Iowa State Fair beer contract leads to federal investigations, fines

Iowa State Fair officials are quiet about their role in negotiations with distributor of Des Moines beer accused by state and federal authorities of unfair trade practices and bribing the vendors to sell more beer with cash, prizes, and $ 100,000 authorized sponsorship.

Fair Manager Gary Slater did not respond to repeated requests to be interviewed.

In brief written responses to specific questions on Thursday, spokeswoman Mindy Williamson said fair officials were first notified of a 2020 investigation into Iowa Beverage Systems by the alcoholic beverages division of the ‘Iowa.

This state investigation uncovered several violations, including commercial bribery, which led to a fine of $ 15,700. Another investigation by a US Department of the Treasury office, which uncovered various violations of federal law, settled his case this month with a fine of $ 325,000.

Following:Iowa beer distributor fined $ 325,000 for illegally paying for secure taps at Iowa State Fair grandstand

Thousands of people fill the podium for a performance at the Iowa State Fair on Friday, August 13, 2021.

The Treasury’s Office of Alcohol and Tobacco Tax and Commerce accused Iowa Beverage, of 2115 NE 58th Ave., of negotiating a sponsorship in early 2019 where, in return for payment of $ 100,000, the company got beer taps to the podium from which its beer would be sold.

Iowa Beverage also made illegal payments to another retailer that sold beer at various locations in the fairgrounds in 2017, 2018 and 2019, according to the bureau’s complaint.

Williamson declined to shed light on the three-year sponsorship agreement between Iowa Beverage and Meg Courter, head of sponsorships for the Blue Ribbon Foundation. The Blue Ribbon Foundation is the non-profit arm of the fair that raises funds for fairground maintenance and capital needs.

A copy of that deal, which Williamson leaked, shows that the contract called for the sponsor to “keep all handfuls of beer except 2 on the podium” in return for marketing, publicity and free concert tickets. However, the line on the contract specifying the beer handles were crossed out with the initials “MC” on the copy of the contract provided. It is not known when this happened or if the distributors had the same contract in previous years. .

Following:‘The Show Will Go On’: The Behind-the-Scenes Story of How Beloved Iowa State Fair Weathered the Pandemic

A line in Iowa Beverage's sponsorship contract with the Blue Ribbon Foundation has been crossed out.  But we don't know when.

Iowa State Fair vendors who sell food and alcohol at the state’s largest attraction are required to donate 22% of their proceeds to the fair. In 2019, the fair generated $ 4.7 million in fees on vendor food and alcohol sales, Williamson said.

But this is not the amount made by distributors, who provide to sellers. Pledging all but two beer taps at Iowa Beverage would have secured substantial beer sales for the company given the large number of taps at the grandstand, where concerts are held every night.

When asked how many beer taps Iowa Beverage received in 2019, Williamson only replied that the distributor has the same number of taps as in the past.

“There are 50 to 60 different tappers from 3 to 4 wholesalers in the grandstand and they are changed daily depending on the logistics of what is available and the size of the crowd,” she said.

She said the remainder of the three-year contract was canceled after the fair learned of the investigations.

Williamson also could not identify which of the 13 vendors who sell beer at the fair were paid in cash or in prizes by Iowa Beverage, claiming those agreements are between the vendor and the wholesaler.

Following:Missing the Iowa State Fair? Now is your second chance to try one of the most surprising new foods.

The Iowa Alcoholic Beverage Division also revealed on Thursday that it found state violations against Iowa Beverage in 2017 and 2018 ahead of the 2020 findings.

By paying retailers and securing the taps at the podium, Iowa Beverage violated state and federal laws, drafted after Prohibition, aimed at preventing corruption and ensuring a level playing field between distributors in alcohol sales. licensed.

Iowa Beverage officials did not respond to phone calls Wednesday or Thursday asking for comment on the state and federal investigations.

Lee Rood’s Reader’s Watchdog column helps Iowa residents get answers and accounts from government officials, the justice system, businesses, and nonprofits. Reach her at [email protected], at 515-284-8549, on Twitter at @leerood or on Facebook at Facebook.com/readerswatchdog.


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