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Wine vending kiosks pulled from stores

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Staff and Wire Reports
Wednesday, Sept. 21, 2011

The Pennsylvania Liquor Control Board's one-year experiment with wine vending machines at grocery stores is over, at least for now, because of a financial dispute with the contractor, agency officials said Tuesday.

Monday was the last day to resolve the dispute with contractor Simple Brands LLC and keep the machines operating, and liquor board CEO Joe Conti said he could not foresee the program being revived.

Wine vending machines in Western Pennsylvania Giant Eagle and Shop 'n Save supermarkets were shut down yesterday, store spokesmen said.

The liquor board maintains that Simple Brands owes the state about $1 million, but Simple Brands has disputed that assessment, saying the liquor board had incurred unnecessary expenses and "improperly" billed the company. Meanwhile, Simple Brands is seeking $81 million from the agency for breach of contract, Conti said.

"I think it was a great attempt to try to do something for the convenience of our customers," Conti said. "It didn't end up successful, but we learned a lot, we will be better for it, and listen, we had thousands of buyers who predominantly were happy with the convenience when they bought a bottle of wine through these kiosks."

Conti said he believes the liquor board will prevail in its legal fight and, if it does, it will be able to show that the agency reaped about $250,000 in profits for the state from the program.

Alan Fellheimer, a lawyer for Simple Brands, said the liquor board has been unable to show any evidence to support its claims, and that the liquor board insisted on the claims process instead of Simple Brands' efforts to negotiate an agreement that would allow the program to continue.

The liquor board is removing wine bottles from the machines, and Simple Brands has 30 days to pick them up, agency officials said.

The machines started going into grocery stores around the state last summer, and the liquor board says 21 had continued to operate, largely in Western Pennsylvania.

Jeff Sorbara, whose family owns six Shop 'n Save supermarkets in the Pittsburgh area, said someone came to the Bethel Park store yesterday afternoon to turn off the wine machine there. He expected the same to occur by last night at the Heidelberg store, the other location with a kiosk.

"They didn't really perform too well," he said of the machines. "When they were first installed there was a lot of buildup, so they were busy for the first few weeks."

But software and mechanical problems led to the kiosks being shut down statewide for as long as six weeks, starting in mid-December. After they were repaired, the machines never were as busy again, Sorbara said.

"We didn't gain any customers. No one was just coming in to use" the kiosks, Sobara said, estimating one or two customers a day at each store used the machines.

The wine machines were at about a dozen Giant Eagle stores. Those were shutdown yesterday, said Dick Roberts, a spokesman for O'Hara-based Giant Eagle Inc.

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