Wine Merchants Throw Grapes of Wrath at Paterson Proposal

A state budget proposal from Governor David Paterson that would allow grocery stores, delis and convenience stores in New York to sell wine has many local merchants drunk with anger and trepidation.

The proposal could be approved as early as late-March, when the state legislature votes on various bills in New York's proposed 2010-2011 budget.

Proponents point to a projected $300 million windfall for the state over the next two years as a result of the measure, which would be used to avert cuts in health care, as well as convenience and potentially lower prices for customers. Thirty five states already allow wine sales in grocery stores. Costco is the largest wine retailer in the country.

But those who oppose the measure, including most Rye-area liquor merchants, say the governor's projections are overblown and that the move could shutter small businesses and increase underage drinking.

"It would kill my livelihood," said Melissa Gordon, manager of Port Chester Wine & Liquor on Westchester Avenue. "We have a Costco 20 feet away and a Stop & Shop around the corner."

If those stores began stocking wine, she would immediately be forced to lay off some of her ten employees, she said.

Paterson spokesman Matt Anderson said the governor's office is offering liquor merchants an opportunity to sell different types of products in a move to mitigate the potential effects of the proposal.

"We're willing to work with the industry on this," Anderson said. "We think it offers consumers greater choice and convenience."

Tony Russo, who owns Aries Wines & Spirits in White Plains, said that according to statistics he obtained from a trade group, 40 percent of the state's 3,000 wine and liquor stores could go out of business within a year of the proposal becoming law. He added that the measure could have a "ripple effect" if large retailers buy directly from manufacturers and put salespeople and warehouses out of business.

"All this [proposal] is, is moving money from one pocket to another pocket, and then finding out you're out of money," Russo said. In other words, while the state would see short-term revenue, the long-term effects could be devastating, he said.

Russo also said that the governor's revenue projections are "pie in the sky," as many delis and bodegas may forgo the opportunity to sell wine. Those that do apply for a license could be emboldened by a lack of state oversight and not bother to renew the license once it expires.

Even a local supermarket manager who supports the proposal acknowledged the effect it could have on small businesses.

"We have a liquor store next door, and stores like that will be hurting" if the proposal passes, said Carl Wickham, manager of the Midland Avenue Pathmark in Port Chester. He added that because Pathmark doesn't have an affiliated liquor store like several other supermarket chains, his store would probably see a significant spike in profits.

Opponents of the measure also argue that wine sales in corner stores and delis could make alcohol more accessible to minors.

"Wines and spirits are not milk and they shouldn't be sold in a supermarket by a teenager," Russo said, adding that store employees, many of whom are young people, could be inclined to sell beer or wine to underage friends.

But one expert without a financial stake in the proposal said underage drinking is a non-issue.

"Underage drinking is always a factor that people bring up without really being able to substantiate it," said Ned Towle, director of the Westchester Wine School, which offers courses at the Hilton in Rye Brook. "I suppose it's a risk, but I would call it a small risk."

Anderson, Paterson's spokesman, agreed, calling the claims about underage drinking "completely unfounded."

Towle added that most wine drinkers prefer to buy from professionals who can offer expertise and advice, which supermarkets and convenience stores don't have.

One Rye wine salesman actually supports the proposal because, he said, it would usher in necessary changes to the state's "antiquated" liquor laws.

"If you have a favorite wine store, wouldn't you want to be able to buy a baguette and a piece of cheese to go along with your wine," said Cai Palmer, the owner of Wine at Five on Purchase Street in Rye. "In any other civilized country in the world [and most U.S. states] you can do that. So maybe New York is uncivilized."

The state's Alcohol Beverage Control ("ABC") Law has gone essentially unchanged since the end of Prohibition, and has been criticized for decades. Palmer said current laws are "monopolistic," allowing distributors to set prices and determine who can carry their products.

"Will some of the mom-and-pop stores go out of business? Absolutely, there's no denying that, but those are not necessarily the stores that people want in their communities," Palmer said. Paterson's proposal "won't affect my sales. I work very, very hard to find very good wines."

According to a Siena College poll released last week, 58 percent of New Yorkers support the sale of wine in grocery stores.

A study published last month by the New York Wine and Grape Foundation, a trade group, revealed that in 2008 the wine industry generated about $7 billion in economic activity for New York. That includes wine and grape sales, revenue from wine-related tourism, as well as wages paid to workers in the industry.