Wegmans Fined for Operating Liquor Stores Without Proper License

Wegmans Food Markets will pay $750,000 in civil penalties for managing five liquor stores without a correct license, according to published reports citing the New York State Liquor Authority. Each of the affiliated stores also received a fine.

The penalties address eight charges: six violations for Wegmans’ availing its license to five affiliated liquor stores, one charge for availing the license of a wholesaler, one charge for aiding and abetting illegal gifts and services, and one charge for illegally trafficking in wine.

The Liquor Authority accepted a conditional no-contest offer of $750,000 from Rochester, N.Y.-based Wegmans to settle the charges, and another $375,000 from the five affiliated liquor stores, which paid $75,000 each.

The charges came in response to a complaint that a Wegmans-affiliated liquor store was doing business as Amherst Street Wines & Liquors in the Buffalo area. An investigation by the authority found that Wegmans wasn’t licensed to sell wine or spirits in the state, and that it was exerting significant control over five stores.

Additionally, the distributing company that provided services to Amherst Street Wines & Liquors, through Wegmans, agreed to pay a $225,000 penalty to settle eight charges levied by the authority.

As part of its settlement with the state, Wegmans named a new corporate compliance officer and implemented a new corporate compliance program to avoid any additional legal complications in the future.

In a statement released to The Buffalo News, however, the grocer took issue with the charge that it exerted any control over the five affiliated liquor stores.

“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,” the company countered, adding, “It’s unfortunate that the [Liquor Authority] chose to credit complaints from competitors of these liquor stores over the actual facts presented to them during the investigation.”

After the state informed the company that only a licensed New York wholesaler can legally perform some of the actions necessary to bring alcohol products to the New York market, the company agreed to correct the alleged violations.

Wegmans is No. 14 on Progressive Grocer’s 2018 Super 50 list of the top grocers in the United States.