It's always gratifying to see an article such as this one. Not everyone is blind to the hypocrisy of the big box stores' money grab."The only people who will truly benefit from this are those folks running your favorite local supermarket chain. Trust me, if they were ponying up $300 million each year for licenses, they’d be a lot less enthusiastic about the proposal.
Read more here >>But with a one-time cost, and limitless profits into the future, what a great deal this is."
"So from a jobs perspective, and economic development perspective, this plan doesn’t measure up. Any plan that reduces jobs and doesn’t deliver real economic growth is simply a non-starter.Clearly, we also have an obligation to first “do no harm” as it relates to our teenagers. Our young people face enormous challenges today, much more than when I was growing up, and they need our help and support. Because this plan would make wine more accessible to teenagers, it must be rejected.Wine is not a food and it is not beer. Wine has three to four times more alcohol in it than beer. And we know from a Columbia University study that teenage girls who have tried alcohol would rather drink wine than beer if given a choice. That’s a recipe for trouble.New York already spends $3.2 billion every year to deal with the impacts of underage drinking, from accidents and violence, to teen pregnancies and diseases. In fact, officials at the State Office of Alcoholism and Substance Abuse Services say that underage drinking is the No. 1 substance abuse problem in New York State today.It is a hard truth that teens will have an easy time getting wine if it’s available in every deli, gas station, bodega and corner store, rather than limited to small, owner-operated wine and liquor stores. That is where it belongs and where it should stay."
FOR IMMEDIATE RELEASE Contact: Wendi Leggitt(212) 681-1380 or (301) 247-0528
STATE DOB KILLED STUDY OF WIGS, COMMISSION CHAIRMAN TESTIFIESTestimony Conflicts with Commission Report, Which May Have Been Doctored
NEW YORK, NY March 25, 2010 – The State Division of Budget put a halt to an independent economic impact study on legalizing wine sales in grocery stores, has changed the revenue estimates associated with the proposal without any basis, and may have doctored a state report to hide its actions, leaders of the Last Store on Main Street Coalition charged today.
At a State Senate hearing on Wednesday conducted by Senator Craig Johnson, Robert Pitler, chairman of the New York State Law Review Commission on the State Liquor Authority, testified under oath he was ordered by the Division of Budget not to conduct an independent economic impact study on Governor Paterson’s plan to legalize wine sales in 19,000 new outlets.
Pitler said the commission had $200,000 set aside that could have been used to conduct the study before the DOB ordered the commission to cease and desist. When pressed by Senator Johnson, he could not name the DOB official who ordered the study killed.
Pitler’s sworn testimony conflicts with the commission’s report, which specifically stated the study was not conducted because the commission did not have funding for it – raising questions about who doctored the final report to include that false statement.
In addition, Pitler said in his testimony he couldn’t account for the revenue projections included by DOB for wine in grocery stores, which mysteriously increased from $162 million to $300 million between the proposed Executive Budget and the 21-day amendments. Pitler said in his testimony that the projections “seem to increase every time the budget deficit increases.”
“The Paterson Administration has a history of playing fast and loose with the truth, and has failed time and again to get its revenue projections right. But intentionally doctoring a state report to include false information is a serious matter that cannot be ignored,” said Jeff Saunders, founder of the Last Store coalition and president of the Retailers Alliance. “It’s clear the DOB killed the study because they feared it would undercut any argument in favor of the job-killing plan to legalize wine sales in 19,000 new outlets.”
The Paterson Administration has yet to answer a Freedom of Information Act request submitted on February 10 for any and all information to back up its phony $300 million revenue projection, yet another indication there is no backup for this revenue projection.
“Governor Paterson likes to criticize the Legislature, but the record shows he has relied on phantom revenue projections over and over again,” said Stefan Kalogridis, a coalition leader and president of the New York State Liquor Store Association. “There is simply no way the state would raise $300 million from this bad idea, and clearly no justification to backup that number.”
While it’s not clear who in DOB killed the economic impact study, it’s clear why: An industry study found that nearly 40 percent of stores would go out of business and put more than 4,500 people out of work without creating a single new job.
The Senate Democratic Majority and Assembly Democratic Majority have both rejected the Paterson plan, recognizing that the revenues are phony, that it would crush Mom-and-Pop stores and increase underage drinking.
“The Senate and Assembly looked at the facts, and the phony arguments from Big Box stores, and made the right choice by rejecting this dangerous idea,” said Michael Correra, a coalition leader and executive director of the Metropolitan Package Store Association. “Now we need to get to the bottom of the phony numbers and phony statements in the Commission report pushed by the Division of Budget. This is yet another example that our government under Governor Paterson is a disaster, if not worse.”
# # #
" We all know what the government is after: more tax revenue. And to their credit, government leaders have acknowledged that this plan would attract millions of dollars. But every time they seem to gravitate toward an honest explanation -- short-term tax revenues -- they fall back to a position of support for the New York wine industry that rings a bit hollow.
Why is that? Well, the superficial market analysis put forth by the state is so blissfully ignorant of anything approaching price points, consumer choice and distribution realities that it's not even worth de-constructing. Every conversation about the impact on New York state wine ought to include these points, but instead we get platitudes that come off as half-hearted."Read More >>
"Sure, you’ve got your one-time influx of license fees, but we all know how quickly those would simply be subsumed by the black hole that is state government. Do you really think it will show up in any way that matters? I don’t.
It’s not going to hurt the behemoths all that much if they don’t get wine sales. And it’s not going to help the real people working at them very much if they do.
I rather doubt it would ever translate into raises for the rank-and-file workers and managers that need them. It’s going to translate strictly into greater corporate profits. And I think that most of us know that, what corporate gets, it doesn’t give back.
And I can’t see it translating into more jobs. The big chains might hire a wine expert or two, chainwide. Maybe add an employee or so at the bigger stores — but mostly, I’d guess, the work is going to fall right onto the mostly overworked-and-underpaid employees who are there already."
"Initially, Patterson estimated that the measure would bring in $147 million over two years from a one-time franchise fee that retailers interested in selling wine would pay, per store. But in order to help plug a $750 million budget gap, he increased the fee that would be required of stores with gross sales of over $1 million. And not just by a little.
Given the higher revenue projections, proponents are hopeful wine at grocery will pass. But it remains to be seen whether the franchise fee will be too high for widespread participation. Without adequate retailer buy-in, there is a chance that more revenue would have been produced under the old plan."And, a little further down they conclude:
"Patterson may have failed to do his homework."So, apparently even the supermarket industry feels that the higher franchise fee will actually produce LESS money than the governor's original proposal because it will cause many stores to not buy-in at the higher franchise fee level. I guess that's what happens when the desperate Governor uses PFTA (Pluck From The Air) to get income projections for his amended WIG franchise fee proposal. Oops.
Seven whiskies have scooped the titles of ‘World’s Best’ in the final round of Whisky Magazine’s World Whiskies Awards 2010.
"This is what happens when you buy and drink, cheap, mass produced wines…and it is one of the main reasons why I started Rad Grapes – to give consumers options in purchasing and drinking really great, quality artisanal wines, sourced from real farmers, at a great price point -0therwise, you really don’t know what you are drinking…Pinot Noir for $9 a bottle? Really? I have always told my customers that it is impossible to produce a Pinot Noir at such a price point….and I guess I was right, because it is not real Pinot Noir.
If you are buying wine only based on price point at your local wine shop this is what you end up with – not exactly what you expected and paid for – and that is exactly what NY consumers will end up with if Supermarkets are allowed to sell wine in NY – garbage and plonk at great price points….Good luck with that one, because they are also greasing the political palms in NY, while selling fake wine… what am I talking about?
Victor, N.Y. —
Constellation Brands Inc. denied Thursday that its $25,000 campaign contribution to the re-election of Gov. David Paterson was tied to Paterson’s proposal to allow wine sales in grocery stores. Interesting huh? read more…
So there you have it: selling what amounts to fake, cheap “not Pinot Noir”, while contributing $$$ to the NY Governor and lobbying to push allowing wine sales in supermarkets…Really? There are just so many thing wrong with this story on so many levels, that I don’t know where to begin. Real wines come from farmers and not factories…keep that in mind when shopping for wine next time. Cheers…"
Constellation’s contributions to the governor were not, in any way, connected with the wine in grocery stores issue, or any other specific issue.(Excuse me. No one I know gives away $25,000 without expecting something in return! Everyone knows that Governor Paterson has zero chance of getting his party's nomination, much less getting elected. That being the case, why would anyone give him any money unless they wanted something he could deliver before he retires? Just a thought.)
(Ah, so it is pay for play, but you just don't want to list what it is you are paying for.)
Various Rochester community leaders organized a fundraiser for the governor in Rochester on January 12. Constellation was asked to participate in this event as a co-sponsor, which we agreed to do
because we support many of the governor’s policies and programs during these difficult economic times.
(I'd say that would be just about the time that rumors of WIG being back in the budget came out.)
The contributions had been planned for at least a month before the fundraiser.
(See my first comment. He's not going to be elected. Game over.)
A donation to the governor's election campaign should not, in any way, be construed as a vote for or against any provisions of his budget.
(Now this one really burns me. I do a ton of business with this company annually, and this is how they thank me: by staying neutral while Paterson and the big box stores plot to put me out of business. I, for one, think this "neutral" thing is a cop-out. On this point, Constellation, you need to come out clearly in support of your present customers.)
In the past, our elected officials have considered the issue of allowing wine to be sold in grocery stores and, now, as in the past, we remain neutral on the issue.
(Well the Coalition for the Last Main Street Store is another trade association too. And many of your competitors like Diagio and Bacardi have contributed to it. Even Southern Wine & Spirits, your exclusive New York wholesaler, has contributed to our cause. They don't have a problem with 'remaining neutral.')
When it comes to industry issues, it is our policy to work through trade associations, such as DISCUS and Wine Institute.
(Read: we'll make money from anyone, we're not proud or particular. Come to think of it, since we own all the top wine labels on the planet in the supermarket price points we stand to gain quite a bit by having wine in big box stores. That's because our competitors won't even make the cut. We will own the shelf space just like Proctor & Gamble owns the toothpaste shelf.)
Constellation supports our distributor and retail partners and will continue to work with them no matter what the outcome of this debate is.
Cheryl Gossin
VP, Corporate Communications
Phone: 585-678-7191
Mobile: ***-957-****
207 High Point Drive, Building 100
Victor, New York 14564
"I've read the good professor's report. It is bogus research. Given I own a Master in Marketing Science and work as a Senior Executive in the data and analysis industry, I am an expert with credentials to question his study. What are your credentials.
The good professor used data from 40 years ago, didn't account for economic environment change and applied no variant to account for negative impact of big box retail that has been researched and document by numerous institutions.
Despite every attempt to massage his forecast, he still came up with a 32% loss in sales for liquor store. The number is more likely 50%-60% when factoring in big box retail impact with their lobbying efforts for tax breaks from government that aren't afforded to small business.
Last year, Wal-Mart received $2 Billion in tax subsidies from taxpayers. Do you not understand how this impacts fair competition and negatively impacts the principles of capitalism when the big and powerful get breaks mom and pop don't receive.
I am not against wine in groceries. I am against the ongoing destruction of our economy by eliminating small business so companies like Wegmans can increase their profits while not hiring one new employee.
You get Dan Wegman to give back the tax breaks and end his expedition to repeal the Death Tax, I am happy to give him the wine. Unfortunately, he won't agree to this because given back the millions in tax breaks won't be offset by wine sales.
I just want to see liquor store be given an even playing field. This proposal doesn't provide for this until Wegmans gives back the tax breaks."
"The New York Farm Bureau is lobbyist firm that doesn't represent the wine growers or liquor stores. They are funded by grocery stores. This is not an independent third party. It is a propaganda arm of the grocery stores and they spend millions of the ill-gotten taxpayer proceeds on false advertising. They are nothing more than a front for Wegmans to do the dirty work.
Grocery stores that evade paying taxes are horrible companies. Grocery stores that only allow employees to work 29 hours to evade health insurance costs and pass them on to the taxpayers are horrible companies. Owners of grocery stores that lobby Congress to repeal the Death Tax and pass the cost onto their customers are horrible companies.
Tell me why any company that pads their bottom line with tax breaks and eliminates jobs should get anything more from the NYS taxpayers?
Wake up and smell the coffer Suarez. Its companies like Wegmans that are helping destroy the NYS economy."
Your editorial on Feb. 4 titled “Some Wine With That?” was remarkable in that, in five short paragraphs, it contained more innuendo, illusion, allusion, and plain old misstatement than I’ve ever before seen in such a short piece.
From the top, I’ve no reason to doubt that almost 600 towns have no liquor store upstate. Newsflash – many towns in rural New York have no supermarket, movie theater, nail salon or four star French bistro, either. I think your writer should also know that many rural inhabitants like their elbow room, sans retail over-saturation, and are not pining for a mall near them anytime soon.
Re your writer’s killing of two entities with one wild assertion, New York, like all other states in the Union, created their liquor control laws when Prohibition was repealed in order to provide their citizens with a controlled environment for the safe importation, distribution and controlled sale of alcohol. The laws (and by the way, there’s more than one), were definitely not written “in true Albany fashion” to “protect the interests of one powerful industry”. Have the laws succeeded in their aim of providing safety and control? Actually, more so than your writer could ever imagine – New York’s alcohol related driving fatality rate is one quarter of California’s.
Moving on, your writer is only guessing when stating that Gov. Paterson’s main interest in changing the liquor laws is budgetary. The Governor has been advised by his own Law Revision Commission that the economic consequences are not understood and the legislature told him last year that the idea was a job killer with potential losses greater than the fees he hoped to attain.
Lastly, your writer claims that the “bill” would “provide consumers more choice”. Not to nitpick, but the Governor has no bill – the notion of allowing big box stores to carry wine is a line item in his proposed budget. Regarding providing consumers more choice, sorry to be the bearer of good news, but, your writer is mistaken - again. New York currently has over twenty-two thousand wines in distribution throughout the state. Compare this, for instance, to Florida, where wine is sold in big box stores, but, less than seven thousand wines are available to consumers.
Besides limiting consumer choice, destroying an entire industry, and, submitting New Yorkers to greater peril on their highways and roads, I think the Governor’s proposal has a bigger problem. Promoting a more than eight fold increase in the number of outlets purveying wine, when the consequences in states with unfettered distribution are well known, leaves the Governor looking like a very poor public policy initiator, indeed. It is an election year, you know.
Ed Wassmer
Proprietor, Young’s Fine Wines & Spirits
Manhasset, New York
We write to clarify points made in the February 4, 2010 Editorial “Some Wine With That?”
You seem to agree with supermarket wine advocates who claim New Yorkers suffer from too few wine outlets.
In truth, New Yorkers already consume more wine by volume than any other state, save one.
New Yorkers love wine and the New York wine industry is growing.
However, supermarkets offer little real value to most New York wineries. We are too small and they are too big to dance gracefully together.
New York wineries grow when consumers ask their local wine merchant to carry New York made wines. We don’t need more outlets. We need greater awareness.
Regular reviews of New York wine in The Times would matter far more than would the incremental growth promised by supermarket lobbyists.
We’ll toast to that!
The Winemakers of Eagle Crest Vineyards
Hemlock Lake, New York
The idea of raising needed revenue by issuing new licenses and expanding the wine trade is sensible, but it should not be accomplished on the back of small businesses.
Many of the provisions of Gov. David A. Paterson’s bill will be detrimental to small operators. When you call opposition to the bill an “utterly cynical defense of the little guy,” I must take umbrage as the proprietor of a family-run wine distributorship. Most of my competitors are also family-run operations, as are most of the wine shops I sell to.
The editorial speaks of my paid lobbyists (I wish) and my monopoly hold on the wine trade (tell that to all my competitors scrambling for a spot on the list at a hot restaurant); this does not connect with the reality of the wine trade in New York today.
Victor Owen Schwartz
New York, Feb. 4, 2010
The writer is president of VOS Selections, a wine importer and distributor.
I like a glass of sauvignon blanc with my dinner as much as the next guy. But in supporting a proposed New York State law to allow the sale of wine in grocery stores, you don’t acknowledge the unintended health consequences of adding about 20,000 retail alcohol outlets to the state’s alcohol distribution system.
Public health research shows that higher densities of retail alcohol outlets are associated with more youth drinking, more problem drinking and more alcohol-related health conditions. In New York City more than 25,000 people are hospitalized and 1,500 people die every year from alcohol-related injuries and illnesses.
Public policies on alcohol should protect the health of the city’s population, not harm it.
Nicholas Freudenberg
New York, Feb. 9, 2010
The writer is a professor of public health at the CUNY School of Public Health, Hunter College.
“Wine in grocery stores has not been addressed herein because we concluded that before any action should be taken a complete and independent analysis of its economic consequences should be undertaken.”Now, considering that this commission is made up of lawyers, people that make their living using words and ideas as tools, I think we can safely assume that they know how to say what's on their mind. Let me break this down to see what it means. My understanding is in red: "We concluded" (after gathering all the pertinent facts from a broad number of industry sources, we came to the realization) "that before any action should be taken" (before the state does anything to revise the laws affecting wine sales in grocery stores) "a complete and independent analysis of its economic consequences should be undertaken." (the state should take a careful, complete and impartial look at who the financial winners and losers of any changes might be.)
''Regrettably, we lacked the time and experience to conduct such a study and the financial resources to engage experts on the subject,'' the report states. ''Our silence on the subject should not be viewed as an endorsement of any particular point of view.''Okay, again, pretty straight forward. Let me translate the above: Although we recommend that a thorough, complete and impartial economic impact study be done before any laws concerning this issue are changed by the state of New York, doing such a study was not our job. It was not the commission we received from the state of New York, which is probably why we didn't have the money and manpower to conduct it. We aren't saying we are for wine in grocery stores or against it. How could we have an opinion until after the study we recommend is actually completed!
'What was the point of having a commission spend all that time and money (they did spend time and money) to produce a report (they did produce a lengthy, 342 page report) if you are just going to ignore it? (see the paragraph below)'' said Saunders in the news release from Jan. 25. ''Rather than follow the recommendations of the commission, the governor clearly followed the wishes of 'Big Box' store lobbyists who are looking to destroy our businesses. That's just wrong.''
This statement [''Regrettably, we lacked the time and experience to conduct such a study and the financial resources to engage experts on the subject,'' the report states. ''Our silence on the subject should not be viewed as an endorsement of any particular point of view."] is contrary to the statement made by Jeff Saunders, founder of the Last Store on Main Street coalition and president of the Retailers Alliance, who stated that the state commission spent time and money to produce a report the governor is supposedly ignoring.How could anyone come to the conclusion that Mr. Saunders' statement is contrary to the statement of the Commission? Is this deductive logic? Is this inductive logic? No, it's Orwellian logic! Right in front of our face Mr. Phillips tells an obvious and blatant lie. There is no way he can support his statement. It is false and corrupt.
"Unfortunately, the grocery stores have flooded the market place with propaganda that has misinformed consumers. Cornell University did an independent study that forecasts that liquor stores sales will lower wine sales by 33%, which is a conservative estimate. I think anyone with common sense can determine that if you lose a third of your sales and your fixed cost of operating your store stay the same, you are going out of business quickly.
Selling potato chips and twinkies will not make up for the sales losses. Governor Patterson and the grocery stores are offering products that liquor stores have no space on the floor to sell, as they need to maintain their rack space for the wine, which now sells at a right of 33% less. Not to mention that nobody is going to buy the twinkies.
In the end, consumers will lose, especially those that prefer spirits over wine. Consumer selection will decline, NYS wine will be removed from the shelves, and the price of Jack Daniels and other liquors will skyrocket. And lets not forget that thousands will lose their jobs because the grocery stores will not hire one additional person.
This debate needs to get past consumer laziness. Why should grocery stores be provided any further unnecessary benefits? Below is a transcript of the damage grocery stores are having on the NYS economy:
http://www.wxxi.org/ntk/Transcripts/2009/0424.html
The investigative report aired on PBS Radio. The claim is that Wegmans received $204 million in taxpayer funded financing with their consideration being job creation. The report from David Cay Johnston determined that Wegmans created one full-time job as a result of the tax break, not living up to their obligations. This behavior is not limited to Wegmans, but everyone taking the free pork under Empire Zones.
More troubling is how the grocery store executives utilize lobbying for personal financial benefit. One of the leaders trying to reign in the “Death Tax” is the Wegmans family. Despite media accounts of banging drums, reports show only 18 families are petition Washington to not have to pay their fair share of taxes. Here’s the report:
http://www.citizen.org/documents/EstateTaxFinal.pdf
Noted special in the report, the Wegman family actually applies the lobbying cost to not have to pay personal taxes to their business. They are one of only two companies doing this. If you put two and two together, that seems to suggest we are paying an extra nickel for bread and milk to pay for the Wegman family’s efforts to not have to pay their fair share of taxes.
So, should we give them more? Absolutely not. The license are a one-time fee and don’t take into account maintenance cost in the long-run not does it take into account the Medicaid and unemployment costs of the people that lose their jobs. There are numerous costs associated with the proposal, it is not a net gain of $100M.
If grocery stores really want the wine, then lets get them to payback the state for also the tax break benefits they’ve unproperly received that have allowed them to price gouge mom-and-pop with lower prices because they elminated a major cost line on the income state…its called taxes.
Wegmans can get it started by extending their commitment to rescind all current tax breaks, cut a check for the $204 million in inappropriate taxpayer abuse and agree to pay their taxes both on their business and personal bank accounts like the rest of us New Yorkers."
Amazing! Sounds like rape and pillage time against all New Yorkers by the privilaged class to me.
