Court Documents Show Beer Distributors Admitting to ‘Pay-to-Play’ Tactics
So many new beers have entered the market over the past couple decades that when you walk into a bar, you never know what you’re going to find. Maybe you’ll see the old standbys: Bud, Miller, Coors. Maybe you’ll see unique craft beers you’ve never heard of. So how do bars choose what they’re going to stock? We’d like to believe beer buyers choose brews they think their clients will like, or that they personally like, but the truth may be a bit more underhanded. By all accounts, “pay-to-play” is alive and well in the beer distribution world.
“Pay-to-play,” for those unfamiliar with the concept, is when distributors offer incentives to encourage (aka, bribe) bars to stock their products. Despite the name, those incentives usually aren’t cash, but something else of value: from free beer to new draft equipment to draft line maintenance. Regardless of the gift, however, unlike in other industries, these deals are illegal thanks to post-Prohibition rules.
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But though the rules attempting to stop pay-to-play stem back to the 1930s, any honest person in the beer world will tell you that the practice has thrived for a long time. As the Boston Globe reported today, recently unsealed court documents detail exactly how these kinds of methods were employed by a New York distributor, Union Beer, as recently as 2011 – and how they say their competitors were doing the exact same thing.
“All ... wholesalers that we compete with engaged in the same activity,” Paul Bussiere , an assistant general manager at Union Beer, testified during a lawsuit in 2011. “What we did was in response to competition.” Testifying during the same case, another Union employee, Matthew Rogers, was quoted as saying that giving away free beer “was a typical trade practice in New York.”
These revelations aren’t intended to vilify Union Beer, who claims they’ve stopped engaging in illegal sales tactics after a crackdown by the New York State Liquor Authority back in 2011. Though Union Beer was the one testifying in the deposition, it appears any number of distributors could have made similar admissions. “I wish I had a whole list of beer cases to show you,” Jacqueline Flug, the New York Liquor Authority’s general counsel, told the Globe. “It’s not for a lack of trying. We just haven’t been able to prove it.”
Since 2011’s city-wide meeting between the State Liquor Authority and New York City beer distributors, the hope is that such pay-to-play tactics have been curbed. Still, that’s just one city. If the Globe’s article shows us anything, it’s that beer lovers should look at every bar’s beer selection with eyes wide open.