Grapes of Wrath

In yesterday's NY Post, the paper details some of the acrimony surrounding the fight to allow supermarkets to sell wine: "A bottle of red, a bottle of spite - it all depends upon your side of the debate. Gov. Paterson's proposal to expand wine sales in New York - and pour money into state coffers - has pitted supermarkets against liquor shops, and in some cases, it's gotten vicious."

How vicious? Well, threatening wineries with a boycott is pretty vicious to us: "One supporter, upstate vineyard owner Scott Osborn, said that after he testified in favor of the proposal at a budget hearing last month, several liquor-store owners threatened to pull his wines from their shelves. "I used to be pushing your wines, but now just looking at them makes me want to puke," one liquor-store owner wrote in e-mail. "I'll never sell any of your wines ever again!"

And this is no isolated incident; scores of liquor store owners-zealously out to protect and preserve their state-sponsored monopoly-have made similar calls to other state wineries. This disturbing restraint of trade campaign is being looked at by AG Cuomo: "Osborn, who owns Fox Run Vineyards in the Finger Lakes, said the expanded market for his wine would help business. He asked Attorney General Andrew Cuomo to investigate what he said was a "coordinated campaign of intimidation and retaliation." Cuomo's office said it's reviewing the request."

The liquor stores, hard pressed to come up with any public interest rationale that would justify the preservation of an anti-competitive monopoly-and to deflect attention away from their pressure tactics, managed to find one policy objective that didn't simply devolve from their own narrow self interest-under aged drinking: ""We don't threaten anybody," said Jeff Saunders, owner of McCabe's liquor store on the Upper East Side and founder of The Last Store on Main Street, a coalition opposing the Paterson plan. Saunders said permitting supermarkets to peddle pinot noir will not only put liquor stores out of business, but increase underage drinking. He said teens would be able to purchase wine more easily in grocery and convenience shops, where cashiers may not be vigilant in preventing such sales."

So now we've seen everything! Liquor stores looking out for the kids. But, who are they really kidding? This is all simply about your basic protectionism-and the damn the consumer mentality that goes with it; something that Crain's New York Business understands very well.

In this week's magazine (subscription only), Crain's tells us: "A proposal to allow grocery stores to sell wine in New York state comes down to a choice between more competition and increased tax revenue on one hand, and continued protection for a regulated industry on the other...If the idea is approved, consumers would enjoy lower prices and more convenience. New York's wine industry, which desperately needs new markets in the state if it is to grow, would also benefit by increasing its distribution network. That's why the New York Farm Bureau is an enthusiastic supporter, as are many of the state's most innovative wineries."

And Crain's goes on to voice support for changing the law so that the liquor stores can evolve-and adapt to the modern age: "Liquor stores' real problem isn't competition; it is the archaic laws that hamstring owners. They can operate only one outlet, which precludes them from expanding and amassing the economic wherewithal that would allow them to compete. The state also prohibits them from selling complementary products such as gift bags, cheese or snack items...The Legislature should approve the proposal to allow wine to be sold in grocery stores, and accompany it with legislation loosening the rules that stifle liquor stores. The result will help the state's consumers and its finances."

So let's look to modernize this entire industry-and give consumers a choice at the same time. In the process, NYC's neighborhood supermarkets-hurting badly during the economic downturn-would get a needed boost. The benefits of such a move far outweigh any of the negatives; the ball is in the legislature's court.