Wine plans for NY grocery stores

The governor of New York state, David Paterson, has called for laws to be changed to allow the sale of wine in supermarkets, grocery and convenience stores.

The original move was quashed when it was suggested in March last year and when it was first raised as far back as 1984.

The proposal would bring New York in line with 35 other states, including California and Washington, which allow the sale of wine in supermarkets.

The change in legislation is part of Paterson’s plans to alleviate the $7.4 million budget deficit in 2010-2011. The state administration raised the tax on beer and wine and implemented a floor tax on wholesalers and retailers after the rejection of the proposal last year.

Opponents say the new laws would have a significant negative impact on the state’s 2,745 liquor stores, predicting that up to 1,000 would be forced to close.

Currently the law allows wine to be sold only in licensed liquor shops and only one licence per business. As a result there are no chains in the state.

By way of a concession the administration has drafted a ‘compromise’ bill which would allow liquor stores to sell directly to bars and restaurants and form co-operatives to increase their volume-purchasing power and drive down costs.

They would also be allowed to open more than one shop in the state as well as sell other products such as wine publications, newspapers, gourmet food, gift baskets, mixers and cigarettes.

The credit window allowed by wholesalers to retailers would also be extended from 30 to 60 days, allowing for greater flexibility on the part of the shop owners.

However, the concern among shop owners remains that these concessions would not be enough to offset losses if grocery stores were allowed to sell wine.

Michael Mckeon, a spokesman for a coalition opposing the legislation said: “It is a completely phoney compromise that provides cover for the big-box stores to crush our business.”

Nevertheless, a Cornell University study said that wine in supermarkets could prove beneficial to New York’s wine industry as well as government revenues.

On the other hand, the same report noted that while the change in policy could increase overall wine sales, sales in the state’s liquor shops could drop by 17% to 32% overall.

Meanwhile, the New York Wine and Grape Foundation is angry with Paterson’s plans to cut all government funding for the group. Last year’s budget saw their funds cut from $2.8m to just under $1m.

Rupert Millar 01.02.10