chardonnay Masters 2018

View Results

Click to view more