In a landmark decision the latest State of New York budget does not allow for grocery stores and supermarkets. The Albany agreement eliminated a proposal to allow the sale of wine in supermarkets and other stores, a measure intended to help close the mounting state deficit. Shiv Singh reports from New York on what this means for consumers. Pictured is a petition hanging in the window of a NY wine store. Click on the image to view it enlarged.
Not surprisingly, independent liquor and wine store owners applauded the move. They feel that this will prevent the closure of approximately 1,000 independent liquor stores across the state. However, the supporters of the proposal believe that the revenue deficit will result in layoffs in the state government to the tune of 4,000 employees. As Wine Spectator reported, the state government has a budget deficit of $16 billion dollars and the proposal would have brought in $160 million in additional licensing and excise fees over a two year period. New York is one of 15 states in the US that does not allow for the sale of liquor in grocery stores and supermarkets. Instead the budget will raise excise taxes on wine from 19 cents a gallon to 30 cents a gallon, or about 6 cents a bottle.
As a person who spends a lot of time in New York, I have mixed feelings about the decision as you may have noticed in my last article on the subject. On the one hand, I applaud it – independent wine stores need some protection and I have my favorites that I’ll always go to. But on the other hand, more points of sale for wines only helps with the consumption and the appreciation of wine.
But all in all, the fact remains that once supermarkets begin to sell wines, increased commoditization sets in costing not just independent liquor stores but also smaller wineries. As has happened in the UK, the smaller wineries have difficulty competing for shelf space against larger players (supermarkets only like to buy from wineries that can meet their volume demands) and therefore lose out from a brand awareness perspective not to mention the loss in sales. It hurts them a lot.
This was a positive decision but the independent wine stores must continuously work to educate and inform their customers about wine through tastings, superior customer service and thoughtful selections. That’s an important part of the purchasing experience and without that, these independent wine stores won’t deserve the protection that they are getting.
This decision doesn’t mean anything for the Indian wine market directly but it does go to show that various forms of protectionism whether it be at the retail or the distribution level are always at play in any country. In our case with so little awareness about wine, any distribution channel is a good one as long as it provides a good selection, appropriate storage conditions, positive customer experiences and educates the consumer too . At least for now.