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New York States of Mind: Winery Owner Challenges Grocery Wine Sales

Paumanok owner Charles Massoud questions the motives of New York Gov. David Paterson's proposal to sell wine in supermarkets

Ben O'Donnell
Posted: February 25, 2010

Wine Spectator spoke with two prominent New York vintners on the controversial subject of grocery store wine sales. See Scott Osborn of Fox Run Vineyards' Q&A for the opposing point of view.

Charles Massoud founded Paumanok Vineyards in 1983 and runs it with his wife, Ursula, and their three children. A standout vintner of Long Island wines, Massoud was critical of Gov. David Paterson’s 2009 budgetary proposal to allow the sale of wine in grocery stores, viewing it as an attempt to raise government funds at the expense of small business owners. The retooled 2010 measure affords liquor store owners new opportunities to expand their franchise locations and sell beer and food. Massoud discusses a legislative effort he finds improved but still marred by bureaucratic callousness.

The grocery store wine sales initiative is once again on the budgetary docket in the Empire State, and this time the proposal includes concessions to liquor store owners who fear losing a share of the wine market. Between franchise fees and wine tax revenues, the state is expected to make $300 million in the next two years alone from this measure, if passed.

Q: Can you articulate a few of your hesitations about the governor’s proposal?
A: Basically, I would like to see wine sold everywhere. If I can get wine sold at the barbershop, that would be wonderful. But the reality is that the state, as long as I can remember, has had a very restrictive policy not allowing wine and liquor stores to sell anything other than liquor and wine. And all of the sudden, the state, because it needs money badly, is trying to find a way to raise revenue. I don’t think they’re doing it in a way that is fair to the wine stores. All of the sudden you are giving the grocery stores freedoms beyond anything that the wine stores have had. They can carry multiple licenses. They can aggregate sales, they can better compete. The bill that we have this year is better than last year’s. But still, my idea would be to give the wine stores a two or three year hurdle, whereby little by little they begin to open [the field of competition] up. You don’t become an expert at selling olive oil and cheese and bread in your wine stores overnight. I think the best way to organize this kind of conversation is to have a dialogue, set a deadline, and then say, “OK, we’re going to do it step-by-step to allow you guys to ready yourselves to compete, and we’re going to help you, by the way. Here’s a tax credit for this, that, and the other thing.” Not every wine store owner is a crook, as people would lead you to believe. Some of them are very decent people, and they’ve worked very hard to build businesses over time. And I don’t know why we would be sacrificing mom-and-pop organizations in that manner, helping big corporations, without giving a lending hand. That’s my position. It’s more a philosophical issue with how government is run out of Albany.

Q: Do you think the liquor stores are more willing to carry New York wines than grocery stores would be, or more willing to support small, local producers?
A: The percentage of our wines that are sold through wine stores accounts for about 25 percent of our sales. So we have quite a good relationship with the wine stores. But that’s not the reason I’m saying we need to try to help protect them. I’m thinking about myself. I think down the road, we take turns at who is going to be the target for the next legislation. If we don’t stand up with one another, the day when it’s our turn, who is going to help us lobby for what is correct? Dialogue would be useful. Invite the trade to jointly hammer out a compromise that would be useful for everybody. The idea of dialoguing is very well accepted in this country, but the state just wants money.

Q: Do you think this proposal would help New York wineries?
A: What I don’t know about this whole situation is, do you get people to drink more wine because it is sold in more places, or do you redistribute? If you have toothpaste at the barbershop as well as shampoo, are people going to use more toothpaste? That’s the unknown to me. But I’m going to guess that the state is so desperate to get funding that there is a good chance that these extreme measures will pass this year.

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madison, ms madison —  February 27, 2010 9:13pm ET
In MS we are regulated so that wine and liquor are sold in our store, and beer and food products are sold in grocery stores. I too would have great difficulty in seeing wine sold in grocery stores. The loss of revenue to our already low-margin industry would put small, family-owned stores out of business. Allowing wine sales in other stores would not increase the amount of wine sold every year, it would further spread out wine sales around the state.

I hope that the small mom-and-pop stores in NY can find a better source of income that doesn't hurt the little guy.
Jeff Biehler
Buffalo, New York —  April 6, 2010 10:38pm ET
re;The retooled 2010 measure affords liquor store owners new opportunities to expand their franchise locations and sell beer and food. Massoud discusses a legislative effort he finds improved but still marred by bureaucratic callousness.-
That is not true- the retailers will not be allowed to sell beer!

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