Category: Production

Inside Alcohol Law: The Corruption Chronicles, Part 1

The regulatory focus on alcoholic beverage industry corruption has its genesis in the pre-Prohibition American saloon. In the early part of the last century, brewers and distillers used many questionable — and some blatantly unlawful even then — sales techniques, such as excessive credit, free goods, secretly paying employees, consignment sales and other inducements to persuade saloon owners to carry their beer and spirits over competing brands. Preventing the reemergence of those widely used and abusive business practices has been a core concern of alcohol regulators since the early 1930s when Prohibition was repealed. These are the “tied house” laws, and they exist today, in one form or another, both federally and in every state (and with exceptions that vary from state to state). The perceived harm comes from increased consumer consumption of the specific alcohol brands to intemperate levels. This theory of intemperate consumption underlies almost all of the tied house laws as they were enacted in the original Federal Alcohol Administration Act. These cases being pursued by regulators in California and Massachusetts are worthy of attention. California: In early January 2017, the California Department of Alcohol Beverage Control (ABC) filed 34 accusations (agency indictments seeking license suspension or revocation) for providing things of value (television sets, coolers and draft systems, reportedly) against Southern California beer distributors and the various on- and off-premises retail accounts that received the...

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