ALBANY: Wine sellers telling state to put a cork in it

The Castellani brothers just don’t understand the logic.

Chris, the owner of Super Market Liquors and Wine in Niagara Falls, says Gov. David Paterson’s plan to expand wine sales in New York won’t live up to the lofty revenue projections included in his tentative budget.

Jamie, owner of the Wine and Liquor Outlet in Lockport, believes Paterson’s proposal will not only miss its financial mark, but will also deal a huge setback to the state’s expanding wine industry.

Both men agree that Paterson’s idea for generating extra revenue will have unintended consequences, especially for their businesses and other independent liquor store owners like them.

“I don’t understand why the state is doing this, other than they are trying to raise some revenue,” Jamie said.

Under current state law, wine sales are allowed only at locations authorized by the state Liquor Authority. Paterson would like the market to be expanded to include grocery stores, mini-marts, supermarkets and even gas stations. The governor says expansion of wine sales, if approved by the state Legislature, would add $105 million in new licensing fee revenues for the state in the 2009-10 budget, $54 million in 2010-11 and $3 million per year every year afterwards.

The Last Store on Main Street, a statewide coalition of liquor store and winery owners who are looking to block the proposal, estimates that the move could force 1,000 independent operators to shut down, resulting in the loss of roughly 4,000 jobs. The Castellanis believe losing those smaller operations will cause the state to lose more money than the proposal is worth. Paterson plans to charge grocery stores and other outlets a licensing fee of $110 per year. By comparison, Chris Castellani said the state charged him $1,536, plus a $90 filing fee, for wine-selling rights last year.

“If the whole purpose of this is to raise money for the state, why are they only looking at $110?” said Chris, who has owned his liquor store on Niagara Falls Boulevard since 1984.

“How is the public being served if we have wine being sold in grocery stores and it causes 1,000 liquor stores to close up?” he said.

Jamie Castellani said he’s also worried about the proposal’s impact on the sale of wines produced in New York. Unlike independent liquor store owners who have formed partnerships with local wineries in an effort to promote products made in New York, Jamie said larger, big-box grocery stores and supermarkets are more likely to choose low-cost, high-volume over quality and selection every time.

“Every local retailer provides attention to the wineries in our neighborhoods,” he said. “They are our friends and our neighbors.”

Currently, 35 states allow food retailers to sell wine. Massachusetts voters rejected a similar idea just last year. The Last Store on Main Street says one of the main reasons had to do with concerns about under-age drinking. According to the coalition, alcohol-related fatalities in Florida, California and Texas - states where wine is sold at locations other than liquor stores - are more than double the rate in New York. They argue states like New York have tighter controls at the point of sale due to tight proofing standards under regulations set by the state Liquor Authority.

“It is outrageous that a leader in our state’s government would even raise the idea of a proposal that would carry such devastating effects to New York’s residents,” said Stefan Kalogrides, president of the New York State Liquor Store Association.

Ann McCarthy, consumer affairs manager for Wegmans, said store surveys show that the majority of customers would like the option of being able to buy wine with their groceries. She said Wegmans stores are just as committed to guarding against under-age drinking as any independent liquor store operator and the proof is in the company’s “100-percent proofing policy” which was instituted four years ago. Under the policy, all individuals attempting to buy beer are asked for identification as proof of age. Since the policy was put in place, McCarthy said, 17 million beer transactions have occurred at Wegmans stores, with just one violation having been recorded.

“Anyone purchasing beer in our stores is required to show proof of age,” she said, adding that the same would hold true for wine sales.

State lawmakers in Albany will ultimately decide if Paterson’s plan moves forward. State Sen. George Maziarz, R-Newfane, said he’s been meeting with opponents and supporters on the issue and intends to continue to do so in the coming weeks. At this point, he has not decided which way to vote.

“I’m still listening to both sides,” he said.