Restaurateurs sour on wine proposal They say the LCB's plan to open wine-only shops in gourmet markets will hurt their businesses.

Posted: July 25, 2009

It could end up being a case of sour grapes for some Philadelphia restaurateurs.

A small but vocal group, mostly of Center City restaurant owners, is organizing against a Liquor Control Board plan to open wine boutiques in gourmet groceries.

Among other concerns, those in the group worry that the proposal will siphon off customers and give the high-end food shops - selected by the LCB - an unfair advantage.

"I feel like the state is trying to sell houses when they make tractor-trailers. It's not their job to play with the culinary landscape of an area," said Jason Evenchik, owner of Vintage Wine Bar & Bistro, 129 S. 13th St.

Evenchik has joined with the owners of more than 50 establishments, most in Philadelphia, who have formed Restaurants for Fair Competition. They are asking the state Senate to derail the plan. The House has approved the legislation.

The group argues that the food stores would not have to pay for expensive liquor licenses and would collect rent from the LCB. The boutiques, members say, would sell up to 150 varieties and labels of wine - seen as complementing the markets' meats, cheeses, and desserts - at the state's lower retail prices.

It's a foodie's dream, but it leaves a bad taste in the mouths of the restaurateurs, who profit from selling wine at a markup.

"We're facing competition from a state-run monopoly," said Jon Myerow, owner of Tria at Rittenhouse Square and Washington Square West.

Over the next five years, the LCB wants to lease between 500 and 1,000 square feet in gourmet groceries - mainly in Philadelphia and Pittsburgh, where the potential for profit is greater, said Joe Conti, a former state senator from Bucks County who is the LCB's chief executive officer.

The only definite location is a 600-square-foot space in Jose Garces' yet-to-open market in the Western Union building at 1111 Locust St., which is expected to have a 26-seat dining area.

Amid the recession, Myerow and others worry that people will pass up restaurants and head for the cheaper beverages in the food stores.

They also say the LCB does not have an open application process for gourmet markets that want to be considered for the program. The LCB is "hand-selecting" a privileged few, creating an unfair playing field, he said.

Nick Hays, spokesman for the LCB, denied that.

"We are seeking people to propose these to us," he said. "We're not going out and saying, 'I want you, I want you, I want you.' That's baloney."

Market saturation is another concern.

Garth Weldon's restaurant, the Prime Rib, at 1701 Locust St., is among a number of eateries within six blocks of the proposed wine boutique in Garces' market.

"It's a tough business world out there right now, and certainly introducing something like this would put in jeopardy the ones nearby," Weldon said. "I say, do it, but don't allow people to consume the wine on the premises."

From six to 12 additional boutiques could open over the next five years, Conti said. They would not be in BYOB restaurants, he said, adding that to him, a food market with 26 seats is no competition for a restaurant.

"My culture is, the more the merrier," Conti said. "The more restaurants on a street, the more we all thrive."

Some argue that the LCB would be cannibalizing itself. One of the state's flagship wine shops, the Premium Collection Wine and Spirits Store at 1218 Chestnut St., is three blocks from the proposed boutique in Garces' market.

The LCB tried wine-only stores in the 1980s, but they failed.

"I don't think it's going to make the state money," Myerow said. "It's putting taxpayer money at risk."

On the flip side of that argument is that sales at State Stores reached a record $1.84 billion for the fiscal year that ended June 30, generating $494.5 million for the commonwealth.

"Wine is on the rise," LCB chairman Patrick J. Stapleton 3d said. "There are people who find it to be an entertainment, hobby, sport, whatever you like."

Contact staff writer Lauren Boyer at 717-236-1819.

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