Wine, liquor industry takes sides on NY governor’s plan to allow vino sales in grocery stores

NY again mulls sale of wine in grocery stores

ALBANY, N.Y. — New Yorkers could pick up wine and dinner at their local grocery store and buy mixers, cigars and snacks along with their booze at the neighborhood liquor store, under a new proposal from Gov. David Paterson.

Paterson’s plan to have New York join the 35 states that allow supermarket wine sales included more compromises for liquor stores, many of which have long opposed the idea. The governor estimated that a store franchise fee could bring New York $92 million in the 2010-2011 fiscal year.

Grocery stores, some wineries and grape growers, and other businesses were elated at the new proposal. Paterson attempted to sweeten the deal for opponents by allowing liquor stores to sell directly to restaurants and other retailers, put an ATM on premises and open more than one store.

New York allows only one liquor license per business, so the industry hasn’t been able to create chain stores, which is the way grocery franchises have expanded.

“After last year’s wine-in-grocery-store proposal included nothing to help liquor stores, we said to Albany: ‘Fix the liquor laws, make this work for our industry, too, and give us a chance to compete on a level playing field,’ said Bob Demeo, who has owned a liquor store in Troy for more than 30 years “And you know what? They listened.”

Demeo has long opposed the idea of selling wine in supermarkets, but as it came up year after year, he decided any change in the law should at least include fair trade practice accommodations for small liquor stores.

“Give me the option of doing something to offset my loss of income,” he said.

But many liquor stores, vineyards and other businesses remain unsatisfied with Paterson’s plan, arguing they wouldn’t benefit enough from the perks added to offset potential harm to their business.

“It is a completely phony compromise that provides cover for the big-box stores to crush our business,” said Michael McKeon, spokesman for The Last Store on Main Street, a coalition of small businesses opposing the change.

“You’re also talking about many small independent mom-and-pop convenience and grocery stores that are going to have a new product line to help them in the 570 communities that don’t have a liquor store,” said Patrick Hooker, the state commissioner of agriculture. He estimates New York’s wine industry could grow 20 percent if the proposal survives the Legislature.

A Cornell University report found that introducing wine into grocery stores in New York would benefit out-of-state wineries, government revenues and often the in-state wineries, but wine sales at liquor stores would fall between 17 and 32 percent.

The report also found that New York’s wine industry is relatively small compared with other parts of the world, and local wineries could benefit from the change because they would have a greater outlet for sales.

The sale of wine in supermarkets would close about 1,000 liquor stores across the state and make alcohol more accessible for minors, McKeon said. New York has 2,745 wine-and-liquor stores.

Paterson’s proposal would also allow liquor stores to form cooperatives to drive down costs through joint purchasing for volume discounts. Liquor stores would be able to sell wine-related publications and products, newspapers, gourmet foods and gift baskets, among other things.

Despite these changes, opponents say nothing will convince them that selling wine in grocery stores is a good idea.

“There is no compromise with big-box stores that are looking to crush our businesses,” McKeon said. “We will not go the way of the butcher, the baker and the other small businesses that have disappeared.”