Tobiassen is not alone in his presumption that the gift cards were issued intentionally. That is the competitive harm," he concludes. "They were aiming to increase sales at their store alone in Westbury by New Yorkers who might otherwise make their purchases at a different liquor store. "This linkage between the Total Wine Stores in Florida and their single store in Westbury compromised the 'independence and operations' of the Westbury store," notes Robert Tobiassen, an attorney who previously worked as in-house counsel for the Alcohol and Tobacco Tax and Trade Bureau, and now is the Washington DC-based president of the National Association of Beverage Importers. The operational synergies between the Florida and New York Total locations were clearly made apparent by the sale of these gift cards, encouraging some analysts and attorneys to take an even deeper dive into how Total does business across states. Buying decisions can be made at corporate level, category management is standard in many locations and most wholesalers standardize costs to make multi-state purchases price consistent, according to Hinman.
While chain wine stores, in states legislated like New York, are supposed to operate independently they often don't. The SLA remains committed to prosecuting all violations of the Alcoholic Beverage Control law to ensure liquor stores remain independent and are not gaining an unfair advantage over businesses that are following the law.” Ironically the fine Total paid – for four infractions – was relatively minor. "This investigation led to four charges sustained against the liquor store for gambling, operating a second business and availing, resulting in a $22,500 civil penalty. William Crowley, the director of public affairs for the NYSLA, has the following to say about if the gift cards were simply the icing on the cake of a larger violation.
Total’s spokesperson declined to comment for this story. "The underlying offense is that they are operating as a multi-state chain." "It is a symbol of a larger issue," shares John Hinman, a beverage alcohol specialist and a San Francisco-based partner in the law firm of Hinman & Carmichael LLP. However, the circulation of a handful gift cards is just the tip of the iceberg in terms of potential legal issues with how Total has been running its New York outpost. The big-box wine merchant is owned by the Trone family, whose members include US Representative David Trone, a democrat from Maryland. Total currently only has one location in New York – as mandated by local law – although it has made numerous unsuccessful attempts to open other locations in the state over the past years. By offering gift cards in one state that were redeemable in another Total broke that rule. So when chains break ground in the state they are aware that their New York bricks and mortar footprint must operate as an independent institution. New York State has a firm one store per family, or company, law on the books that is intended to foster a strong independent wine market.
Related stories:Ĭalifornia ABC Launches Amazon Investigation The Albany-based authority has fined the 214-location Total Wine & More for issuing gift cards in Florida that were usable in New York State. The New York State Liquor Authority is on the march again, taking aim at one of the largest liquor chains in the US – Total Wine & More. © Shutterstock | Total fell foul of New York's strict liquor laws by issuing gift vouchers.
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