Bloomberg News

Grey Goose Out of Reach as N.J. Liquor Warehouse Flooded

November 08, 2012

New Jerseyans with homes swamped and blacked out by Hurricane Sandy face another hardship: a cutoff of Cristal champagne, Grey Goose vodka and an herbal brew called Kamasutra, “the natural spirit of seduction.”

The exclusive New Jersey distributor of those and other liquors, Fedway Associates Inc., is still cleaning up after a 10-foot surge of Hackensack River floodwater inundated its Kearny warehouse last week, according to its Facebook page. Losses will be “in the tens of millions,” the posting said.

The company is getting 100 delivery trucks to replace its fleet, has rented a 190,000-square-foot (17,700-square-meter) warehouse and expects to resume operations Nov. 19, according to messages on its Facebook page. About 250 employees, joined by customer volunteers, are working three cleaning shifts a day, while Fedway’s offices are moving to Somerville.

“We are making rapid and significant progress,” Neil Barnett, Fedway’s president, said yesterday on Facebook.

New Jersey law prohibits alcohol retailers from buying supplies from out-of-state distributors. At a news conference in Somerset today, Governor Chris Christie said he would consider lifting that restriction as he’s done with gasoline rules to relieve shortages following the storm.

“If in fact that company came and asked me to consider that, I would consider it,” he said. “But to the best of my knowledge they have not come and asked for any waiver or relaxation of that regulation.”

Cleaning Up

Jeffrey Warsh, executive director and general counsel to the New Jersey Wine and Spirits Wholesalers Association, a Trenton-based trade group, said he hadn’t heard of any movement to seek an out-of-state buying waiver.

Diane Weiss, executive director of the Trenton-based New Jersey Licensed Beverage Association, a lobbyist for bars, restaurants and other on-premises liquor retailers, didn’t immediately respond to a phone call. Zach Hosseini, a spokesman for the state division of Alcoholic Beverage Control, didn’t immediately respond to a voice mail.

Barnett, the Fedway president, has been working alongside employees during the cleanup and prefers to issue updates via Facebook, Warsh said. The company will be fully operating “in just another couple of weeks” at the most, he said.

Brand Loyalty

New Jersey liquor suppliers offer 46,000 brands, Warsh said in a telephone interview.

“The impact of Hurricane Sandy is on a handful of products,” Warsh said.

Fedway’s supply issue means no source for Grey Goose, the imported French vodka that Sasha Vaynerchuk, 59, owner of Wine Library in Springfield, sells for $35 for 750 milliliters. Fedway has the exclusive rights to sell the liquor in New Jersey, Vaynerchuk said.

“If somebody drinks Grey Goose, you can’t replace with Smirnoff or Ketel One,” Vaynerchuk said by mobile phone as he traveled from his store, which he described as among the biggest wine shops in the U.S., to check on the power situation at his home in Bethlehem Township.

“On the wine end of it, it’s not so difficult, because people will try others,” Vaynerchuk said. “The customer has much more loyalty to spirits.”

Bottle King

Kenneth Friedman, founder and owner of Livingston-based Bottle King, with 15 stores and 300 employees in New Jersey, called the disruption “a headache for everybody.” He said he sells the vodka, which ranks among his 50 top movers, at cost, $29.09 for 750 milliliters.

“We’ll be out by the weekend,” Friedman said today by telephone. “Grey Goose was going to have special promotions in November, so we were winding down our inventory and going to buy at the lesser price, $27.09, the first week of November. We don’t pocket that discount. We pass it on to customers.”

Kamasutra, a ginseng-based liquor, is distributed by Fedway in New Jersey, according to marketers at Herborium Group Inc. (HBRM:US) in Fort Lee. It said in September that Fedway was the state’s largest liquor wholesaler, with 7,000 points of sale in stores, restaurants and bars.

At the Wine Seller in Ridgewood, owner Don Carter, 56, said he was out of regular Grey Goose and had “a few cases” of Svedka, another Fedway exclusive.

“I’m dancing as fast as I can, and the shelves are getting pretty bare” he said by telephone.

To contact the reporter on this story: Elise Young in Trenton at eyoung30@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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