Wednesday, February 11, 2009

A Wining and Entitled Monopoly

The effort to maintain the state's liquor monopoly continues, not only unabated, but arrogantly entitled as well. As Newsday reported yesterday, local liquor stores have begun an intimidation campaign against Long Island wineries: "As liquor-store owners and distributors push hard against a proposal that would allow wine to be sold in grocery and other stores, backers of the plan say intimidation of winery owners has become a tactic in their arsenal...Throughout Long Island's wine region, reports that liquor-store owners have been besieging wineries with phone calls urging support have been widespread. Individual winery owners have been reluctant to label the calls intimidation, but one observer sees it differently."

As the head of the LI Farm Bureau tells the paper: "The liquor-store owners are threatening to not do business with wineries if they say they are neutral on the issue," said Joseph Gergela, executive director of the Long Island Farm Bureau, which supports the wine-in-groceries plan. He said his counterpart at the New York Farm Bureau last week had discussions with state Attorney General Andrew Cuomo's office to charge that liquor-store owners "are going too far with the threatening." The attorney general's office did not return calls."

This is what is known as good old fashion restraint of trade-with a group of separate businesses acting in concert to protect their state controlled market share: "Representatives of local liquor stores either deny or downplay the threats. "As a coalition, we don't talk like that," said Jeff Saunders, who heads the Last Store on Main Street group and owns McCabe's Wine and Spirits in Manhattan. But whether individual stores are telling winery owners they could be dropped if they support the plan is another matter. "We say, 'It's up to you if you want to sell them or not,'" Saunders said. "Understand that emotions are running very high because there's a chance someone's going to take some food from our families' mouths."

Just because a proposed law may be a threat is no excuse for a disparate group of store owners to threaten other businesses in order to protect a monopoly; but the behavior is part of a pattern. Just try to open up a liquor store in a neighborhood-and watch as exisitng store owners and the SLA conspire to prevent the granting of that new license in the name of a "saturated" market.

And it is this behavior that the AG should investigate; after all, with only 2500 liquor stores in the entire state, New York ranks 46 out of 48 states in the number of stores per 100,000 (over 21) potential customers. And if the competition threatens some retailers who aren't used to competition, why should anyone give a hoot? Not to worry-these stores will be easily replaced by more enterprising main street retailers.