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Legal Filing Claims BevMo's "Five Cents" Sale Deceives

November 10, 2009

A class-action compliant filed in San Francisco last month alleges Beverages & More Inc.’s widely advertised “Five Cents” sale is deceptive and calls it a “fraudulent business practice.” 

The promotion, which has run for a number of years, wraps up this week. According to the complaint, BevMo represents consumers paying the “regular price” for a first bottle get a second identical bottle for just “five cents.” The complaint claims, though, that BevMo, which in fifteen years has grown to operate 100 stores, marks up the regular price of the first bottle so consumers are not actually paying BevMo's regular price. For some bottles of wine, BevMo marked up the price so much that it actually cost more to buy two bottles during the sale, the filing claims

The complaint cites the example of a Vago Rojo Tempramillo-Malbec advertised in the sale at $19.99 a bottle so consumers would pay a total of $20.04 for two bottles for an apparent savings of $19.94. It claims however, that BevMo's price for the same wine then dropped from $19.99 to $6.99, meaning consumers could buy two bottles for $13.98.

“BevMo publicly disseminated advertising with the intent not to sell the wine on the price terms as stated in the advertisement – i.e. not to sell the “regular price” bottles at a regular price,” the filing alleges.

“This practice of using a fictitious, marked up, or otherwise misleading regular price" is a deceptive, unfair and illegal practice,” alleges the filing. Plaintiff Peter Gray Jr. of San Francisco seeks restitution, damages, injunctive relief, and attorneys' fees, claiming to have been “actually injured as a result of BevMo’s conduct in an amount not less than the difference between what he paid for the two “regular” price bottles of wine (a total of $17.98 plus tax) and what he should have paid if BevMo had sole the bottles at their actual regular prices (a total of $12.98 plus tax).”

The complaint says BevMo’s legal counsel sent a letter to Mr. Gray prior to the filing, rejecting a reimbursement request. The letter purportedly acknowledged that BevMo sold wine at prices identified by Gray but said the higher prices cited by Gray were “regular” prices, while lower prices at issue were “ClubBev” prices. The complaint claims the distinction is “legally irrelevant,” and was filed by Kemnitzer, Anderson, Barron, Ogilvie & Brewer in Superior Court in San Francisco on October 22.

“The allegations of the purported class action claim are without merit and obviously we plan to defend against it rigorously,” David Richards, executive vice president of marketing and ecommerce for BevMo said.

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