Manalapan Liquor Store Must Pay $90,000 Fine To State

MANALAPAN, NJ – Vingo Wine & Spirits in Manalapan recently incurred a fine for $90,000 to the state in connection with a discriminatory trade practice investigation, according to the New Jersey Attorney General.

The Manalapan store engaged in unfair trade practices with two of New Jersey's biggest liquor wholesalers, the Office of the Attorney General said in a release. Vingo is one of twenty retailers across the state that will also pay a total of $2.3 million for their roles in the scheme.

The state Alcoholic Beverage Control said if the liquor stores did not pay the fine, they risk losing their license.

Wholesale manufacturers Allied Beverage Group and Fedway Associates are also mandated to shell out a whopping $4 million after a two-year investigation conducted by the ABC’s Enforcement and Investigations Bureaus found discriminatory trade practices that unfairly favored certain retail customers. It was found that Allied Beverage Group and Fedway Associates (which account for 70 percent of wine and 80 percent of spirit sales in the state respectively) unfairly favored larger retailers and put smaller retailers at a disadvantage by granting credit extensions and interest-free loans, among other discriminatory practices.

“Simply put, Allied Beverage Group and Fedway Associates rigged the market in favor of a handpicked group of powerful retailers, leaving smaller businesses struggling to compete,” said New Jersey Attorney General Gurbir S. Grewal.

“The unprecedented monetary penalties imposed reflect the egregiousness of this conduct and the widespread negative impact it had on New Jersey consumers and retailers. This settlement sends a clear message that we will not tolerate this manipulative and anticompetitive behavior.”

The two wholesalers manipulated the retailer incentive program (RIP), which provides cash rebates to retailers for purchasing certain quantities of beverages. The investigation found that Allied Beverage Group and Fedway Associates were giving certain retailers an advantage by issuing rebates more often and in more amounts than permitted. The companies also did not wait the required 30 days before issuing rebates, therefore allowing retailers to use the money to pay for orders for which rebates were issued (which goes against ABC regulations).

The wholesalers also falsified documents related to RIPS and/or used undocumented gift certificates to make cash payments to specific retailers.

“Retail incentives are a legitimate marketing tool as long they are above board and available equally to all retailers. Discriminatory practices like these foster instability in the market by harming smaller retailers,” said James Graziano, Acting Director of the Division of Alcoholic Beverage Control. “If left unchecked, the ability of small retailers to remain in business may have been jeopardized and consumers would have less access to retail stores and the specialized product selections that they offer. We will continue to monitor industry practices to ensure an equal playing field in New Jersey’s alcoholic beverage retail industry and hold violators accountable for noncompliance.”

The following Monmouth County retailers were charged with ABC violations:

• Vive Naini, LLC, t/a Vingo Wine and Spirits (Manalapan): $90,000 monetary offer in compromise in lieu of suspension plus corrective action.
• SVGI, Inc., t/a Vingo Wine and Spirits (Red Bank): $90,000 monetary offer in compromise in lieu of suspension plus corrective action.
• SVGS Inc., t/a Vingo Wine and Spirits (Eatontown): $90,000 (including $62,500 unaccounted for cash seized from the store) monetary offer in compromise in lieu of suspension plus corrective action.
• MM Wine & Spirits Inc., t/a Vingo Wine and Spirits (Atlantic Highlands): $90,000 monetary offer in compromise in lieu of suspension plus corrective action.

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