A rival to Costco Warehouse's liquor operation challenging the legality of the big-box seller's sales permit is not entitled to get the company's purchasing records from local alcohol distributors, Pulaski County Circuit Judge Alice Gray ruled Monday.
United Beverage Retailers of Arkansas, a statewide consortium of liquor store owners, and its president Johnny Akins, who co-owns Legacy Wine and Spirits across the street from Costco, have sued to overturn Costco's liquor license.
The Arkansas Beverage Control Board unanimously approved Costco to sell spirits like vodka, whiskey and rum in June over the objections of the retailers group. Costco opened July 21 on Chenal Parkway.
United Beverage attorney Jimmy Simpson told the judge that Akins has reason to believe Costco misled the board about how the company is operating its liquor store, and that records from four local distributors would show that deception.
The information sought would include the names of Costco sales representatives, how much beer, wine and spirits Costco had purchased since its opening, how product is allocated for Costco and the records used to make the allocation decision. Simpson wanted to obtain those records through subpoenas sent to the Central Distributors, Golden Eagle Distributors and Moon Distributors of Little Rock, along with Southern Glazer's Wine and Spirits of Arkansas of North Little Rock.
Costco lawyers opposed the request, stating the company considers that information to be proprietary and "competitively sensitive." Costco attorney Mike Shannon said there has been no wrongdoing, saying the United Beverage plaintiffs' complaints about the store's operation are based on their misinterpretation of the case law under which governs store operations.
Gray said the plaintiffs have no grounds to acquire the records because their case is about whether state regulators properly applied the law to license Costco, not about what happened once Costco received its permit.
If they have a new complaint about Costco, they must report it to the regulators for an investigation, she said.