Albany to Supermarkets and Bottlers: Drop Dead!

David Paterson, the governor whose poll ratings are approaching junk bond status, ignored the pleas of food industry executives and supermarket unions, and pushed through the expansion of the bottle bill that will drive another nail in the coffin of food retailers in New York City: "The agreement announced just before midnight Saturday also restores some proposed cuts in health care and higher education and expands the state's bottle law, putting nickel deposits on bottled water under the measure that currently covers only carbonated drinks."

The agreement is also being reported by NY1: "The bottle bill will also be expanded to include new nickel deposits on bottled water..." Unreported is the fact that, as far as we know, the measure includes a "NY Only" on all deposit containers-something apparently designed to stymie non-New York bottles and cans from being redeemed. Missed by all of the legislative hochems, is the fact that over 95% of downstate retailers redeem manually-and not with reverse vending machines that can spot the out of state containers.

This seemingly rational measure is, unfortunately, irrational-and devastating to all of the state's small bottlers who can't afford the duplicate lines and storage space necessary to accommodate the additional inventory requirements. So for Good-O, Inca Kola and Top Pop-just to name a few-this could, in combo with the nickel heist, really mean their demise. And, as far as the unredeemed deposits are concerned, it will lead to a nice steep price increase at the check out-a regressive tax on all of those struggling New Yorkers trying to make ends meet.

And with Coco Cola threatening to close plants in retaliation-especially in Senator Thompson's Buffalo district, the bottle bill will be a job killing measure; except in the mind of NYPIRG's Laura Haight: "Opponents, including Coca Cola bottlers, are threatening to leave the state, and say thousands of jobs may be lost if the bill becomes law. Environmentalists and redemption centers argue that an increased handling fee in the bill for stores and redemption locations will actually create more jobs."

Haight certainly can't tout any degree from the London School of Economics. If higher costs lead to plant and store closings, as they will in this case, the fact that a new government tax is sending a bit of loose change into the redemption system won't alter that scenario. As for jobs at redemption centers, you''ll be able to count them with the fingers of one hand.

Which brings us back to the supermarkets-and the governor's professed concern for promoting their growth in low income neighborhoods. Here's a synopsis from the governor's January state of the state address:

"In the New York State of the State address today, Governor David A. Paterson announced the Healthy Food/Healthy Communities Initiative, part of his signature initiative to combat the childhood-obesity epidemic. Research shows that the presence of supermarkets in communities helps to prevent obesity. The Healthy Food/Healthy Communities Initiative is modeled on a successful Pennsylvania program, the Fresh Food Financing Initiative (FFFI), which is helping to alleviate the scarcity of grocery stores in low-income communities. The fund has provided $51.8 million in grants and loans to 62 supermarkets projects across the state. In 2008, Harvard University named FFFI one of the nation’s most innovative government programs."

Okay, so what's the state doing on behalf of supermarkets? Well, exactly nothing except piling on more and more regulatory and tax burdens to make operating in the state more expensive. Which is the point we have made over and over: the best thing the state and New York City can do is to tax and regulate less. And as Crain's has pointed out, the Hispanic supermarket owners going to North Carolina to open stores are not doing so because that state is issuing grants and tax breaks; it's the lower cost of doing business, stupid!

But wait! The governor is providing $10 million for a supermarket initiative that will allegedly promote supermarkets in low income neighborhoods. How droll. At the rate the state is raising taxes and fees, the $10 million will be put to good use for signs to inform the public all over the neighborhoods of the city: A Supermarket Used to be Here.

And the one measure that could actually make supermarkets more profitable-allowing wine sales-was defeated because the speaker is full bore into the liquor lobby protection racket. As Newsday opined yesterday:

"Unfortunately, liquor stores have once again killed a plan to allow sales in grocery stores Grocery stores should be able to sell wine, but the liquor lobby once again kneecapped the idea, which would have garnered the state $100 million or so in franchise fees. Liquor stores, which have an official monopoly on sales, insist on protectionism. The truck drivers who deliver the goods provided the lobbying muscle. Expanding the market for wine would have allowed Long Island's wineries to thrive and consumers to get lower prices. In return, the state could have eased the impact on liquor stores. Prohibition's legacy remains intact."

So, as the state's budget goes to its final resolution, we are facing the worst economic set of circumstances in our memory-with the anti-entrepreneurial scolds at the WFP, along with their legislative allies, doing everything within their power to drive all business from the state-fair share indeed! As the NY Times reports this morning: "It is impossible to view this budget as a path to economic recovery,” said Kenneth Adams, chief executive of the Business Council of New York State. “Businesses and jobs will hasten their departure from the state, and how can you blame them? Albany treats them with disdain.” When will the WFP, and its legislative handmaidens, understand that the government generates no economic growth; but it can sure dampen it-something that will be seen in the months ahead.