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?
Aug 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."

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