March 12, 2009

N.Y. Gov. Proposes Wine Sales at Grocery Stores

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Students looking to savor a glass of local vino may not have to travel any farther than Wegmans if the State Legislature approves Governor Paterson’s recent proposal, which allows grocery stores to sell wine for the first time in New York State history. But the liquor store owners affected by the proposal claim that the governor based his decision on drunken logic.
The proposal came about as a means of decreasing the state’s multi-billion dollar budget gap. Supermarkets selling the wine would be required to pay a franchise fee to the state, which Paterson hopes would raise over $100 million.
“There would be a good chance that we would close,” said Rob Hayes, manager of Judd Falls Wines & Spirits. He pointed out that a liquor store owner can only run one store, while a supermarket owner can own several. This discrepancy would make it harder for small liquor stores to compete with large supermarkets.
Liquor store owners also claim that the proposal would make it easier for minors to buy wine, despite the fact that there is no current data supporting such a contention.
“A grocery store is a very big place,” Hayes said. He questioned whether grocery store clerks could monitor the legality of alcoholic beverage sales to the extent that a liquor store salesperson could since grocery stores have such a wide array of products.
In response to these claims, Gary Woloszyn, Wegmans store manager, argues that grocery stores can actually monitor transactions of alcohol better than liquor stores.
“Our systems for ID checking are more complex than in liquor stores right now,” Woloszyn said.
Opinions on both sides of the issue seem to be determined by business interests. Supermarkets focus on the opportunity the proposal would give them to branch out into a new area, while liquor stores want to protect against competition.
Caught in the middle are local wineries, which produce many of the wines that would appear on Wegmans shelves. Dave Peterson, who is the general manager of Swedish Hill Winery, which his family owns, hesitated between expressing solidarity with the winery’s current business partners and admitting that the proposal offers an opportunity for market expansion.
“We’re on the side of the stores that have supported us,” he said. “The livelihood of existing liquor stores is at stake.” However, he also admitted that since, “some stores haven’t supported local wineries … it is tempting to have more sources sell our wine.”
Peterson also refuted the liquor stores’ claim that the proposal would enable teenagers to buy wine.
“There is no data to support that,” he said.
This legislation could potentially benefit the New York wine industry as much as it could harm liquor stores. Both Peterson and Woloszyn alluded to the potential to expand New York State wines into new outlets, particularly focusing on local products.
As this recent proposal is yet to be made into law, many local stores have yet to decide their definite business strategy when it comes to selling wine. Jason Burnham, owner of Jason’s, a local grocery store in Collegetown, projected that he would probably invest in wine but only in a limited quantity.
“We’re a very small store so I think we would sell a little bit [of wine],” Burnham said. “We would probably take one row of beer out and replace it with wine.”
Paterson’s proposal could also benefit students by making it more convenient to buy wine, rather than less healthful alcoholic beverages like beer. According to Nutrition Journal, wine contains a natural source of antioxidants, which helps prevent the physical effects of aging.
“If I could pick up a case of wine at Wegmans instead of a 6-pack, I would,” said Luke Chan ’12. Chan, who is currently 18, can not do either. He eagerly anticipates the day when he will be able to legally obtain such beverages.