Liquor stores oppose proposal to license wine sales in grocery stores

Goshen — As part of a long list of proposals for closing a $15.4 billion deficit, Gov. David Paterson has proposed issuing licenses to permit wine sales in grocery and convenience stores throughout the state. The idea has been debated before without success. But with the state’s huge deficit and the governor’s estimate that the state can raise $105 million next year by charging grocery stores various fees for the right to sell wine, liquor store owners are worried that the change in the law could occur this year. The New York State Liquor Authority’s official position is that the proposal would not hurt liquor stores because they would still be alone in selling hard liquor. But Wanda Gibson, co-owner of Warwick’s B & R Wine & Liquor at ShopRite Plaza, strongly disagrees. “This proposal could put us out of business,” she said “Wine pays the rent. Liquor has a very low mark-up and we only carry it as an accommodation for our customers.” State law currently limits beer sales to the state’s 19,000 grocery stores and wine and liquor sales to the 2,400 liquor stores. Wineries can also sell wine in their tasting rooms. Other liquor storeowners argue that the governor’s plan would not only ruin their businesses, but also eliminate jobs in a recession. “You will see many small liquor stores close and the cost of unemployment will offset any gains the state hopes to achieve,” said Jamie Blanchette, owner of Goshen Plaza Liquors in Goshen. “How can I afford to pay my workers if they take away my bread and butter?” Local wineries, however, would stand to benefit from adding 19,000 more wine outlets to their list of wholesale buyers. But they are also careful not to take sides against their longtime liquor store customers. “More outlets and more people introduced to our products could be good for wine sales,” said Jason Grizzanti, co-owner of Warwick Valley Winery and Distillery. “And across the board it would probably be good for the wine industry. However it would not be good for small mom and pop liquor stores. But if it does pass, those shops that currently feature high end wines and offer personal service will continue to do well.” Regs date back to the end of Prohibition The Food Industry Alliance of New York State, Inc. (FIA) supports the governor’s proposal and according to its Web site, FIA currently has a wine task force directing the proactive issue of expanding wine sales to grocery stores, convenience stores and drug stores. ShopRite stores and other supermarkets in New York are represented by FIA and support the measure. But that doesn’t mean that every grocery store and supermarket is ready to apply for a wine license. “Our stores are independently owned and operated,” explained ShopRite spokesperson Karen Meleta. “Just because our company, as the franchiser, does not object to this proposal, does not mean that all independent ShopRite stores in New York will see this as an opportunity. Some will and others will not.” Wine and liquor storeowners argue that supermarkets and grocery stores will expose more alcohol products to minors. As part of a long and stringent list of regulations that have been around since the end of Prohibition, a minor may not even enter a liquor store without a parent or adult guardian. “I have to be very careful about who I sell to,” said Alan Glass, owner of Star Discount Wines and Liquors in Monroe. “If I loose my license, I’m out of business. But the same would not be true for a supermarket. Wine would only be a small portion of its sales.” Loss of businesses, jobs and sales taxes During a recent television interview about this issue, Bill Iurato, owner of Peck’s Wines and Spirits in Warwick provided News 12 Hudson Valley with a good sound bite when he questioned why he couldn’t sell groceries if grocery markets were allowed to sell wines. “I’m prohibited from even selling Margarita salt,” he later explained. “I’m not really interested in selling groceries but I wouldn’t mind carrying some items like cheese, non-alcohol mixers, lemons and limes.” Liquor stores in New York cannot sell products, including prepared cocktail mixers, that do not contain any alcohol. Iurato invites his customers to sign a petition opposing the license proposal. “This will put 1,000 mom and pop stores out of business,” he said. “They cannot compete with a giant supermarket like Wal-Mart with enormous buying power and a three or four percent markup. And the state would lose in sales tax.” Iurato also explained that only one license can be issued to an owner and that current license laws involving distribution and ownership would have to be changed. Liquor stores may be able to derail the proposal if the governor and legislature fail to suggest compromises. It could also disappear in committee. Is the answer in Albany? “The proposal in Gov. Paterson’s executive budget to allow wine sales in supermarket chains would severely curtail small business owners’ ability to remain in Orange County” said Assemblywoman Annie Rabbitt, R-C-Greenwood Lake. “Supermarkets have much greater purchasing power than mom-and-pop stores, are able to legally offer both alcohol and food sales, and are open later. With around 50 percent of liquor store revenue coming from their wine inventory, the governor’s proposed change would quickly drive these small business people out of the state. As a small business owner myself, I will stand against this dangerous proposal during the upcoming budget talks.” Assemblywoman Nancy Calhoun, R-C-Blooming Grove, asked constituents and legislators throughout New York to join her efforts to stop Paterson’s plan. “The governor’s plan would put thousands of family-owned small business wine and liquor stores at a competitive disadvantage with larger supermarkets, convenience stores and drug stores, causing many to go out of business,” she said. Calhoun also believes that the plan would not help local wineries since chain stores would be more interested in importing cheaper wines from other places in an effort to increase their bottom line. “Governor Paterson’s proposal to sell wine in grocery stores is highly contentious,” said state Sen. William J. Larkin Jr., R-C-Cornwall-on-Hudson. “And the Senate Republicans are currently evaluating the feasibility of this measure. Before we take our position, we want to be completely sure that we have sufficiently examined the impact this measure would have on all of the parties involved.” Have your say State Sen. Thomas Morahan, R-C-New City, who represents parts of Rockland and Orange Counties, will host a public hearing on all of the governor’s budget proposals, including the one that would allow wine sales in supermarkets, on Thursday, Feb. 12, from 2 to 4 p.m. at the Suffern Public Library. To contact the senator’s office in New City, call 425-1818 or e-mail morahan@senate.state.ny.us.