Paterson floats wine-sale plan

ALBANY — Gov. David Paterson hasn't put the cork in his floundering proposal to allow grocery stores to sell wine and is instead offering a medallion system in a bid to win the support of liquor store owners.

Paterson made the pitch in a letter to liquor stores last weekend, adopting a proposal developed by Assemblyman Joseph Morelle, D-Irondequoit. Under the plan, liquor stores would receive two medallions they could sell to grocery stores. Supermarkets would need to purchase the medallions in order to sell wine for the next three years. The sale price would be negotiated.

"I have listened to your concerns and carefully considered your ideas," Paterson wrote. "The medallion concept is an innovative addition that will provide you with a real economic benefit."

But liquor stores said the proposal still falls flat, arguing that the overall idea of letting grocery stores sell wine would drive the liquor stores out of business. The medallion plan would only delay the inevitable, they said.

"Governor, you claim to understand our concerns about your job-killing plan," the group called The Last Store On Main Street wrote in a response to Paterson. "Yet you come back with a proposal that amounts to sentencing us to death row and setting the date of execution for three years from now. In short, your 'offer' is just insulting."

For the past two years, Paterson has sought a law to allow grocery stores to sell wine, both as a way to raise state revenue and help New York wineries sell their products in more places. Thirty-five states allow supermarkets to sell wine.

This year, Paterson has included a one-time franchise fee that grocery stores would have to pay to get a license to sell wine. The franchise fee would bring in about $300 million to the state over two years, officials estimate.

But some grocery stores are balking at the franchise fee, which they say is exorbitant and could eliminate their profits. The fee would be based on a percentage of gross sales and could range from $1,000 for small stores to more than $680,000 for large stores.