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Liquid Assets:
Wine on Aisle Nine?

First published in the January-February 2010 edition of Edible Manhattan

Comment | December 28, 2009 | By

wine

State supermarkets lobby for a glass half full, but legislators put a cork in it.

If you’ve ever gone to a grocery in, say, California or Louisiana or North Carolina or Florida, and wheeled your cart down the ample aisles sighing and wishing the Empire State allowed supermarkets to stock wine, you’re not alone. I’ve certainly done it, mooning over bottles of brut and Beaujolais, not to mention the diversity of the dairy case, the piles of fresh produce and the cheerful, helpful checkers who make my cramped little Key Food with its cranky, texting cashiers look like a troll’s cave.

So you might have raised a glass a year ago when Governor Paterson, following the lead of many in Albany before him, proposed legislation to allow the sale of wine in our own retail food outlets— delis, supermarkets and the like—as part of his 2010 budget plan. Although his original bill died on the vine by March, the effort to make the change hasn’t, and it could be revived in the coming months.

While it wouldn’t relieve of us of those checkout woes or expand the dairy case at the Met, supporters say the bill would bring in an extra $100 million–plus in revenue to the state, gleaned from licensing fees that an estimated 19,000 shops, big and small, would pay to stock their shelves with vino; certainly a help when the state deficit is at nearly $16 billion. Companies like Wegman’s and Whole Foods are big supporters of the change, partly because they sell lots of wine in other states, and partly, they told us, because they want to be big boosters of local wine. They say extra shelf space for wine would be a boost to New York’s wineries, as they say it was for Oregon and Washington when those states passed similar legislation 20 years ago. Ultimately the customer is always right and wine retailers, be they box stores, boutiques or bodegas, are motivated to sell what customers like to buy. (Hint: if you ask for New York grapes, they will stock it.)

And then there is the biggest carrot for shoppers like us: the convenience of picking up chardonnay and chard in a single purchase. Indeed, many say they’d love to buy wine at the supermarket. I did an informal Facebook poll for the heck of it, posting the question: “Do you think NY grocery stores should be able to sell wine?” Responses were unanimously affirmative, although a few paused to ponder the health of little independent shops in the shadow of big-box stores stocked with reds and whites.

Goodbye, Mom, Pop and great selections?

Many wine store owners fear the change would hit them hard, shuttering as many as 40 percent of independent liquor shops. “It will put 4,500 people out of work in the worst economy in years,” says Michael McKeon, spokesperson for the grassroots anti-winebill group the Last Store on Main Street. “It’s a lot of people and a lot of families, and it’s the wrong thing to do.

Detractors also decry the state’s tax windfall as a short-term gain in exchange for long-term pain. “From a budget perspective, it’s a gimmick. It’s one shot,” says McKeon. “Recurring revenue on an annual basis will be about $3 million a year. When you get past the initial flush of $100 million and look at the loss of business tax and income tax, the cost far exceeds the benefit.”

“I don’t think that a fiscal crisis should be the reason that this is introduced,” echoes Scott Pactor, owner of Appellation Wine & Spirits in Chelsea. “It won’t increase tax revenue. You might get a small bump from it, but it will shift consumers from one purchasing location to another. It will be difficult on small businesses, like the way Wal-Mart and Barnes & Noble and other large retailers have been to small retailers, and will further erode a significant part of the fabric of American life.”

So would wine in aisle nine do to your glass what grocers did decades ago to so many other foodstuffs that were once bought in specialty shops? A generation ago, when supermarkets squeezed out neighborhood bakers and butchers, the quality of everyday baguettes and brisket didn’t exactly skyrocket. What customers gained in convenience, they lost in craft and caliber. And they went from being served by expert shop owners and their longtime staff to unskilled cashiers.

“I don’t think it’s going to be a great thing for the consumer,” says Matthew LaSorsa, the owner of 20-plus-year-old Heights Chateau in Brooklyn Heights. “When you go around the country, most grocery stores that sell wine dumb down the selection, based on national brands and case distribution. So what are we going to be looking at? Kendall-Jackson, BV, Lindemann’s, Yellow Tail, Rosemount—all of these brands that stores like mine don’t even carry,” he says.

“I believe that this whole situation, should it come to pass,” continues LaSorsa, “will diminish the amount of real creativity in the wine business. All these small retailers aren’t going to be able to survive because they’re not going to have the clientele to buy little esoteric wines. One of the greatest ways to keep New York’s creative environment is to keep big-box stores out. Who wants this [wine bill]? Whole Foods wants it. Wegman’s want it. Costco, BJs. Those stores are detrimental to New York’s small business environment. It takes the flavor out of neighborhoods and creates a homogeneity.”

Frank Coleman of the Distilled Spirits Council takes a similar view: “We are opposed to wine only in grocery stores because it will take the foot traffic out of the package stores, which in turn will hurt the retailer and the sale of distilled spirits.”

As for imbibers, some take a capitalistic approach and note that if a wine shop gets put under by a supermarket’s selection, maybe it wasn’t worth keeping. Or, as one Facebook poster put it on the wall of “Wine in NY Grocery Stores! Yes!”—one of several groups formed around the topic:—”If thousands of liquor stores will go out of business because of this bill, then there are too many liquor stores…. If enough people care about the service and expertise that they get from the liquor store employees, then they will still be OK. Since they won’t, it means that the market is too saturated with them. Simple supply and demand.”

Others bring up beer: bodegas and standard supermarkets sell Coors and Budweiser and Miller. But if you like good, small-batch suds, you don’t buy Bud just because it’s offered near the chips; you make a trip to stores that stock scores of quality brew, whether it’s a well-stocked deli, the Whole Foods Bowery craft beer annex (which Michael Sinatra, a spokesperson for Whole Foods, says was built with wine in mind when the chain was banking on the bill), or a bottle mecca like New Beer Distributors on Chrystie Street. Why would wine be any different?

“They almost have a monopoly right now,” wine blogger Lenn Thompson of Lenndevours.com says of liquor stores, “and they are out of line to expect that they’ll never have competition. Shops that let suppliers dictate what they sell—junk wines for the most part—will lose in a head-to-head battle with grocery stores selling those same wines.”

But the way New Yorkers buy beer might prove Scott Pactor’s point. Despite an increase in craft beer sales, Gotham is home to very, very few shops specializing in great brews, perhaps because so many supermarkets and delis offer a solid selection.

The Big Guys Make Their Case: More Local Wines

By summer Joseph Morelle, an assemblyman from Rochester, reintroduced the idea yet again, saying the current 2,500 retail wine outlets in the entire state don’t meet the drinking needs of our 19 million residents. To assuage liquor store owners’ fears, he included legislative language that would allow them to sell directly to restaurants and bars within 1,000 feet and to carry some items grocery stores stock, like cheese and crackers.

Jim English, general manager of the 20-year-old shop Columbus Wine & Spirits on the Upper West Side, was not won over. “We’re not allowed to do so many things,” he said, bemoaning the sundry restrictions under which he operates. “We can’t even sell gift bags anymore!” Indeed, a state ban passed a year and a half ago prohibits the for-purchase bags because they’re not considered directly related to alcoholic consumption.

Morelle’s attempt also bit the dust. But Wegman’s and Whole Foods remain active in Albany, lobbying legislators on how the change could bring dollars to both state coffers and upstate wineries. Jennifer Karlson, who is lobbying on behalf of Whole Foods, points to the fact that New York was the country’s second largest wine producer, bested only by California, until Washington State allowed wine in food stores, bringing about a dramatic spike in wine sales. “Since then,” she wrote in an e-mail, “their wine industry rate has dwarfed New York’s.” Washington State now boasts over 600 wineries, compared to New York’s 250.

(Rory Callahan, president of Wine & Food Associates, a NYCbased wine market development firm that has been helping wineproducing countries and regions market to the United States for more than 20 years, cites other factors—namely that Washington State’s oldest and best-known winery, Chateau Ste. Michelle, was purchased by United States Tobacco Company in 1974, tapping that company’s enormous marketing expertise.)

Meanwhile, food retailers have found a way to offer almost-onestop shopping: Trader Joe’s near Union Square was the first to get around the no-wine-in-grocery-store law by opening a separate, unattached wine shop next door and Whole Foods arranged a similar setup. Their first attempt at Columbus Circle was shut down by the State Liquor Authority for, apparently, not being separate enough, but last fall they opened a wine annex adjacent to their newest mega-mecca on 97th and Columbus. “Wine at Whole Foods Market” is just one block from Columbus Wines & Spirits, but the natural foods super-chain says they’re not quashing anybody.

“Our goal isn’t to come in and steal all the sales in the neighborhood,” says Sinatra. “We sought out relationships with local wine and spirits shops, such as Columbus Wine & Spirits—we even advertise some of their natural/organic spirits at the register of our store. Additionally, we have offered cheese and crackers for them to use at their sampling events.” The new Whole Foods wine shop also has a large, well-lit, right-up-front section of local bottles, heartening for any locavore to see. “One thing you will notice right off the bat is our emphasis on local wines,” says Sinatra proudly. “We feature more than 50 varieties from New York. The sale of local wine in grocery stores can have a great benefit for New York State wineries.”

English confirmed that Whole Foods has been a good neighbor so far, adding that the big new kid on the block, and the bill overall, is less of a threat to his specialty store—which concentrates on organic and green-minded spirits and wines—than to ordinary liquor stores carrying little more than Carlo Rossi and Santa Margarita, the mainstream, everyday selections, which most supermarkets would likely trade in, too.

And while supporters hope additional outlets will channel dollars to upstate wineries, detractors fear the opposite: “It will really hurt the guys out on the island and upstate,” says English. He doubts large-scale supermarkets will stock Finger Lakes riesling and Long Island merlot when they can move cheaper bottles with more recognizable names—or the selling power of Trader Joe’s infamous Two-Buck Chuck.

For their part, supermarkets lobbying for the additional revenue vow they’ll stock Empire State bottles, but Thompson, whose popular “New York Cork Report” covers all things New York wine, is skeptical. “[Local] wineries shouldn’t assume that they are going to be able to get their wines into these grocery stores. Some believe that [additional] new retail outlets are a positive. But will grocery stores actually stock and sell New York wines? Or will they stock mass-produced, mediocre-at-best wines? The term ‘grocery store wine’ exists for a reason.” The average, budgetconscious, one-stop shopper doesn’t want to think that hard about a wine’s inherent complexity or lack thereof.

And despite the special signage, even Wine at Whole Foods was light on Long Island wines, which made me wonder whether that’s just the shop working out the kinks or the symptom of a large chain store that can’t quite get its big arms around a small wine region of boutique producers. When asked, the woman working the counter told me that, yes indeed, they planned to stock more Long Island wineries and that in fact the next day she was to lead a tasting of five producers from the area. Which ones? She wasn’t sure.

State vintners, meanwhile, are split. Some say they’re afraid to comment, fearing retribution from small shops, or from the large supermarkets if the bill does come back to the fore and pass. Some, like Scott Osborn, owner of Fox Run Vineyards in the Finger Lakes and president of the NY Wine Industry Association, have been very vocal in their support.

Others agree with Lisa Donneson, a former Wall Streeter who now owns the new North Fork winery Bouké and who sees the bill as a threat to the small stores that market her wines. “I appreciate the support and hand-selling of boutique wines at retail stores that specialize in wine and spirits,” she says. “I cannot compete on price against large-volume wine producers at grocery stores.”

Indeed William Ouweleen of Eagle Creek Vineyards, up in the Finger Lakes, met with Governor Paterson last spring saying he represented over 100 wineries in opposition to the bill. In a subsequent letter to the governor, he wrote that the bill would shutter the small wine stores that hand-sell local bottles, and that Empire State wineries wouldn’t “stand a chance” in big-box stores, which “push their most profitable products and undercut small producers …. In other states, supermarkets focus on bulk wine and national brands.” As to the bill’s future, Morelle’s office says it is still very much alive. “It remains active through next year,” says his staffer Derek Murphy. “We’ll continue meeting with people who are still interested and have a stake in and are impacted by it. The object is to keep the dialogue going so the outcome is as satisfying and beneficial to as many people as possible, and so all vendors in some way are advanced by it.” In the meantime, if there’s a small city liquor shop you really love, you might want to shop there more often … and maybe take a picture, just in case.

Amy Zavatto is in a constant battle between the velvety lure of convenience and the inherent convictions born of being the youngest daughter of an independent store owner who raised four children on the income of a wee butcher shop in a wee town. She writes about wine and food.

About Amy Zavatto

As Deputy Editor of Edible Brooklyn and Edible Manhattan, Amy gets to scour the city for all that is quenching and satiating in NYC. The daughter of an old school Italian butcher, she holds her Level III Certification in Wine and Spirits from the WSET, and contributes to Imbibe, Details, More, Foxnews.com, Wynn, and is the author of The Architecture of the Cocktail, The Complete Idiot’s Guide to Bartending, The Hedonist Guide to Eat NY, and co-author of The Renaissance Guide to Wine & Food Pairing with Tony DiDio. She's stomped around vineyards from the Finger Lakes to the Loire Valley and toured distilleries everywhere from Kentucky to Jalisco to the Highlands of Scotland.

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