Wine retailers fear Paterson proposal will mean last call

Donald Roloff has been selling wine and liquor out of his store on Mamaroneck Avenue in White Plains for 25 years, but he told a solicitor this week that he fears an idea being pushed by Gov. David Paterson will mean last call for his business.

Roloff, the owner of Carhart Wine & Liquor Store, said he believes the governor's plan to let grocery stores sell wine will force liquor-store owners like him to close their doors.

Large chains will use their buying power to buy wine at low prices and then undercut the prices that smaller merchants have to charge, he said.

"How is a small store going to compete with Costco, CVS, Stop&Shop?" he said.

Paterson announced on Monday that he wants to allow supermarkets, bodegas, drugstores and other retailers that sell beer to also sell wine. The idea has been floated before in New York, but liquor stores and their advocates have succeeded in blocking it from becoming law.

The governor and his staff said the state can raise $100 million in fiscal 2009-10 revenue by charging a franchise fee to stores that want to get into the wine business.

The governor is also pitching the plan as a way to help New York wineries.

"There was a lot of research that went into this, and there are so many benefits," Erin Duggan, a spokeswoman for the governor, said yesterday. "The benefits really outweigh any drawbacks."

Duggan said all but about 10 states allow grocery stores to sell wine and beer. "We're really just keeping up with the times," she said.

It's a consumer-friendly idea, too, Duggan said. The increased competition will lower prices, she said.

"Although we appreciate the concern of New York's liquor stores, we don't believe this will lead to widespread layoffs or loss of business," she said in an e-mail. "New York's liquor stores focus their sales on spirits and handcrafted 'boutique wines,' and they should not be seriously affected."

There are now 2,400 stores in the state allowed to sell wine. That could grow to 19,000 if the Paterson idea becomes law, she said.

But Roloff and other liquor- store owners in the Lower Hudson Valley say the idea could put them out of business. Roloff pointed out that there's a CVS next to the strip that houses his store and a Stop&Shop nearby on Westchester Avenue.

It's a battle that he just can't win, he said. Grocery stores lure customers by offering a wide variety of products but he can only sell wine, liquor and accessories such as corkscrews, he said.

"I know grocery stores won't offer as many brands, but we'll lose out because if the consumer can buy wine at the grocery store, he's not going to make an extra trip" to the liquor store, he said.

He said wine accounts for about 50 percent of his sales. But wine sales are better than liquor sales because they carry a bigger markup, he said. The markup on a bottle of wine is about 40 to 50 percent, compared to 20 percent on liquors, he said.

Chris Sclafani, who runs Best Buy Liquor & Wine in New City, said that there have been previous attempts to put grocery stores in the wine business.

"I've been in this industry for 15 years, and there's always been that talk," he said. "If it does happen, it wouldn't be good. It would put a lot of people out of business."

Michael Thomas, a manager at Zachys in Scarsdale, said he does not believe consumers would benefit. That's because supermarkets are ill-equipped to store wine properly, meaning quality will suffer, he said.

"At liquor stores, you have expertise in handling wine," he said. "You're not going to get that at the supermarket. To them, it'll be just like selling another box of Kleenex."