Last Call: Craft Beer Guild Appeals $2.6 Million ‘Pay-to-Play’ Fine; 4,000 Brewers Have Adopted the BA Indie Seal

Craft Beer Guild’s Appeal Goes Before Massachusetts High Court

Massachusetts beer wholesaler Craft Beer Guild’s appeal of a $2.6 million fine for breaking state laws that prohibit unfair trade practices and illegal “pay-to-play” activities went before the state’s Supreme Judicial Court earlier this week, according to Boston radio station WBUR.

The appeal stems from an investigation by the Massachusetts Alcoholic Beverages Control Commission (ABCC) into a Sheehan Family Companies subsidiary that found the wholesaler had “engaged in a pervasive illegal enterprise involving numerous retailers and corporations that spanned at least five years.”

The ABCC slapped Craft Beer Guild with a 90-day license suspension in 2016, but the distributor agreed to a $2.6 million fine — the largest ever imposed on any Massachusetts alcoholic beverage license holder — in lieu of suspension. Craft Beer Guild later appealed the fine, asking a Massachusetts court to determine that it “was unlawful and require it to be reduced, refunded or, alternatively, recalculated and reduced.”

In upholding the fine last year, a lower court ruled that the discounts amounted to illegal price discrimination because they were not offered to all bars.

During oral arguments before the Supreme Judicial Court this week, an attorney for Craft Beer Guild argued that rebates were legal because they were not given to bars directly, but third-party marketing firms. However, the state argued that those marketing firms served as fronts for the bars.

A ruling is expected within 130 days.

TTB Fines Miami A-B Wholesaler $1.5 Million

Miami-based Eagle Brands has agreed to pay the Alcohol and Tobacco Tax and Trade Bureau (TTB) a $1.5 million offer in compromise for alleged trade practice violations that occurred over a 3-year period between 2015 and 2018. The $1.5 million fine is the largest single offer in compromise in the TTB’s history.

According to the TTB, employees of Eagle Brands, which distributes Anheuser-Busch products, allegedly “arranged for inducements to be given to retailers in exchange for draft beer placements at retailer locations, to the exclusion of other brands.” The alleged inducements were “disguised as banquet events, credit card payments for rebates or consumers samplings.

Additionally, Eagle Brands was accused of providing retailers with draft systems with the understanding that only the wholesaler’s products could be served via the systems.

Those actions amounted to tied house and exclusive outlet violations of the Federal Alcohol Administration Act, the federal agency said.

Recall that in July 2017, the TTB and the Florida Division of Alcoholic Beverages and Tobacco (ABT) announced a joint investigation of alleged “pay-to-play” schemes throughout greater Miami, which the agency called the “largest trade practice enforcement operation” in its history.

Ex-Boston Beer Exec Joins Fintech Board

Former Boston Beer Company CEO Martin Roper has joined the board of directors of Financial Information Technologies LLC (Fintech), a data, analytics an invoice processing platform for wholesalers.

Roper retired from Boston Beer earlier this year after more than two decades of serving in C-level positions for the maker of the Samuel Adams, Truly Spiked & Sparkling, Angry Orchard and Twisted Tea brands. He will now be tasked with providing oversight of Fintech’s leadership team as well as assisting with policy decisions, according to a press release.

Constellation Brands to Invest $100 Million in Female-Led Startups

Constellation Brands has launched a new program via its venture capital arm aimed at investing $100 million by 2028 in businesses founded or led by women within the beverage alcohol space and adjacent categories.

The first investments through the Focus on Female Founders program are going to Texas-based cocktail maker Austin Cocktails and Vivify Beverages, which makes the Bravazzi hard Italian soda and Itz Spritz hard spritzer brands.

In a press release, Constellation chief growth officer Mallika Monteiro said “meaningful investments” will be made in companies “doing disruptive and innovative work across beverage alcohol.”

“Broadening our focus on this critical demographic will drive incremental growth for our business, enhance our relevance, deepen our consumer knowledge base, and broaden our pipeline of ideas and talent,” she said.

In addition to capital, the companies in the program will have access to Constellation’s wholesalers and retail partners as well as leverage its staff’s expertise. Companies interested in applying for the program can find more information in this link.

Fort Point Acquires San Francisco Brewpub

Fort Point Beer Company has acquired the 3-year-old Black Sands Brewery in the Lower Haight neighborhood of San Francisco, Eater reported.

Fort Point will keep the Black Sands name, “for now,” as well as maintain the brewpub’s entire staff, including head brewer Cole Emde, according to the outlet.

Fort Point, which has primarily focused on growing through self-distribution, adds another retail outlet to a stable that includes an outpost in San Francisco’s Ferry Building Marketplace and an under-construction taproom and restaurant on Valencia Street that is slated to open in the spring.

Founders to Contract Brew All Day IPA at Avery

Founders Brewing Company will shift some production of All Day IPA to Avery Brewing Company’s Boulder, Colorado-based manufacturing facility in 2019, the Michigan craft brewery announced on its website.

Batches of All Day IPA brewed at Avery will begin shipping to the West Coast early next year, the company said. Founders added that its production team conducted several quality checks of the beer being produced at Avery’s facility.

“We’re confident in their system’s ability to replicate All Day IPA,” the company said.

Founders and Avery share a minority investor in Spanish brewer Mahou San Miguel, which owns a 30 percent stake in each beer company.

4,000 Indie Brewers Adopt BA Seal

The Brewers Association’s (BA) independence seal has reached another milestone: 4,000 U.S. craft breweries have signed a licensing agreement to use the upside down bottle logo, according to the trade organization’s Facebook page.

The BA unveiled the badge in June 2017 and offered its use to any brewer who meets the group’s definition of a craft brewer (small, independent and traditional), has a valid TTB brewer’s notice and signs the licensing agreement.

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