NJ Liquor Stores Face $10.3M In Fines For 'Scheme:' Here's Where

NEW JERSEY – Two wholesalers and 20 retailers face more than $10 million in fines after engaging in a "scheme" that was uncovered during a two-year probe, according to the Office of Attorney General (see list below).

New Jersey’s two largest wine and spirits wholesalers will pay $4 million each because they engaged in discriminatory practices that unfairly favored their largest retail customers, according to an OAG release.

In addition, 20 liquor stores will pay a total of $2.3 million for their part in the unlawful scheme, the release said.

The two wholesalers, Allied Beverage Group of Elizabeth and Fedway Associates of Basking Ridge, agreed to pay record-high penalties and change their business practices to resolve trade violations, the release said.

The scheme was uncovered during a "sweeping" two-year investigation by ABC’s Enforcement and Investigations Bureaus, the release said.

The retailers were charged with violations that included accepting the delivery of alcoholic beverages from the two wholesalers.

They included:

• Joe Canal's in Woodbridge, which will pay a $90,000 fine to the state instead of losing its license. Read more here: Joe Canal's In Woodbridge Must Pay $90,000 Fine To The State
• Vingo Wine & Spirits in Manalapan, which also incurred a fine for $90,000 in connection with the discriminatory trade practice investigation. Read more here: Manalapan Liquor Store Must Pay $90,000 Fine To State
• Vingo Wine and Spirits in Manchester, which also agreed to pay a fine in lieu of a suspension, plus had to take corrective action. Read more here: Manchester Liquor Store Pays $90K Fine In Incentive Scheme
• Vingo Wine & Spirits in Long Branch and Eatontown, which each must pay $90,000 fines. Read more: Long Branch, Eatontown Liquor Stores Must Pay $90,000 Fines
• Vingo Wine & Spirits in Aberdeen, which also faces $90,000 in fines. Read more: Aberdeen Liquor Store Must Pay $90,000 Fine To The State
• Vingo Wine & Spirits in Bayshore Plaza in Atlantic Highlands, which also must pay $90,000. Read more: Atlantic Highlands Liquor Store Must Pay $90,000 Fine To State

The investigation found that the wholesalers – which together account for approximately 70 percent of all wine and 80 percent of all spirits sold at wholesale in the state – unfairly favored 20 of New Jersey's largest wine and spirits retailers, the release said.

They also put smaller retailers at a competitive disadvantage by manipulating the retailer incentive program, granting credit extensions and interest-free loans and engaging in other discriminatory practices, the release said.

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

Here are other retailers, their fines and the corrective action they've agreed to:

• 70 Wine and Spirits, LLC, t/a Vingo Wine and Spirits: $90,000 in lieu of suspension plus corrective action.
• Ashburn Corp., t/a Roger Wilco: $200,000 in lieu of suspension plus corrective action.
• Birchfield Ventures, Inc. t/a Joe Canal’s Discount Liquor Outlet (Lawrenceville): $160,000 in lieu of suspension.
• Bernardsville Wine Company, LLC t/a Gary’s Wine & Marketplace: $90,000 in lieu of suspension plus corrective action.
• BLW World, Inc., t/a Liquor World of Fort Lee: $110,000 n lieu of suspension.
• Closter Wine and Spirits t/a Gary’s Wine & Marketplace: $90,000 in lieu of suspension plus corrective action.
• The Hudson Wine Market t/a Hudson Wine Market: $90,000 in lieu of suspension.
• Jelma, Inc., t/a Gary’s Wine & Marketplace: $90,000 in lieu of suspension plus corrective action.
• Leiham Corp., t/a Bayway World of Liquors: $375,000 in lieu of suspension, plus phased-in retirement of manager and other corrective action.
• Richard McAdam, Inc., t/a Stirling World of Liquor and Stirling Fine Wines: $110,000 in lieu of suspension.
• Somerset Wine Company, LLC, t/a Gary’s Wine & Marketplace: $90,000 n lieu of suspension plus corrective action.