Some say the effect would be so bad, they may be driven out of business.
The bill, proposed by state Senate co-leader Jeff Klein (D-Bronx), would require that all spirits sold in the state be kept at warehouses in New York for at least one full day prior to sale. It’s referred to as “at rest” legislation. As it now stands, about 200 smaller-scale operators use less costly warehouses in New Jersey.
Our Manhattan liquor lawyers recognize that if this new liquor warehousing law passes, not only will many providers go under, but customers will be paying more for less. Prices for wine and liquor may go up as much as $2 per bottle.
Two of the state’s largest wholesalers, Long Island’s Southern Wine & Spirits of New York and Empire Merchants of Brooklyn, have warehouses already in the state. Likely these would be the two most benefited by the proposal.
While supporters of the measure say 33 other states have similar laws already in place, wine and liquor merchants point out that the warehousing prices in New Jersey are, on average, 2.5 times less expensive than what it would cost for the same space in New York.
Those who back the bill say it will bring approximately 1,000 warehousing jobs to New York. However, opponents question that figure, considering that so many of those that legislators would be counting on to store their wares wouldn’t be able to afford it. Workers would have to be laid off, and it would cost consumers an extra $27 million annually — despite the fact that consumers will be given fewer choices. This could potentially drive down overall sales, forcing even more providers to close shop.
A new “Stop the Cork Tax” coalition, a group of about three dozen wine and spirit businesses, has formed in order to battle the proposed legislation.
One point of encouragement for the group is that the same law was proposed last year and the year before – and it did not pass. That was, at least in part, due to vehement opposition by organizations like the New York Alliance of Fine Wine Wholesalers.
At the time, the organization pointed out that the proposed legislation would place an additional burden on the state by having to defend the measure in court, as it would almost assuredly be challenged and likely overturned on constitutional grounds.
The bottom line is that New York offers some of the best wine and liquor the world has to offer – and that is not attributable to the large wholesalers. If this measure passes, we are likely to lose many of these popular products.
The Wright Law Firm is a business law firm located in Midtown Manhattan. Call (212) 619-1500 for a confidential consultation.
More Blog Entries:
Manhattan Liquor License Crackdown on Sidewalk Cafes, Jan. 28, 2014, Manhattan Liquor Lawyer Blog