New York State grocery stores mount renewed push to sell wine

“What pairs well with groceries?” asks one. “Wine. In 40 states, Americans can buy wine with groceries. Wouldn’t it be great to have the same convenience?”

Alongside a QR code that leads shoppers to a form letter that can be sent to a shopper’s local representatives and Gov. Kathy Hochul, the signs urge shoppers to “Tell New York ... It’s time for wine in grocery stores!”

It is the latest campaign in a decades-old debate, a renewed push by a coalition of supermarkets, the New York Farm Bureau and the Business Council of New York State, to legally allow grocery stores to sell wine – which is now permitted only in liquor stores.

It is a perennial battle that, so far, the state’s liquor stores have succeeded in fending off. But that hasn’t stopped the state’s supermarkets from continuing their fight.

The New York State of Wine coalition argues that allowing wine sales in grocery stores will be more convenient for consumers, help grocery stores grow and boost sales for New York wineries.

Opponents say the move would put small liquor stores out of business, make it harder for New York wineries and importers to sell their products, and leave consumers with fewer wine choices.

“We’re going to fight to the end on this, because this is death for us,” said Michael Correra, who owns a liquor store in Brooklyn and is executive director of the Metropolitan Package Store Association, which represents 117 liquor stores in Erie County.

The case for wine in grocery stores

Grocery stores feel they’re closer to winning the fight than ever.

“We believe it’s inevitable,” said Mona Golub, a spokesperson for Northeast Grocery, which owns Tops.

Golub pointed to a January Siena College poll of 803 New Yorkers, paid for by New York State of Wine, that showed 78% of those polled approve of wine in grocery stores. ”Consumers want the choice and the convenience,” Golub said. “They want to be able to purchase wine in the same store where they’re purchasing the food that they’ll either cook with it or consume with it.”

It would also give grocery stores – everything from giant chains to independent stores and co-ops – the chance to grow their business, she said.

The bill pushing for wine in grocery stores, sponsored by Democrat Liz Krueger in the State Senate, has provisions incentivizing the sale of wines produced in New York, by providing reductions in stores’ annual fees for New York wines sold.

Wine would be allowed only in supermarkets that are already licensed to sell beer. And it would limit wine sales to stores with at least 5,000 square feet that get a minimum of 65% of sales from food and food-related products. Those rules are aimed at preventing corner stores, gas stations, drugstores and big-box stores such as Walmart and Target from carrying wine.

The New York Farm Bureau believes that selling wine in grocery stores is a great opportunity for New York wineries to reach more consumers and increase revenue.

“Most wineries rely on their tasting rooms for a majority of their revenue, but grocery stores, obviously, see much more foot traffic,” said Kyle Wallach, associate director of public policy at the Farm Bureau. “The legislation would give potential to wineries and grape growers to expand their operations.”

Golub doesn’t pretend that grocery stores will be able to sell as wide a variety as liquor stores, or include every New York winery.

“The effort is to offer a variety that takes into account what people want. People want certain brands, and they want representation of locally made products,” she said. ”It will be a combination of quality, variety, geography from which it comes, but, ultimately, what our customers are asking us for.”

Why liquor stores oppose the push

Correra, the liquor store group’s executive director, pointed to Colorado, where dozens of liquor stores closed after that state began allowing wine sales in grocery stores, with hundreds more set to follow.

Golub said that the Colorado market doesn’t make a good comparison, because of its lower population density, as well as economic pressures and pressure from cannabis sales that have pushed liquor sales down.

But Correra notes that New York liquor stores are facing the same pressures and lost sales.

“You’re not going to sell more wine. You’re just going to make rich people richer and, once again, put small businesses out of business,” Correra said. “I want to protect my livelihood.”

Correra also laments that liquor stores, which employ an average of 10 people, don’t have the resources for a marketing campaign that the pro-wine sales coalition does.

“This is, once again, an example of rich, multifaceted companies that have huge, deep pockets,” he said. “We don’t have that kind of money.”

New York wineries competing for shelf space in big grocery stores are fighting a losing proposition, Correra said.

Wegmans would likely push its own store brands, with a limited selection of others, while all grocers would give preference to bigger wineries that can supply large orders, high-volume cost breaks and pay for merchandising, Correra said.

That would push small brands out and shrink selection, he said.

“I see this throughout the country. You have big brands because they muscle in, and they are able to do whatever they do, wine and dine and pay for shelf space,” he said.

The same would happen to New York wineries trying to sell their wine to big chains such as Tops, Wegmans and Whole Foods, he said.

“There isn’t one New York State winery big enough to compete at a national level. They, maybe, make 20,000 to 50,000 cases. Gallo spills that on a Monday,” he said. “When you go to a buyer at Whole Foods, you fly down and pitch your stuff. How hard is it to get your point across? It’s just not happening.”

Thousands of small importers, who represent small wineries in places such as Europe, would get pushed out, too, he said. While small liquor stores regularly meet with importers and salespeople and taste wine for an eclectic mix from store to store, big grocers would have a homogenous selection across their chains.

The result will be a smaller selection of wines available, sold by less knowledgeable people and having a devastating impact on New York wineries and other wine-related jobs, opponents said.

Correra warned that the fallout likely will be similar to the scores of bakeries, butchers and local pharmacies that have gone under, partly because shoppers now tend to make those purchases in supermarkets.

“How do you feel about putting more small businesses out of business so you can buy your wine conveniently somewhere?” Correra said. “Nobody wants to see more empty storefronts.”

More than a dozen United Food and Commercial Workers unions, representing wine and liquor sales, warehouse, delivery, food production and grocery store workers wrote a letter to lawmakers asking them not to allow wine in grocery stores, saying doing so would put hundreds of people out of well-paying jobs.

“There is no evidence that this legislation will increase employment or opportunities for supermarket workers,” the UFCWs wrote. “What it will do is enable nonunion operators to increase their market power, while threatening union jobs in the existing liquor sales ecosystem.”

Westfield winery owner is skeptical

Westfield winery Johnson Estate said the Farm Bureau is “ignorant” for backing the bill.

“It’s very simple logic to say, ‘Gee, more outlets for wine, therefore we ought to sell more wine, therefore the tide ought to lift all boats and that ought to lift New York wineries,’” winery owner Fred Johnson said. “Unfortunately, that is superficial and facile, and the effect of putting wine in grocery stores, the way it’s done, will actually hurt New York wineries.”

The only type of wine that makes sense economically for grocery stores are big, inexpensive California brands and brands from the biggest importers, Johnson said.

“So, what’s just going to happen is the supermarkets will stock the very fast-moving items, which are also the fast-moving items in the little liquor stores. That’ll suck that business out of the little liquor stores,” he said. “Big guys like (The Premier Group) probably can survive it, but the little guys all around the small towns of New York − that’s just going to knock enough out of their business. They’re going to fold. And all those little guys are my customers.”

A better solution, Johnson said, would be a measure that would allow grocery stores to have local liquor stores open store-within-a-store formats in supermarkets. It would balance convenience for consumers with fairness for liquor stores.

It would be more fair than having liquor stores, which have been constrained since Prohibition from opening more than one location in New York, suddenly compete with big, deeper-pocketed grocery chains, he said.

“They were held down for 90 years, until all of a sudden, they want to throw them and even their smaller cohorts into the major league football team up against the Wegmans and Tops,” he said. “It’s just terribly unfair.”