Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, November 13, 1993 TAG: 9311130194
SECTION: VIRGINIA PAGE: C-2 EDITION: STATE
SOURCE: BY BONNIE V. WINSTON STAFF WRITER
DATELINE: RICHMOND LENGTH: Medium
In a high-stakes challenge to the state's wine distribution system, lawyers for Haft told three officers at a state hearing that a Charlottesville wine distributor should have the right to sell Dom Perignon champagne and other wines to Haft even though Haft's discount wine outlets are in a Northern Virginia distributor's territory.
Haft says he can get Dom Perignon from Charlottesville's E.C. Robins International Inc. at a fraction of the price charged by the Northern Virginia distributor, Forman Distributing Co. of Virginia. He said he passes the savings along to consumers.
"They charge $264 more for a case [12 bottles] of Dom Perignon," Haft said outside the the Alcoholic Beverage Control Department.
"I can sell it for $67 [per bottle] and still make a 20 percent profit," he said. "They charge $22 a bottle more," or $89 per bottle. Retailers must mark up the price to make a profit.
At issue is the Virginia Wine Franchise Act, which requires wineries and wine suppliers to grant Forman, Robins and other wholesalers "primary areas of responsibility."
Haft claims that the law allows Robins to go outside its "primary area of responsibility" in Charlottesville and sell to Haft, although his stores are in Forman's area.
Late last month, the ABC board blocked Robins' and Forman's supplier, Schieffelin & Sommerset Co. of New York, from selling wine to Robins, which had agreed to sell it to Haft.
While the restraining order has been lifted, and some of the wine delivered, Forman's lawyers argued Friday that Schieffelin has violated the act by selling to Robins.
"We think the winery . . . knew in its heart that this was wrong," said Walter Marston, Forman's attorney. "They did this out of coercion."
Marston charged Haft with "thuggish behavior" and threatening to sue.
Haft has filed suit in federal court against Forman and wine distributors in Roanoke, Norfolk, Chesapeake and Danville, alleging a price-fixing conspiracy in violation of federal and state antitrust laws. Last month, he took out full-page newspaper ads in several cities alleging "price gouging" by a group of Virginia wine distributors.
The outcome of the ABC hearing won't affect the suit, several lawyers said Friday.
A CBS news team, planning to air a story about the flamboyant Haft early next year, also sat through the daylong hearing.
Haft's wine-law challenge "may have short-term benefits, but it's a long-term disaster," said Forman spokeswoman Marina Ein.
She said Haft wants to gain control of the Virginia market by undercutting smaller retailers.
"When he gets a complete monopoly, where would the incentive be for Mr. Haft to keep the prices down?" Ein asked. "The consumer would be held hostage."
Haft railed against Forman and the "gang of price fixers" he said have Virginia lawmakers and the ABC Commission sewn up.
"This is pervasive corruption . . . and a rip-off to the citizens and Virginia," Haft said.
He said Virginians routinely trek to Washington to buy lower-priced wine and spirits, costing the state millions annually in sales tax.
Memo: NOTE: Shorter version ran in Metro edition.