The Whine About Wine in New York Grocery Stores

budget The Whine About Wine in New York Grocery Stores In a political atmosphere defined by unbridgeable budget deficits, rising tax rates, and venomously argued cuts to public services, a widely popular initiative that promises $162 million of new revenue to New York State should coast through the legislative process with minimal dissent.  

Shouldn’t it? 

Last March, Governor Paterson watched his plan to legalize the sale of wine in grocery stores drown in a dizzying maelstrom of debate and protest from small liquor store owners throughout the state. They unified through the Last Store on Main Street campaign: a grassroots merger of the upstate New York State Liquor Store Association and their downstate counterpart, the Metropolitan Package Store Association. 

Now Governor Paterson has reintroduced the wine-in-grocery-store initiative; and this time, with a freshly unveiled $8.2 billion budget deficit, the stakes are higher. With hopes of minimizing the usual fury of lobbyist backlash, he’s laced his new initiative with compensation for liquor-store owners, like changing the highly restrictive liquor laws to allow them to sell snacks, cheeses, and gift baskets, and to let them operate ATMs. 

Michael Correra, executive director of the Metropolitan Package Store Association, the downstate liquor store lobby, considers the compensation to be paltry at best. “We feel 1,000 stores will be out of business,” he said. “Our most profitable products are being taken away from us. Potato chips and gift baskets aren’t going to begin to fill that void.” 

According to the lobby’s Web site, wine accounts for as much as 80 percent of liquor store sales in New York State, so it’s not easy to convince a liquor-store owner that you should be able to buy a cabernet in the same place you buy your Soap Opera Digest, and Mr. Paterson isn’t likely to sway them to pipe down. If anything, their message is steeped in an intense sense of urgency this time around.

“This will kill small business,” said Stefan Kalogridis, president of the upstate New York Liquor Store Association. “I have senior citizens working for me to supplement their Social Security, I have college kids working for me to pay off loans. These people will lose their jobs.” 

With these kinds of arguments pervading their frequent mailers and press releases, it’s no surprise that the Main Street lobby’s grassroots campaign has been so effective. They raised almost $1 million in just over a month of fund-raising last spring, which was enough to efficiently communicate their cause to legislators and state—officials, who, according to Mr. Kalogridis, didn’t want to support a measure that would threaten employment and shut down businesses in their districts.

The lobby might have been a hit with politicians, but it also energized an opposition of New Yorkers who, besides craving an increased availability of wine, are concerned about the future of state funding for their schools, municipal services, and public transportation. The state is currently hemorrhaging financially, devouring its non-renewable resources and fumbling for new sources of revenue to make up for dramatic financial shortfalls, and we’re in no position to scoff at any reform that promises $162 million of new revenue, they’d argue.

Proponents of the measure accuse the lobby of politicized and manipulative exaggeration.

“Other states sell wine in grocery stores and they manage it,” says Elizabeth Lynam, deputy research director at the non-partisan Citizens’ Budget Commission. “This will be an opportunity for smaller liquor stores to develop their local market place, where they have a specialty; maybe by offering tastings, or selling local or organic wine that’s harder to stock in the larger chains. It’s an opportunity for them to create their own marketplace.”

Indeed, while their business may take a big hit, the whole package-store industry isn’t going to get eradicated overnight. In 35 states where wine is sold in grocery stores, liquor stores still exist. In Florida, which adopted a similar measure placed against similar legal restraints, liquor stores often exist next door or across the street to supermarkets, and offer better, more specialized wines as a way to serve a niche market. 

Upstate liquor store owners, who have been very vocal in the debate, counter that without as much demand for organic or specialty wines in their regions, they stand to be out-priced by wholesalers.

David Paterson has the consumers of New York State on his side. After all, what oenophile wouldn’t want more options, at presumably better prices? For the moment, he also has the support of Senate Conference Leader John Sampson and Assembly Speaker Sheldon Silver, but considering his ever-dwindling reserve of political capital and tanking poll numbers, Mr. Paterson may watch his legislative support for the measure turn to vinegar under the stomping feet of angry wine merchants.