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Wegmans fined for allegedly managing liquor stores

New York authority claims grocer exercised ‘significant control’

Russell Redman

November 29, 2018

3 Min Read
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The New York State Liquor Authority (SLA) has fined Wegmans Food Markets Inc. for allegedly managing five affiliated liquor stores without a proper license.

Wegmans agreed to pay $750,000 in civil penalties to settle eight charges, including violations for availing its license to five upstate New York liquor stores, availing the license of a wholesaler, aiding and abetting illegal gifts and services, and illegally trafficking in wine, the New York SLA said. In announcing the case last week, the agency claimed Wegmans was “effectively managing” the stores in violation of state alcoholic beverage control (ABC) laws.

A spokeswoman for Wegmans declined to comment to Supermarket News. The Rochester, N.Y.-based retailer operates 98 supermarkets in six states.

The New York SLA said each of the five Wegmans-affiliated liquor stores also agreed to pay $75,000 in fines for availing their licenses to Wegmans and accepting illegal gifts and services from a wholesaler. Published reports said each of the liquor stores is owned by a member of the Wegman family.

Altogether, the Wegmans and liquor store fines totaled $1.125 million.

New York’s ABC law requires liquor stores to be independently owned and operated. It also bans chain liquor stores, prohibits grocery stores from selling wine or spirits and, under gifts and services provisions, bars wholesalers from giving anything of value to retailers to incentivize sales.       

As part of the settlement, Wegmans appointed a new corporate compliance officer and implemented a new corporate compliance program to prevent future legal complications, the SLA said.

The matter began when the SLA received a complaint that Amherst Wine Partners LLC, a liquor store doing business as Amherst Street Wines & Liquors in Buffalo, N.Y., allowed Wegmans to “effectively control their business” by managing purchasing and pricing decisions and the store’s relationship with various wholesalers, the agency said.

In its investigation, the SLA determined that Wegmans exercised “significant control” over Amherst Street Wines & Liquors as well as over four other “affiliated stores,” even though the grocery chain isn’t licensed to sell wine or spirits in New York. The four stores included Whitehouse Liquor & Wine and Pittsford Century Wines & Spirits, both in Rochester; Johnson City Liquor & Wine in Johnson City; and Liquor City Wine & Liquors in Fayetteville.

In published reports, Wegmans disputed charges that it controlled the businesses of the five liquor stores, despite not contesting the SLA’s claims.

“What these stores have in common is that each is individually owned by a Wegman family member, and each owner is trying to run their store like we run Wegmans, with low prices, great selection and great service,” Wegmans said in a statement released to local media. “It’s unfortunate that the SLA chose to credit complaints from competitors of these liquor stores over the actual facts presented to them during the investigation.”

Also in the statement, Wegmans noted that it “conducts its business with the very highest integrity” and “immediately cooperated and corrected the alleged violation.”

In a separate but related case, the New York SLA said it also levied a $225,000 fine on Milton’s Distributing Co. for illegally allowing Wegmans to use its wholesale license to traffic in wine and spirits. The agency said that, during its investigation of Amherst Wine Partners, it discovered that Milton’s enabled Wegmans to use its license to negotiate and contract with suppliers to procure liquor and wines for the affiliated liquor stores.

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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