Set the scene. Snowstorm Stella rages in northeast. Attendees of NABCA’s Legal Symposium in DC hatch escape plans. Atty Richard Blau reminds: “The Gods of Ancient Greece chafed” at the kind of “orderly” mkts sought by regulators of the oft stormy, sometimes chaotic alc bev biz. With eyes on airline skeds, Richard and colleagues peeked into Pandora’s Box of hot topics and challenges now engaging regulators and industry attys alike. They included lotsa familiar issues: pay to play, CatMan, tied house, direct sales, private label and more. Here are highlights.
Pay to Play in MA and CA Turns out pay to play ain’t confined to US. As Mass ABCC enforcement chief Ted Mahony revisited pay-to-play story that broke in late 2014, Ted’s counterpart in Alberta, Canada described very similar doings in his province. Ted acknowledged key statute in MA very much open to interpretation. Distrib Craft Brew Guild (which paid state/fed fines) has serious questions about status/clarity of Mass law/regs it’s accused of violating and is challenging charges in court. Key points from Ted: 1) before pay-to-play charges broke on Twitter in 2014, he and his agents focused on public safety, not trade practice complaints (which were rare), and would still prefer to be focused on public safety; 2)self-regulation works and industry members want to be in compliance; 3)fact that retailers absolved is “significant problem” for ABCC and laws already proposed to keep retailers in loop, or else they’ll be “strong arming” distribs “like there’s no tomorrow.” In the end, ABCC “wanted to get industry’s attention.... They mistook our benevolence for weakness.” Aim: create a deterrent and, echoing Richard, “regain industry stability. We want industry to be stable.” At same time, “there has to be regular reasonable enforcement of trade laws.... $10,000 payments are different than a couple of tickets to a ball game.”
Alberta’s Dave Berry laid out remarkably similar scenario from his province, tho direct payments there from suppliers to retailers (province itself is wholesaler). As in US, retailers were “demanding” payments, there was “huge abuse of gift cards” by sales reps. Also, these investigations demand lotsa time and tons of documents. And like Ted, Dave advised that by and large industry wants to be in compliance, retailers have to be included in enforcement/investigations, dialogue/training do work to deter pay to play.