Liquor wholesalers ordered to pay $1.6 million

SYRACUSE - Southern Wine and Spirits of Upstate New York, Inc., located at 120 Madison St., is one of eight liquor wholesalers that have agreed to stop illegal marketing practices after an investigation by New York State Attorney General Eliot Spitzer's office and the New York State Liquor Authority.

The

investigation discovered that the liquor wholesalers offered discounts and free merchandise to prefer-red bars, restaurants, retailers, and nightclubs. From 2002 to 2005, these establishments received more than $50 million in illegal swag including cash, vacations, cases of wine and spirits, iPods, golf clubs, and AMEX gift cards, according to Spitzer's office.

The wholesalers include: Charmer Industries, Inc. in Astoria; Eber Bros. Wine and Liquor Corp. in Rochester; Eber-NDC in Rochester; LLC Peerless Importers, Inc. in Brooklyn; Colony Liquor and Wine Distributors in Kingston; Southern Wine & Spirits of New York Inc. in Syossett; Southern Wine and Spirits of Upstate New York in Syracuse; and Service Universal Distributors, Inc. in Albany.

Under the agreement, which was filed August 30, 2006, the wholesalers agreed to adopt reforms and pay $1.6 million in fines and costs. Wholesalers must file an affidavit with the attorney general's office within 60 days to show compliance with the agreement.

The agreement forces wholesalers to stop all payoffs and post its wholesale price schedule to end the practice of blind pricing, which gives favored retailers significant discounts while competitors pay full price.

" ... as a result of this agreement, these illegal schemes have been halted and a level playing field restored throughout the industry. Ultimately, consumers may see lower costs as a result of fairer competition," Spitzer says.

Phone calls and e-mails to Southern Wine and Spirits of Upstate New York were not returned by press time.