In 2016, the ABCC said the distributor spent around “$120,000 to pay kickbacks” to a dozen Boston-area establishments “in a pervasive illegal enterprise’’ that spanned at least five years. The distributor ended up paying a $2.6 million fine, the largest in the state agency’s history.

The state’s highest court Thursday sided with a Suffolk Superior Court judge who ruled in 2017 that the Alcoholic Beverages Control Commission correctly applied antibribery rules against Everett-based Craft Brewers Guild that had improperly paid bars to put its products on tap.

The Supreme Judicial Court has sided with Massachusetts alcohol regulators in a legal fight with a large beer distributor over the state’s ban on so-called pay-to-play arrangements in the industry.


In a statement, the ABCC said it is “committed to ensuring an equal playing field in the alcoholic beverages industry” and was pleased with the court ruling “upholding the regulation that prohibits manufacturers and wholesalers from bribing retailers.”

A spokesman for the owner of Craft Brewers Guild, Sheehan Family Cos., said the company is disappointed, but he also noted the decision provides important clarity to the industry.

In a separate case, the court dismissed a similar antibribery finding against Rebel Restaurants, owner of the former Jerry Remy’s bar in the Seaport that was accused of receiving the inducements, ruling the state regulation does not clearly prohibit retailers from accepting such offers.

The attorney for Rebel, Tom Kiley, said the company is “gratified” by the court’s interpretation of the state rule. “Its application to a retailer like Rebel leads, the court says, to some absurd results,” Kiley said, “Retailers don’t know what prices or discounts would be offered to others for the acceptance of a rebate.”

Craft Brewers Guild distributes dozens of specialty beers, from major brewers such as Yuengling and Lagunitas, and from local companies, including Wachusett Brewing Co. and Ipswich Ale Brewery.


Paying for product placement is not uncommon in other retail sectors, such as grocery stores, where big distributors pay for eye-catching shelf space for cat food, cereal, and other merchandise. But the practice of “pay to play” was banned in the alcohol industry by many states at the end of Prohibition to keep large national brands from dominating local markets.

Critics, though, complained the practice was rampant in the booze businesses and said it stifled competition by preventing smaller or newer craft beer makers from getting into local bars and restaurants.

In its proceedings with the ABCC, Craft Brewers Guild had acknowledged it would pay bars $1,000 to $2,000 a year for each tap handle they dedicated to a beer distributed by the Everett-based company. However, its attorneys argued at the time that pay-to-play prohibitions were rarely enforced and even legally invalid because of long-ago changes to state alcohol regulations.

Craft Brewers Guild sued to overturn the ABCC judgment in 2016, arguing the regulation was rendered invalid decades ago when the Legislature repealed a law that had banned most discounts on wholesale beer purchases by retailers.

But in October 2017, Suffolk Superior Court Judge Douglas H. Wilkins rejected Craft Brewers Guild’s plea, saying that a longstanding prohibition on anticompetitive “price discrimination” remained in force. It was his decision the SJC upheld Thursday.

Massachusetts regulators had brought a separate pay-to-play case against a local beer wholesaler owned by Anheuser-Busch for allegedly giving away nearly $1 million in refrigeration equipment to package stores and bars to push sales of Budweiser and other products while stifling those of other brewers. But the ABCC’s three commissioners subsequently dropped the case, ruling that Anheuser-Busch paid for the equipment and retained ownership of the items, not the distribution subsidiary that comes under state regulation.


Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.