Log In / Join Now

New York Alcohol Authorities Order New Jersey's Wine Library to Stay Out of Their State

State Liquor Authority sends cease-and-desist letter to prominent retailer; sign of an organized crackdown on retailer shipping?

Robert Taylor
Posted: August 23, 2013

New York State's alcohol regulators have told the Wine Library to stop sending wine to New York customers. Earlier this month, the State Liquor Authority (NYSLA) issued a cease-and-desist letter to the prominent New Jersey wine store and national retailer, directing it to immediately stop selling and shipping alcoholic beverages into New York state.

New York prohibits the direct shipment of wine to residents by out-of-state retailers, but the NYSLA has long turned a blind eye to the practice, with retailers like Wine Library taking full advantage. "For a long time they just looked the other way," said Michael Correra, executive director of the Metropolitan Package Store Association, an organization that represents the downstate New York retail beverage industry, primarily brick-and-mortar operations. "I applaud the chairman of the SLA for grabbing the biggest retailer in the state of New Jersey and telling them they shouldn't be breaking the law."

Not all New York retailers agree with the decision, however. Daniel Posner, owner of White Plains, N.Y.-based Grapes the Wine Co. and president of the National Association of Wine Retailers, sees the cease-and-desist letter as the next step in a decade-long erosion of retailer shipping rights that has hurt consumer choice as much as it has retailers. "Ever since Granholm in 2005, it's become more and more difficult for wine retailers to ship across state lines," Posner said, referring to the Supreme Court decision that struck down barriers to direct sales by wineries. "For a major wine state to send out a cease-and-desist to a retailer 30 miles from midtown Manhattan obviously is trying to make a point. It's definitely a power play of wholesalers and old-guard retailers of New York state against the quote-unquote up-and-comers."

Posner suggested that New York wholesalers influenced the NYSLA's decision to act now. "The two largest wholesalers in New York are not wholesalers in the state of New Jersey, so they have no vested interest to make any retailer in New Jersey happy. They're protecting their interests in the state."

NYSLA counsel Jacqueline Flug, who signed the letter, did not return calls for comment. David Bregenzer, counsel to the director of the New Jersey Division of Alcoholic Beverage Control, was copied on the letter. Bregenzer did not respond to requests for comment, but his inclusion may confirm a theory of Correra's, however. "Since [NYSLA chairman Dennis Rosen] doesn't have jurisdiction over New Jersey liquor stores, he apparently got the New Jersey [ABC] to work with him on this," Correra said.

Wine Library vice president Brandon Warnke was unavailable for comment, but the NYSLA's letter is already making waves among the online wine retailer community. Online retailer Wine.Woot has changed its policy this week and is no longer shipping wine to New York. "Wine Library is a member of the National Association of Wine Retailers, so it's a concern for us. I'm concerned for our own store. I'm concerned for wine consumers in this country. This is not the direction we should be heading," Posner said. "We want to be opening up doors, not closing them."

Posner hopes that the move will increase membership in the new American Wine Consumer Coalition. "The ultimate loser is going to be the wine consumers of New York. That's the bottom line, and consumers aren't aware," Posner said. "We need to do something about this before it's too late."

Ted Hudgins
Naples, FL —  August 26, 2013 12:33pm ET
I wonder if New York would change their position if the same sales tax was collected and remitted. If it's revenue neutral, what would be the State's justification in denying its citizens access to the wine from out of state retailers. Obviously they cannot come right out and say its to protect their in-state retailers or to protect wholesalers who charge more for the same item in NY.
Daniel Posner
White Plains, NY, USA —  August 26, 2013 3:15pm ET
Ted

Sales tax is certainly not the issue. If it were, states would adopt the New Hampshire method. Charge 8% and an annual fee to the retailers. NH charges $500 annually plus the 8% tax.

New York could probably charge $5000 annually and 8%. How much "tax benefit" would the state see? Millions!
Daniel Ross
Cleveland, Ohio —  August 26, 2013 5:08pm ET
It's political corruption!
Michael Brill
San Francisco, CA —  August 28, 2013 10:52pm ET
I'm really scratching my head as this is a two-way street. Over 30% of wine industry growth is coming from online and some retailers are seeing all of their growth online. Assumedly states will retaliate and NY retailers will be prohibited from shipping to states banned by NYSLA. This significantly weakens NY retailers especially as the industry sees consolidation that will inevitably occur from growing online access. So instead of enabling some of its best retailers to have a shot at becoming significant entities in a national wine marketplace, it ensures that they'll be stuck in cottage industry mode.

Although I disagree, I get why distributors fight against winery direct shipping, but I haven't a clue why they would fight against retailers as they're shooting themselves in the foot.
Michael Brill
San Francisco, CA —  August 30, 2013 7:17pm ET
I'm really scratching my head as this is a two-way street. Over 30% of wine industry growth is coming from online and some retailers are seeing all of their growth online. Assumedly states will retaliate and NY retailers will be prohibited from shipping to states banned by NYSLA. This significantly weakens NY retailers especially as the industry sees consolidation that will inevitably occur from growing online access. So instead of enabling some of its best retailers to have a shot at becoming significant entities in a national wine marketplace, it ensures that they'll be stuck in cottage industry mode.

Although I disagree, I get why distributors fight against winery direct shipping, but I haven't a clue why they would fight against retailers as they're shooting themselves in the foot.
David Crowther
Tuscaloosa, AL USA —  September 2, 2013 1:57pm ET
The bottom line is we are supposed to be free citizens. It is none of the governments damn business where we buy wine from. I wish we as consumers and free citizens could make enough stink to get the government out of our business. It is corrupt and evil and against every pricipal our society is founded on.
D R Hunter
Nanuet, NY —  September 4, 2013 11:45pm ET
I had no idea it was illegal to ship from out of state into NY, I've had many retailers do it for quite some time. I moved here about six and a half years ago from Washington State, and you'd think that Prohibition had just ended a decade ago around here. Hard to believe that NY was one of the original thirteen colonies fighting for 'freedom'.
Donald Walker
Los Angeles, CA —  September 9, 2013 2:58pm ET
Its quite simple actually and Michael Correra highlighted it. (He is a rep for retain liquor stores in New York). This is all about protecting local liquor stores from competition at the expense of consumers. Its corruption and you know there was plenty of lobbying and contributions to lawmakers and appointees by vested interests to get this done.
Steven Cohan
Los Angeles —  September 13, 2013 10:07am ET
Well I'm not up on the NY State laws but apparently some residents aren't either but regardless, as Donald Walker said if its about protecting the brick and mortar shops I do understand that to a certain extent. But what's next, is the state going to say you can't buy products from Amazon and shipped into NY?! Also, as Michael Brill points out if other states join on a tit for tat approach this will then be shooting their retailers in the foot (or head even). It was good to hear from Daniel Posner and his opinion and would be interested in seeing other NY retailers views on this....
Tom Blair
Little Silver, NJ —  October 7, 2013 8:55pm ET
I live in NJ and have often purchased from Zachy's as well as Wine Library . . . Both have great deals and often different strengths. It would be sub-optimal if we lost Zachy's as an option.

Would you like to comment? Want to join or start a discussion?

Become a WineSpectator.com member and you can!
To protect the quality of our conversations, only members may submit comments. Member benefits include access to more than 315,000 reviews in our Wine Ratings Search; a first look at ratings in our Insider, Advance and Tasting Highlights; Value Wines; the Personal Wine List/My Cellar tool, hundreds of wine-friendly recipes and more.

WineRatings+ app: Download now for 340,000+ ratings.