New York’s beverage alcohol retail tier remains independent as legislation permitting wine sales in grocery stores didn’t move forward. Retailers, however, remain vigilant as the issue isn’t going away. “It’s a perennial problem,” says Tony Russo, owner of Aries Wines & Spirits in White Plains, New York. “It keeps coming back. There’s a lot of lobbying money from the big grocery stores behind it. They keep pushing and pushing.”

While some of these issues are expected to be re-visited in the 2025 legislative session, the only legislation affecting liquor retailers that’s moved forward in New York this year could permit direct shipments of spirits, cider, mead, and braggot. State lawmakers approved such legislation. The bill was sent to Governor Kathy Hochul. A similar state law permitting wine direct shipments already exists.

The Metro Package Store Association, representing about 1,000 retailers, opposes it. “I support local distilleries and carry a lot of their stuff, but my concern is big suppliers will bypass the wholesalers and retailers and dominate the space because they have the technology and brands,” says Michael Correra, executive director of the Metro Package Store Association and owner of Michael-Towne Wines & Spirits in Brooklyn. “The market will become more technology-centric. Bigger suppliers might be much better at it than little distilleries. They can buy a small distiller and dominate that sector.”

The bill allows up to 36 nine-liter cases of spirits a year from a state distillery or farm distillery—or interstate shipping from a producer in states with reciprocal agreements—to be directly shipped to a legal-age adult. “I anticipate the law is going to get enacted and some distillery is going to sue New York,” Correra says. “The concern is it only allows reciprocal states. You can’t force reciprocation.”

While the bill has been touted to benefit local craft producers, not all retailers are buying it. “It was presented to me that I shouldn’t be against it because it’s protecting small distilleries,” Russo says. “The way the bill is written could allow a loophole for a larger distillery to purchase a small distillery and use it as a wedge to break the three-tier system. That scares us.”

Of all this year’s proposed legislation, the bill to sell wine in grocery stores carries the greatest potential impact on New York retailers. “We have about 3,800 wine and liquor stores in New York, and many wouldn’t survive wine sales in grocery stores,” Correra says. “Every year the pressure continues, so we will be back at it.”

Independent retailers are concerned wine sales in grocery stores would create a domino effect leading to spirits sales in supermarkets. “If grocery stores started selling wine, liquor sales in grocery stores would quickly follow because many independent liquor and wine stores would go out of business,” Correra says. “Spirits producers would be at a disadvantage because their market could become quickly underserved.” 

This legislative session has been the busiest in recent memory. Other proposed changes included allowing beverage alcohol retailers to sell non-alcoholic versions of adult beverages and permitting stores to sell a limited supply of wine and spirits to restaurants. “With post COVID, there are different attitudes,” Correra says. “Business is soft. Everybody is always looking to figure out how to get an edge in their business.”

New York liquor stores aren’t permitted to sell NA versions of wine and spirits. Supermarkets support a proposal allowing liquor stores to sell NA adult beverages as leverage for them to sell wine in grocery stores. “My wine sales are about 65%-68% of my gross sales,” Correra says. “People are looking for non-alcoholic versions of wines and spirits in liquor stores, but I’m not interested in trading away 68% of my business to gain a few dollars in non-alcoholic sales.”

New York retailers also don’t appear to support a proposal allowing them to sell limited amounts of wine and spirits to restaurants. “We are not interested in it at all,” Russo says. “The extra business would create a lack of control. We are not prepared to do that. We are interested in being retailers and not wholesalers.”