Boos for Paterson plan to sell wine in supermarkets

Fears that liquor stores would be wiped out by grocers and big box competitors

By Yaffi Spodek

Issue of Feb. 20, 2009 / 26 Shevat 5769

Governor David Paterson's budget proposal to allow grocery stores to sell wine has local sellers up in arms. The plan could generate over $100 million in franchise fees for the state but has met with fierce opposition from many who fear that supermarkets' whole-sale appeal and buying power would destroy small, privately owned liquor stores, including many that stock kosher varieties.

"It will impact a lot of businesses and thousands of people will be

affected," predicted Moshe Fink, the owner of Chateau De Vin on

Central Avenue in Cedarhurst. "It's a totally bad idea because it's a

short term fix which would have long-term repercussions. You are

giving up thousands of jobs for a one-time fee in the state's

pocket... It would be pretty much a wash."

Alex Valp, who owns Plaza Liquors in Hewlett, agreed.

"Every liquor store is trying to fight the proposal," he said. "We

would definitely lose a big chunk of business...It would be very bad."

Allowing the state's 19,000 grocery stores to sell wine would force

more than 1,000 of the state's wine sellers and liquor stores ––

estimated at over 2,700 –– to go out of business, leading to a loss of

more than 4,000 jobs, according to a Feb. 8 report in The New York

Times.

"The government, without realizing it, [would] unintentionally

shut down a 75-year-old industry in one fell swoop," said James Cari,

the owner of Peninsula Wines and Liquor on Franklin Place in Woodmere.

"Liquor stores work on very small mark-ups and the only mark-ups that

keep us alive are on wine."

He explained that if the proposal passed, it would be much more

convenient for customers to buy wine from the grocery stores, which

would sell popular national brands for lower prices. According to New

York State law, a person can only own one liquor store, giving an

unfair advantage to grocers able to buy in bulk.

"Just by the nature of the business, groceries will stock the brands

that fly off the shelves, and they have a much better buying power,"

Cari noted. "The groceries have an advantage in buying because of

their sheer volume of business; they sell thousands of products. Where

we may see 400 customers a week, they see 10 times more at the very

minimum."

However, the Business Council of New York Inc. anticipates that the

proposal will be "good for the economy and good for consumers,"

according to The Buzz Business News Web site. Paterson also proposes

raising the tax on wine, hoping to generate a new revenue stream, and

since 35 states already allow wine sales in grocery stores, New York

State is "out of the mainstream," says the Business Council.

Not surprisingly, wine sellers disagree.

"I've been in other states where they have wine in groceries and

there are hardly any liquor stores," Fink said, explaining that only

the supermarkets favor the proposal. "This proposal has come up in the

past and usually gets killed because so many people are against it,

but this time it's different because it's part of the budget."

An additional concern that the proposal raises is the availability of

wine to underage drinkers. Fink, who has owned Chateau De Vin for 18

years, has witnessed it firsthand.

"I've had many times where underage drinkers have tried to purchase

from me," he recounted. "In a small store, it can be controlled, but

in bigger stores it's much harder to control, so many social

organizations are also gathering together to fight this."

Cari harbors similar concerns.

"The majority of violations for sales of alcohol to minors occurs in

states with places that are allowed to sell beer, such as

supermarkets," he pointed out. "These are the places where Gov.

Paterson would like to allow wine to be sold. There are three big

states like New York –– California, Texas and Florida –– where there

are three times the amount of DWIs and alcohol-related deaths than in

New York... What the governor was thinking, in terms of protecting our

youth, doesn't make any sense."

But owners of liquor stores –– locally and across the state –– are

not prepared to go down without a fight. A coalition called the Last

Store on Main Street represents 2,742 wine sellers and liquor stores

united in resistance to the proposal. The coalition's web site

encourages people to send a letter to their local legislators voicing

their opposition. Several liquor store owners, including Cari, have

set up laptops near their checkouts, and are encouraging customers to

send those messages via e-mail as they shop.

Other sellers, like Valp, have mounted petitions in their stores and

are urging concerned patrons to sign as a show of support.

Cari has recruited several Long Island wineries to the cause, he said.

"This would also hurt them, and I've gotten many of them to support

us and join the coalition," he said. "They would be losing outlets [at

which] to sell their wines, and supermarkets wouldn't be interested in

promoting those wines when they have tons of other products to sell."

Though there is a market for specialized wines, such as kosher

varieties –– one that can perhaps be sustained even if the proposal

passes –– it is not enough for most wine sellers to stay in business;

the majority of their profits come from nationally advertised brands

that would be available in the groceries.

On Feb. 25, the Last Store on Main Street coalition will lead a

lobbying mission to Albany to protest the governor's proposal. Fink

plans to attend and is hopeful that the concerted effort will be

sufficient to change the course of events.

"We have plenty of legislators who are also against it, together with

businesses and associations and social organizations," he said. "We

are confident that we'll be able to stop it."

A call to Gov. Paterson's office was not returned.