Will NY Allow Wine in Grocery Stores?

FILED JANUARY 1, 2010

Dear Client:

After a proposal to allow wine sales in grocery stores was dropped last March, New York Gov Paterson and other proponents have presented a “compromise” bill that they hope will pacify package stores. The state’s motivation, of course, is the one-time store franchise fee that Paterson’s administration says would generate about $92 million in the 2010-2011 fiscal year. Recall that after the grocery bill was squashed last year, Paterson implemented a tax increase on beer and wine, and a floor tax on wholesalers and retailers.

The “compromise” would allow liquor stores to sell directly to restaurants, bars and c-stores; install an ATM machine on location; and open more than one liquor store in the state. Right now New York only allows one liquor license per business, hence no liquor chains in the state. Paterson’s proposal would allow liquor stores to form cooperatives to drive down costs through joint purchasing for volume discounts. It would also extend the credit window allowed by wholesalers to retailers from 30 to 60 days, which gives liquor stores more flexibility. In addition, they could sell wine publications and other wine products, newspapers, gourmet foods, gift baskets, mixers and cigarettes, among other things.

Many package stores believe these “benefits” aren’t enough to offset the loss in sales they would experience if grocery stores are allowed to carry wine. Unfortunately for liquor stores, there are a lot of businesses that would benefit from the new law according to a Cornell University report. The study claims that in-state and out-of-state wineries would benefit from grocery sales, along with government revenues.

CUT FUNDING FOR WINE FOUNDATION. Liquor stores aren’t the only ones who are angry about Paterson’s proposal. The New York Wine and Grape Foundation opposes Paterson’s plan to completely eliminate state support for the group. Last year’s budget cut their funding from $2.8 million to just under $1 million.

WSD BRIEFS:

WE REGRET TO REPORT THAT JEAN ARNAULT, father of LVMH chairman Bernard Arnault and member of the company's board of directors, passed away yesterday at the age of 90. There were no further developments available at press time.

VA GOV REMOVES ABC APPOINTEE. Virginia’s new Gov Bob McDonnell released former Del. Franklin Hall from the state’s Alcoholic Beverage Control Commission as his first step toward shaking up Virginia’s alcohol system. Commissioners Susan Swecker and William Pantele are staying for now. A spokesperson for the governor said he “is committed to privatization of ABC, and that priority is being relayed to all potential candidates.” He is reportedly considering Republican appointee Sandra Canada. Recall McDonnell wants to privatize spirits sales and put the money towards transportation, although he is still trying to drum up support from lawmakers.

NEW APPOINTMENTS AT GLAZER’S. Glazer’s chairman and chief Bennett Glazer announced that Shawn Thurman is appointed evp, sales and marketing. He will oversee Glazer’s top line performance in its 11 states. Patrick Moore is promoted to evp, brand development and will oversee corporate initiatives in malt beverages, fine wine, multi-cultural marketing, training and new brand development. Patrick is currently Glazer’s president of Texas. And finally, Phil Meacham is appointed senior vp, finance, operations and administration. All appointments are effectively immediately.


Until Monday, Megan

“By the time a man realizes that maybe his father was right, he usually has a son who thinks he's wrong.”
Charles Wadsworth

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