Manhattan Beer accused of nickel and diming customers for millions of dollars

A defunct Armonk restaurant claims that Manhattan Beer Distributors tricked thousands of small businesses into paying bogus bottle deposit fees, costing them millions of dollars, one dime at a time.

Cap 111 Enterprises, the operator of Armonk House from 2015 to 2018, is seeking $50 million in damages from Manhattan Beer, in a class action lawsuit filed Feb. 18 in U.S. District Court, White Plains

Manhattan Beer pockets millions of dollars a year by improperly charging an extra 10-cents per case of beer sold to restaurants and convenience stores, the complaint states, and “as the saying goes, that’s a lot of beer money.”

The lawsuit also names as a defendant Simon Bergson, the CEO who founded Manhattan Beer in the 1970s.

The Bronx-based company has grown into the largest, single-market beer wholesaler in the United States, according to the complaint, and has more than 23,000 customers.

It sells more than 46 million cases of beer a year, according to its website, serves New York City and ten surrounding counties, has more than 1.5 million square feet of warehousing, a fleet of more than 350 trucks, and 1,700 employees.

Armonk House was founded by Connie Petrovich, was housed in the Elide Plaza and offered “eclectic American cuisine.”

Sales of alcoholic beverages are the lifeblood of restaurants and convenience stores, the complaint states, “especially those owned and operated by small business owners.”

Armonk House says it received 24-bottle cases of Coors Light, Corona Extra and Heineken K2 from Manhattan Beer. The invoices included a state-mandated bottle deposit fee — a nickel per container that is meant to encourage recycling of aluminum, glass and plastic.

But instead of charging a bottle deposit of $1.20 per case of beer, Armonk House says, Manhattan Beer charged $1.30, “conflating its own private charge with government-mandated bottle deposits.”

Manhattan Beer does not charge an extra 10-cents per case for sophisticated customers such as supermarkets, according to the complaint, because it knows it couldn’t “pull a fast one on these customers.” Instead, it “preys on the small businesses.”

The dimes quickly add up. Armonk House estimated that small businesses pay an extra $2.25 million a year.

The complaint was filed as a class action on behalf of thousands of customers, Armonk House says, because the cost of litigation by an individual customer would be much greater than its monetary loss.

Armonk House accused Manhattan Beer of deceptive business practices, common law fraud, concealment, misrepresentation and unjust enrichment.

An attorney for the beer distributor did not respond to an email asking for the distributor’s side of the story.

Armonk House is represented by Armonk attorneys Steven L. Wittels, J. Burkett McInturff and Ethan D. Roman.