GROWTH ON THE VINE

By WBNG News

Story Created: Jan 29, 2010 at 5:11 PM EST

Story Updated: Jan 29, 2010 at 6:11 PM EST

Romulus, NY (WBNG Binghamton) A foreign tariff is drying up sales in New York's wine country.

Action News reporter Reed Buterbaugh explains how a steep tax is preventing local wineries from cashing in from Canadian clientele.
The quality of New York's wine continues to improve.
Wine makers have adjusted their crops to meet the colder climate.
"Generally a cooler growing season, longer, slower ripening that's good for flavor enhancement on certain fruity, white varieties," said Shawn Kline, Vineyard Manager for Thirsty Owl.
Tourism is booming as Upstate New York is building a reputation as the premier wine source in the Northeast.
"The Finger Lakes is a wine destination. It's been growing every year significantly," said Cameron Hosmer, Owner of Hosmer Winery.
Wineries like the Hosmer in Romulus are hampered. Despite the fact they're close to so many metropolitan areas, New York, Philadelphia and Boston. They're losing out on the markets of Toronto and Greater Ontario.
"So they're pretty much saddled to buying three bottles of wine and that's about it," said Hosmer. "Otherwise the tariff is just prohibitive."
"So if you buy a twenty dollar bottle of wine let's say in Schuyler County and you drive back to Canada," said (D) Senator Charles Schumer. "They'll charge you another twenty dollars as a tariff."
The Senator is putting pressure on the Canadian government to repeal the tax. Saying the duty on American wines is illegal. Because it violates the North American Free Trade Agreement.

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Keep wine out of grocery stores

First published in print: Saturday, January 30, 2010

The Jan. 22 story, "Wine sales plan aims to ease liquor store worries," might as well have been a press release for the big box stores that are looking to destroy small businesses across New York.

The so-called perks for liquor stores that would accompany the sale of wine in grocery stores, detailed in the story, are of little value to a store that is going out of business.
Small, mom-and-pop wine stores will be out of business overnight if Gov. David Paterson's job-killing plan is adopted. How many stores do you know that could sustain up to a 32 percent cut in income, as a Cornell University study projected would happen to wine sales income for liquor stores if grocery store sales were allowed?

The governor can promise store owners anything he wants because he knows that these phony perks are little more than public relations cover for helping big box stores put us out of business, just like the butcher, the baker and many other small businesses. He can't fool store owners, and we know the state Legislature will reject this bad idea again.

STEFAN KALOGRIDIS

President

NYS Liquor Store Association

Albany

http://www.nyslsa.com



Read more: http://www.timesunion.com/AspStories/story.asp?storyID=895075&category=opinion#ixzz0e6WRGS13

California wine sales drop

By Kevin McCallum
THE PRESS DEMOCRAT

Published: Wednesday, January 27, 2010 at 2:51 p.m.
Last Modified: Wednesday, January 27, 2010 at 7:25 p.m.
SACRAMENTO — California wine shipments dropped in 2009 for the first time in 16 years as major U.S. wine companies looked overseas for the cheap wines that cash-strapped consumers increasingly crave.

Overall wine consumption in the U.S. rose 2.1 percent last year to 323 million cases, a positive trend that bodes well for the industry long-term.

But California wines lost ground as sales fell 1.6 percent to 236 million cases, a drop of 4 million cases, according to widely-watched figures issued Wednesday by Woodside wine industry analyst Jon Fredrikson.

“It was ugly,” Fredrikson told wine industry leaders gathered in Sacramento for the annual Unified Wine & Grape Symposium, the nation's largest wine industry trade show. “Many people I have talked to said it was the worst year in their history.”

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My thoughts on the "wine industry and liquor store revitalization act"

 By Joseph J. Pecoraro

Assembly bill A8632 (Morelle) should be called the “Farm Winery and Liquor Store Destruction Act,” or the ‘Big Box Store Sweetheart Act,” and in no way should it be seen as a "wine industry and liquor store revitalization act.” As I read through the torturous legalese of this Trojan Horse piece of legislation it is interesting to note that most of the changes proposed in this bill are designed to protect the special interests of the big box grocery stores. For example, a proposed change to allow under 18 year old employees is okay for grocery stores but not for liquor stores. Why is that? How does that revitalize liquor stores? It doesn't. It is a favor to the supermarkets that already have underage employees stocking shelves, delivering packages to cars and running check-outs.

Hours of sale will be extended to allow wine sales hours to mirror the current time for beer sales. Can you imagine the problem it would be for a grocery store to be able to sell beer until 2 am, but have to stop selling wine at 9 pm? This is just a favor to the supermarkets that are already open 24/7, and has nothing to do with revitalizing liquor stores.

Wine sales in grocery stores is a contentious budget fix

In a Cornell University study conducted by Bradley Rickard, assistant professor of applied economics and management at Cornell, a model was created that assessed the likely impact of introducing wine into grocery stores. Twenty-one simulation experiments were conducted and found that liquor stores stand to lose 17-32 percent of their business. Also, out-of state wineries would benefit from the bill and in most cases in-state wineries would gain revenue as well.

"Most of the arguments I make … support this bill," said Rickard. But, "I can't throw all my support behind it," because of the issue that liquor stores are going to lose revenue from wine sales. Rickard also said he would like to do more research about what the new provisions would do to help liquor stores. "I'm interested in trying to quantify the benefits of the provisions in the current bill," Rickard said. "I'm also curious about other provisions that aren't in the current bill."

But the issue is sure to be as contentious as it was last spring before the bill died.

"Sales are down dramatically. People are not buying wine and liquor. On top of that asking [liquor stores] to take a 30 percent pay cut is going to have a devastating impact," said Michal McKeon, a spokesman for the Last Store on Main Street, a coalition of small business owners.

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Calhoun to governor: Cork the supermarket wine sales proposal

Governor Paterson should rescind his proposal to allow wine sales in over 19,000 new outlets including gas stations and grocery stores.

During the public forum I sponsored with the new chairman of the New York State Liquor Authority this past November, numerous business owners spoke of what a threat increased wine sales in grocery stores is to them and how it would certainly put them out of business. The amount of money brought in to the state through this proposal would not be nearly enough to offset the devastation that would occur to thousands of small business owners and their families.

In addition to the harm the proposal would have on small businesses, it would affect the ability of the Liquor Authority to adequately balance the needs of wine and liquor stores with the enforcement obligations the authority has to the state at large. There are currently only 38 inspectors regulating 70,000 license holders, a number which will increase exponentially if more licenses are given out to new wine sellers.

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PATTERSON’S WAR ON SMALL BUSINESS

January 24, 2010 ·

In Governor Patterson’s latest budget proposal, he again is declaring war against small businesses, namely liquor stores. He wants to allow grocery stores to sell wine. Below is a re-print of my NCN column “In My Opinion” I wrote February 11, 2009 titled “ Last call for alcohol” on this topic, which like Dracula will not die.
Here is what I said back then:


IN MY OPINION: Last call for alcohol

By Anthony Bazzo

It has been reported that unemployment in New York State could reach ten percent by the end of the year. Tucked into Governor Patterson’s proposed budget is an item that will help New York reach that figure. That item is to allow the states 19,000 grocery stores and delis to sell wine in an effort for the state to get an estimated 100 million dollars in new license’s fees. This will, in my opinion put the majority of the 2,759 independent licensed liquor store owners and their employees on the unemployment line. This will also make the person who stocks the cheerios your wine merchant. Once you let the state take this step, and liquor stores start closing, there will be no stopping them from letting delis and grocery stores from selling hard liquor. This is one slippery slope we should not go down.

There is a reason why liquor and wine were singled out after prohibition to be sold only in stores that sell only those items. It was to control bootlegging, tax collection, and sales to minors. Those concerns were valid then and still valid now. The State liquor Authority(SLA) already has their hands full in monitoring sales and compliance to laws and regulations of the 2,759 licensed stores now. What are they going to do with another 19,000? Are we now to increase the public payroll to handle this increased work load? Believe me there is no more regulated industry in New York than the liquor industry. This measure, should it pass will increase the number of minors getting their hands on wine and increase DWI’s. Unless this is the governor’s idea of curbing global warming by getting more cars off the road through confiscation.

Brooklyn Assemblyman Slams Proposal To Sell Wine in Grocery Stores, Gas Stations

by Brooklyn Eagle (edit@brooklyneagle.net), published online 01-22-2010



BROOKLYN — Assemblyman Steven Cymbrowitz (D-Brooklyn) has termed Governor Paterson’s proposal, part of Monday’s budget message to the Legislature, “a dangerous scheme to raise money at the expense of the wellbeing of New Yorkers. While the initial sale of new wine merchant licenses will realize millions of dollars for the State, it is a one-time revenue raiser that puts our state’s residents at peril for decades to come.
Cymbrowitz was referring to the governor, once again including a plan to allow grocery stores, gas stations, bodegas, mini-marts and corner delis to sell wine, as part of his budget balancing strategy.

“By proposing a plan to legalize wine sales in 19,0000 new outlets, Governor Paterson has once again made a terrible mistake that will only increase underage drinking, lead to more drunk driving, and hurt small businesses across New York State. There is no question that New Yorkers will be put in danger with this misguided attempt to bring in more revenue. Currently the State Liquor Authority has only 38 inspectors regulating 70,000 license holders. Increasing the inspection team’s workload by almost one-third is a recipe for disaster.

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Helping N.Y. farmers, hurting liquor store owners

Messenger Post

Posted Jan 07, 2010 @ 10:30 AM

A proposal to allow the sale of wine in grocery stores and other retail outlets is attractive at first blush. An extra revenue stream for supermarkets, extra convenience for shoppers and extra money for the state, as businesses would have to pay an additional fee to stock wines. And the wine industry — including vintners just south of Monroe County in the Finger Lakes — would benefit from the added availability of its products.

Everybody benefits, right? Well, not exactly.

Left out in the cold would be the primary folks who now sell wine in New York: liquor store operators.

Numbers don’t lie. There are about 2,400 liquor stores in New York. Their owners estimate wine sales make up between 60 and 75 percent of their profits. They would have trouble competing with the broadened availability of their signature product among an estimated 19,000 retailers in the state — the number that would be eligible to sell wine under the proposal.

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The truth about consumer choice, market access and big box retailers.

Here is an interesting article that talks about how consumer choice and market access is being severely limited by 'big box stores' and the concentration of supply sources. You need to read the entire article to understand this quote in context, but the bottom line is simply this: If New York's wineries think that opening up wine sales to grocery stores and the big-box retailers will help them, they better think again. It is self-delusion to think that relatively tiny New York wineries will buck the trend of all the other product classes sold by the big chains. I don't care what Wegman's says about promoting New York state wineries, in the long run (ten to twenty years) a move to grocery chains will result in a death sentence of third class status on the shelves of the real tonnage retailers.

New York producers will be left with ONLY the small bodegas and convenience stores and will be saddled with a crippling high cost of marketing to these thousands of small volume retail outlets. The real retail wine markets will be forever closed to them by the big, concentrated global suppliers (Constellation, Gallo, Foster's), and the powerful national market dominating and controlling retailers, (Wal-Mart, Costco, 7-Eleven, etc). This is not because these players are inherently evil, it's just the way of the world.

The best strategy for New York's wineries is a to forge a stronger alliance with local wholesalers to keep marketing costs down to achieve efficient market penetration, and continue to partner with NY liquor store retailers that have a vested interest in helping them grow. They must also look to broaden their market to a larger, multi-state region. There are huge population centers very close to us, (NYC, Boston, Philadelphia, Washington, Chicago) that need to be tapped. But they must recognize that the boom years of wine growth are over. Market shares of California and Washington state are firmly entrenched and will not easily be changed now. New York missed it's chance by not embracing the national market decades ago. Throwing liquor stores under the bus now will not make up for that lost opportunity. It will simply exacerbate their ability to compete in today's market. Why they can't understand that simply amazes me.

Please, pass this information on to your New York winery friends. They need to understand the truth about wine in grocery stores, and they need to know that New York's liquor stores are their best partner for continued growth within New York state. As far as capturing market share in those huge nearby population centers? That will take some hard work and some innovative marketing techniques, but I am sure it can be accomplished.