After nearly a year-long investigation, the Alcoholic Beverages Control Commission (ABCC) has cited a handful of Boston bars with violating state laws that prohibit breweries and beer distributors from bribing bars to carry their products.
The list of violators include: Jerry Remy’s Sports Bar & Grill in the Seaport, Coogan’s in the Financial District, Gather in the Seaport, Game On outside Fenway Park, and Estelle’s in the South End. All were cited in a report by ABCC investigators that was released Wednesday.
Such practices are referred to as “pay to play,’’ where bars receive cash or kickbacks from breweries and beer distributors in exchange for featuring their beers on tap. The practice is illegal and has been since the repeal of Prohibition, as a way to give small breweries a competitive edge.
Last fall, Dann Paquette, owner of Pretty Things Beer and Ale Project, a Somerville-based beer company, shed light on bribes flowing from distributors to bars through Twitter. A day later, the ABCC was investigating local bars and beer distributors for violating state regulations.
The ABCC found that Everett-based Craft Beer Guild LLC, the largest distributor in the state, was bribing local bars to use its products rather than those of local competitors. Craft Beer Guild is responsible for distributing Allagash, Brooklyn, Yuengling, Smuttynose, Mayflower, Pretty Things, and many other local and national craft beers. The distributor was charged by the ABCC for violating pay to play in June.
Now, the bars that took bribes from Craft Beer Guild are facing charges of their own.
Investigators found an invoice for $4,700 from The Briar Group, which owns Gather and as well as other bars and restaurants, to Craft Beer Guild, showing that the restaurant group charged a $20 fee per keg to keep Craft Beer Guild’s products on tap. The ABCC also found that Coogan’s owner, the Glynn Hospitality Group, received $13,500 from Craft Beer Guild last year.
The distributor also paid the Wilcox Hospitality Group, which owns Estelle’s and other bars, $20,000 in 2013 for “marketing support,’’ as well as $10,000 to Jerry Remy’s, owned by The Cronin Group, the same year, according to the report.
The Lyons Group, who owns Game On, allegedly received $12,000 that same year to carry Yeungling products. Payments to the group were made through an alleged marketing company called Bank On It, which has no employees on its payroll, according to the report. Payments to other bars were sometimes made through similar venues.
The Briar Group, the Lyons Group, The Cronin Group, the Wilcox Group, the Glynn Hospitality Group, and Craft Beer Guild did not immediately respond to requests for comment. Earlier on Wednesday, all except the Wilcox Group told The Boston Globe they would not comment on the charges.
Kickbacks have played a role in the industry for years, putting smaller breweries at a disadvantage, Paquette said last year. Similar practices are legal in other venues, such as grocery stores, but outlawed in bars due to stricter regulations on alcohol. While many assume that the bribes are common and occur on a large scale, few distributors and bars are ever charged.
The ABCC has scheduled a hearing for the bars on November 3.