The longstanding power struggle over retail wine sales in New York is intensifying and could reach a breaking point this year. Grocery stores have been pressing hard for years to change laws preventing them from selling wine. They are opposed by thousands of independent wine and liquor stores. “It’s getting harder and more expensive to fight every year,” says Michael Correra, owner of Michael Towne Wine & Spirits in Brooklyn, New York, and executive director of the Metropolitan Package Store Association. “The opposition is much more organized and bigger, but we are constantly lobbying against it.”
The state’s approximate 4,000 independent wine and spirits retailers have vehemently defended their turf for decades but are concerned about recent developments. While a bill permitting wine in grocery stores stalled last year, other changes made in the state’s alcohol laws in 2024 might provide grocers new momentum. Those changes included legalizing direct spirits shipments from producers to legal-age state residents. The “New York State For Wine” coalition of grocery stores recently launched a website and a petition to allow wine sales in grocery stores. “If wine sales go into grocery stores, the selection will be trimmed substantially as maybe five or six grocery store chains will do 75% of the business, and half would probably be private labels,” says Jon Notarius, manager of Premier Group, which comprises three independently owned wine and liquor stores in the Buffalo, New York metro area (Premier Wine & Spirits, Premier Place, and Prestige Wine & Spirits). “They can’t possibly carry the amount of SKUs 4,000 stores can carry.”
The New York beverage alcohol retail tier is unique as each wine and spirits stores is independently owned. The state has allowed only one retail liquor license per entity since Prohibition’s repeal in 1933. The grocery store coalition notes on its website that most states permit wine sales in grocery stores and claims New York’s laws are outdated. “New York is ahead because it supports small wineries and distilleries,” Notarius says. “If you travel around the country, New York has the best wine selection. You have all these small suppliers, wholesalers, importers, and individual people making the buying decisions. It all goes away once wine goes into grocery stores.”
More than 70,000 wine SKUs are available in New York, according to Correra. “Where wine is available in grocery stores, the selection is much less,” he says. “You would be hard-pressed to not find wine available in New York from anywhere in the world that makes wine.” To help highlight this position, Correra will be a panelist on New York Wine & Grape Foundation’s Uncorking Collaboration: The New York Wine & Retailer Roundtable Series. The three-part webinar series kicks off January 29 and is designed to strengthen partnerships between New York wineries, retailers, and distributors.
New York retailers are already reeling due to competition from legalized recreational cannabis last year and challenges caused by health-conscious consumers drinking less beverage alcohol. “Wine business is down,” Notarius says. “We employ about 150 people. If wine sales went in grocery stores, it would be less than half.” Wine depletions decreased 8% nationwide for the 12 months through August 2024, according to SipSource.
While the coalition claims wine sales in grocery stores won’t hurt wine and liquor stores, Notarius and Correra reference developments in Colorado. Since wine sales in grocery stores became legal in that state in March 2023, about 200 independently owned beverage alcohol stores there have closed and more closures are expected, according to Mat Dinsmore, president of Colorado Independent Liquor Stores United and owner of Wilbur’s Total Beverage in Fort Collins. “As those liquor stores declare bankruptcy, wholesalers are not getting paid either in an already struggling market,” he says. “The long-term outlook for independents is horrible.”
The impact in New York could be worse. “It would be different than Colorado because we aren’t established selling beer and other things,” Notarius says. “More than half of independent stores would close right away, and then lobbying would begin for liquor sales in grocery stores.”
Notarius and Correra are also concerned about claims on the coalition website that spirits sales drive most of the revenue for liquor stores. New York’s spirits excise taxes are $6.44 a gallon compared to 30 cents a gallon for wine. While spirits sales generate greater tax revenue, they don’t necessarily account for most of a retailer’s net revenues. “The profit level on wine is twice that of spirits,” Notarius says. “Wine accounts for 64% and spirits are 36% of our overall dollar sales. The gross profit dollars that really matter to pay the bills and our employees all comes from wine.”
Wine accounts for 75% of sales at Michael Towne. “I will go out of business if wine goes into grocery stores,” Correra says. “There are a lot of wine and liquor stores in shopping plazas with grocery stores. I have a grocery store 20 feet from my front door. I wouldn’t survive paying my rent and overhead. I would be out and so would a lot of stores. Distillers would be infuriated because so many package stores closed, they would put liquor in grocery stores as well.”
Correra notes that New York’s independent wine and spirits retailers have contributed to a vibrant wine culture. “We are an incubator for brands,” he says. “Companies worldwide want to start here because of independents like me. You don’t have to jump through hoops at my store or other liquor stores in New York. You just knock on the door.”