Many studies of corruption have claimed that it is the size of the state and its bureaucratic apparatus that promote corruption. Other studies have suggested that it is the more recent New Public Management reforms that create opportunity for corrupt exchanges. Very few studies have investigated this issue systematically and empirically. The purpose of the present study is therefore to examine the relationship between market reforms and the conditions for corruption, using a qualitative case study of corrupt relations in the Swedish Alcohol Retailing Monopoly (SARM). The analysis shows that the market reforms increased the discretion of managers at SARM, established new informal relations between managers and private supplier companies and increased the demand for corrupt services among the suppliers. In contrast to earlier studies, the present study provides a better understanding of the complex interplay of the different organizational processes resulting from market reforms that may promote corruption.