Monday, February 09, 2009

Bodega Revenue Up In Smoke: Bring in the Wine!

As the NY Post reported yesterday, the cost of a pack of cigarettes is going to hit $10 bucks-as a result of the tax hikes at all levels of government: "With a new 62 cent federal tax on cigarettes added this week with the passage of the State Children's Health Insurance Program law, the new price of a pack of cigarettes will soar past $10 in Manhattan. The NYC price is higher than anywhere in the country and more than twice the national average. And beginning April 1, two-thirds of that cost will be made up of city, state and federal taxes."

What the Post doesn't report, however, is what these taxes mean for local stores-particularly the bodegas that are threatened with extinction. Since 2202, when the city raised the cigarette tax by a whopping 1800%, bodegas and other small stores have lost close to 60% of their tobacco sales-an incredible $250 million a year; and tobacco, for better or worse has been a cash crop for the bodegueros.

So in the midst of a major recession, and in a city with a tax happy mayor, is it any wonder that the bodega owners are looking for some protection against arbitrary eviction? And is it any further wonder that the Bodega Association has come out strongly in support of wine sales in food stores?

The addition of wine would give the bodegueros another important profit center that would greatly increase their ability to not only survive, but also prosper. We have read that the liquor stores have started a coalition called, “Last Store Standing on Main Street,” to protect their state-sponsored monopoly. If this wasn’t so sad, it would be funny; because if nothing is done to help the bodegueros-and the supermercados that are also threatened-than the liquor stores may end up actually being the only stores left in our neighborhoods that aren’t big corporate chains.

The fact is that there is enough business for all of the small stores to share; since studies have shown that, when states increase the number of wine outlets, a greater amount of the product is actually sold-which is great for all of the struggling New York State wine growers as well.

New York City food stores are becoming an endangered species-with rents, taxes and regulations pushing many of them either out of business; or, as with independent supermarkets, to other less costly locations. The addition of wine won’t solve all of their problems, but it would be a great boost to all of the city’s neighborhood economies.