It is illegal for breweries to offer keg deals, cash, or other financial incentives to bars in exchange for selling their products.
Yes, I’ve written about this more than a few times over the last five years (including once again for my upcoming column in the fantastic quarterly publication The Growler. Catch the latest issue on newsstands soon!), but in case you need a refresher, here’s Regulation 720 from Ontario’s Liquor Licence Act:
A manufacturer of liquor or an agent or employee of a manufacturer shall not directly or indirectly offer or give a financial or material inducement to a person who holds a licence or permit under the Act or to an agent or employee of the person for the purpose of increasing the sale or distribution of a brand of liquor.
Well guess what? It is also illegal for bars to ask breweries for keg deals, cash, or other financial incentives in exchange for selling their products. And now you can snitch on them.
Because I have written about this rampant practice a few times and because there aren’t many other avenues to have these conversations, a few years ago I started to receive emails from frustrated breweries across the province. Mostly, brewers would forward me the blatant requests for free shit that they get from bar owners and front of house managers on a virtually daily basis. The tone has always been “Here’s another one!” but the subtext to me was always “What the hell can we do about this?”
The answer seemed to mostly be “Not much, really.” The system of graft for tap lines is so ingrained in the hospitality industry, fighting it sometimes feels futile. I’ve even seen threads in hospitality industry Facebook groups where people are blatantly boasting of the free shit they get or are comparing notes on which breweries will pay the most to help install a draught line.
And so, inspired mostly by all the emails I was getting, I launched a website that allows people to post anonymously and share the emails from bar owners they were previously sending me. It’s called Dirty Lines and it does still get some occasional action. I take no responsibility for the content there, incidentally. I don’t investigate any claims. I don’t vet submissions. It just lives there as a mechanism to vent, essentially.
Recently, having received yet another email, I vented on twitter that in addition to being illegal to provide these inducements to bars, it really should be illegal for bars to ask for them, too. In response to my tweet, the AGCO slid into my DMs to be like, “Uh, that actually is illegal, too.”
Ray Kahnert is a Senior Advisor in the Communications and Corporate Affairs Division of the AGCO and, in a follow-up email, he helpfully reminded me that our legislation actually means that all those emailed requests bars send to brewers are probably breaking the law, too.
“Ontario’s Liquor Licence Act (LLA) not only prohibits manufacturers from offering [incentives],” he says, “it also prohibits licensees from directly or indirectly requesting any financial or material benefit from a manufacturer.”
Kahnert also let me know that the AGCO has launched a new online portal, iAGCO. The idea of iAGCO is to improve and modernize the AGCO’s service delivery by “offering its customers an easy, convenient and digital way of doing business with the Commission.”
And while it’s largely set up so that licensees and manufactures can do business with the AGCO more directly online, there is a “Submit a Complaint” function, and you don’t need to create an account to access it.
“All complaints are reviewed,” Kahnert tells me. “And of course, the more information the AGCO Inspector receives about a complaint, including establishment information, the better.”
He also reminded me that, despite what a lot of brewers might think, the option to send anonymous complaints isn’t actually new. “The ability to complain or object ‘anonymously’ was always available – pre-iAGCO,” he says. “A person could complain by phone, email, mail and request anonymity. The AGCO would honor that request. When iAGCO came around, the same option was included in the design. Perhaps there is more comfort with anonymity through this on line feature.”
Personally, as the recipient of many online “complaints” in the form of email, and having seen the submissions that the Dirty Lines site still gets, I feel like there is definitely more comfort with online reporting, and I feel like if brewers knew about it, they would use it. Thus this blog post.
It is also, of course, probably worth noting that the AGCO has yet to issue any penalties related to inducements. As I noted in July of last year, the Ontario government has never issued a fine related to this regulation and Kahnert confirms this is still accurate. “As we mentioned to you earlier this year,” he says, “the AGCO has not issued any monetary penalties related to inducements.”
But perhaps the launch of iAGCO will change that and, in turn, start to curb the practice.
Ben's Beer Blog 
Crickets? Shocking.
I’m not shocked by the “crickets”. To be fair, it’s not an issue that the average beer drinker / bar patron thinks much about.
It’s a very important topic for those in the industry but bar-goers are thinking about the tap list, the menu, the friendliness of the staff, the decor, pretty much anything other than if the bar asked for free stuff.
It’s an interesting post but I hardly expected the comments section to be set ablaze with righteous indignation.
Yeah, I wasn’t expecting a slew of examples here in the comments either. Many brewers or brewery reps have “liked” or shared the article on social media. I take that to mean they’re supportive of using the anonymous online reporting option. Time will tell, of course.
Not to troll, or to take any counter stance, but offering a rebuttal to perhaps stimulate some discussion. Could it be argued that the breweries are technically purchasing advertising? If the bar is providing services in exchange for goods/amounts received, the transaction may no longer be considered an “inducement”. Notwithstanding every other clause in the excert of Reg 720 quoted above may be offended, the rule itself does not have application absent an “inducement”. Where the two persons engaged in the transaction are arms length, it would difficult to argue the valuation of the services rendered by the bar (e.g. advertising) differ to amounts received such that there is an element of an inducement. This is likely compounded by further window dressing such as separate contracting parties (e.g. brewery MarketingCo) being legally distinct from manufacturer (and potentially not acting in the capacity of an “agent” of manufacturer). May explain the reluctance of AGCO to pursue. I dont work in the industry so have no actual knowledge of whether the arrangements are offensive from a legal standpoint, but certainly from a social perspective, I can see the offence.