LCB pulls the plug on wine vending machines

September 21, 2011|By Angela Couloumbis, Inquirer Harrisburg Bureau

HARRISBURG - Pennsylvania's wine kiosk era quietly went off-line Tuesday morning.

That is when officials from the state Liquor Control Board made the last call to pull the plug on the remaining 21 wine vending machines in supermarkets scattered across the state.

The reason: a dispute over money with Simple Brands L.L.C., the Conshohocken company that owns the machines. The LCB contends that Simple Brands owes nearly $1 million for expenses incurred setting up the kiosk program. Simple Brands officials dispute that, saying the LCB charged the company for frivolous and inappropriate expenses.

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The result: the agency's barely one-year-old experiment with the 10-foot machines is history, closing a controversial - and, at times, embarrassing - chapter for the LCB. The state agency was often criticized, and sometimes mocked, for taking a chance on the kiosks, which required customers, among other things, to blow into Breathalyzers.

Joe Conti, the liquor board's chief executive officer, said he was disappointed, but insisted that the experiment was an "innovative attempt to marry the convenience of buying wine with buying food in a supermarket."

Was it a failure?

"It certainly wasn't a failure," he said. "It didn't end up successful, but we learned a lot and we will end up better for it."

Pennsylvania is the first state to experiment with wine kiosks.

Alan Fellheimer, the attorney representing Simple Brands, contends that the LCB did not live up to its side of the contract, which included ensuring that kiosks were placed in 100 supermarkets. At the program's zenith, there were just over 30 machines.

Simple Brands is now seeking $81 million in damages.

"They didn't do their job," Fellheimer said of the LCB. "They didn't do what they said they would do."

Fellheimer called the LCB's claim that Simple Brands owes $1 million "malarkey."

In paperwork it filed with the agency last month, the company alleged that the state agency had incurred unnecessary expenses and improperly billed them to Simple Brands. One example, according to the company: The board charged $184,888 for kiosk-related hardware and software, including 97 routers, plus maintenance during a period when only three wine kiosks were up and running.

"They just want money," Fellheimer said.

Conti said the company had 30 days to haul away the machines.

That may just be the easy part. The ensuing legal wrangling could last years.

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