Our famously dysfunctional State Legislature rarely finds the time to come up with original laws that would do something good for the people of New York State.
However, with ludicrous regularity, various members of the Senate and Assembly find the ability to come up with something they want to ram through to help special interests — read that as those who financially support them — at the expense of everyone else.
The latest example is the resurfacing of a moronic bit of legislation (the “At Rest” act, labeled S 3849 – 2013 in the Senate and A 5125 – 2013 in the Assembly) that would require all wines and spirits coming into the state be stored for at least 24 hours in a warehouse in New York before being shipped out. Most wine coming into the state now is stored in New Jersey warehouses. Under current law a licensed wholesaler of wine or distilled spirits can distribute to any licensed retailer even if such shipment is coming from a warehouse located in another state.
New York storage would require the creation of warehouses that do not currently exist. Nearly 80% of the 235 New York-licensed wine and spirits wholesalers now operate from New Jersey warehouses. Thus, the impact would be immense because they would be compelled to own, lease or rent space in New York.
Virtually every wine merchant and restaurateur is howling in unison that passage of such a farce would add to the price of a bottle of wine which, of course, would either be absorbed by already-low-profit-margin sellers or passed along in part or in whole to consumers.
The only people who would benefit would be the largest wholesalers — Empire Merchants LLC of Brooklyn and Southern Wine & Spirits of New York which is based on Long Island — who can live with a slight increase in storage costs while waiting for the smaller ones to die out. The smaller ones — you know, those that handle more specialty wines — usually imported to the U.S. via Jersey ports.
Tom Wark, executive director of the American Wine Consumer Coalition, has condemned the proposal.
“If the huge, politically-connected liquor middlemen in New York get their way and convince New York lawmakers to support Senate Bill 3849, it will be wine consumers who suffer as a result of increased prices for wine as well as a diminished selection of fine wine on store shelves and in restaurants. However, the liquor distributors pushing the bill will reap millions of dollars in benefits.
“This effort to game New York’s wine distribution system to the advantage of just two large liquor distributors is wholly condemned by the American Wine Consumer Coalition, its New York members and New York lawmakers are urged to reject this harmful, anti-consumer legislation.”
(The Coalition is a member-funded consumer advocacy group with headquarters in Washington, DC.)
Klein’s spokesperson, Eric Soufer, says his boss’s “priority is creating good-paying jobs in New York.” He claims, with a straight face, the measure would not raise the price of wine in New York.
I’d like to include comments from Empire, Southern and Governor Andrew Cuomo, but none of them have made any public comments. Cuomo reportedly is awaiting the results of an economic study even though proposals such as the current one have been made before and died. However, the campaign contributions continue, and the support of Klein, co-leader of the Senate, gives it stronger momentum this time around.
Here’s a sampling of comments from people whose businesses would be affected:
Dominick Purnomo, wine director/co-owner, Yono’s and dp: An American Brasserie, Albany: “The reason the wines are warehoused in New Jersey is because all of the ports are located there. If they were to then truck the wines into New York for storage, that would raise prices at every level.”
Vic Christopher, co-owner of the Charles F. Lucas Confectionery & Wine Bar, Troy: “This is not about creating more warehouse jobs in New York City. It’s about the mega-distributors trying to create a monopoly for themselves by squeezing out their smaller competitors. Our business is based on natural and hand-made wines. The passing of this law will adversely impact hundreds of New York retail shops and restaurants like ours.”
Kevin Everleth, chef/owner of The Wine Bar and Bistro, Albany: The “strong-arm tactic by big corporations to enhance their profile at the expense of small business” is “unacceptable. Period.”
Joe Armstrong, wine consultant at Winebow Importing, Montvale, NJ: “Two big companies are trying to use the government to eliminate their competition, resulting in the loss of jobs in thousands of wineries.”
Shannon Coursey, NYS regional manager for Vineyard Brands which represents more than 60 producers from around the world: “People come from all over the country and the world to eat in the wonderful restaurants we have here with wine lists full of selection and varied price points If ‘At Rest’ passes, the most interesting wine companies in New York State will be forced to drastically raise prices as a best-case scenario or be forced out of business.”
How much money are we talking about in terms of donations? Empire Merchants has handed out a half-million dollars in just the past eight years.
In addition to big donations from Empire and Southern or their senior management to reelection campaigns of Klein, they also have padded the treasuries of such other politicos as Cuomo, Assembly Speaker Sheldon Silver, Senate Majority Leader Dean Skelos and State Senator José Peralta, with a further donation to the Independent Democratic Conference that Klein heads. All but Skelos are Democrats; all collude to run the government, mostly through closed-door meetings.
Some business people who are NOT meeting in secret have created a group they named the Stop the Cork Tax Coalition. It consists of 37 business such as small wine and spirit distributors, distillers, wholesalers, vineyards and retailers from across the state. They are, obviously, vigorously opposed to the legislation proposed by Klein and his cronies.
There are, of course, other supporters of “At Rest” beyond the big distributors and grateful politicians. Some unions in New York, for example, say increasing the number of wine warehousing spots would add jobs. However, unions in New Jersey complain they may lose jobs if the proposal becomes law, and some warehousing firms say they’ll be forced out of business.
The final insult in this legislation is the inclusion of all-capital boiler plate language that precedes the proposed details:
“THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:”
Rarely is it true that this Legislature, under any recent governor, passes legislation the majority of the “people of the state of New York” would approve of. It is rife with special interest, thank-you, appeasement and insider-dominated proposals. The deals are made behind closed doors, and this one, ironically, probably was done over a glass of wine or whiskey.