WIG Myth & Fact

8/9/2019 WIG Myth & Fact

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Myths and Facts

About Wine in Grocery

InNew York State

Myth: Wine in groceries means lower prices.

Fact: A 2009 comparison of the advertised prices for wines in a Wegmans out-of-state weeklyflier were higher than the every-day price at a Rochester, New York liquor store.

Myth: Wine in groceries means greater consumer choice. Fact: Consumer choice is measured by the number of product options available. Florida, awine-in-grocery state has 6,000 wine labels available to choose from. New York has29,000. Almost five times the number of choices.

Myth: Wine-in-groceries means more winewill be sold and this will help NewYork wineries.

Fact: 17.4% of legal aged adults purchase 92% of all wine sold in the US. These people arenot going to buy any more wine. After the pipeline is filled the amount of wine sales willbe little more that it is today.

Myth: Wine-in-groceries will increase salesof NYS wine which will help NYSgrape growers.

Fact: In addition to the fact above, 93% of the grapes planted in New York are not wine makinggrapes. Most New York grape growers have no wine grape varieties planted at all. Even if you could increase the sales of NYS wine, this will not help most NYS grape farmers atall.

Myth: Liquor stores have a monopoly onwine sales.

Fact: A monopoly enterprise has sufficient control over a particular product to determine accessto it. They are characterized by a lack of economic competition for the product and a lackof viable substitute goods. Any non-felon, US citizen can obtain a New York liquor storelicense. The market is free to allow supply and demand to work-out an equilibrium price.A liquor license is an instrument of public policy over a sensitive product and to assuretax collection. It is not a limit to competition or a guarantee of excessive profits.

Myths and Facts About Wine in Grocery In New York State



Myth: New York is under-served by a lownumber of wine outlets.

Fact: New York Ranks #16 in per-capita wine consumption, but #49 (almost dead last) in per-capita beer consumption. The 2750 New York liquor stores are doing a far better job thanthe 19,000+ beer outlets in reaching the consumer. In most areas there is a liquor store inthe same plaza that the supermarket is located in. There is obviously no lack of accessto wine in New York.

Myth: Underage drinkers will not seek-outwine because it it not desired by

them.

Fact: A recent poll of college students discovered that wine is the preferred drink of choice for underage female drinkers. Many ‘alco-pop’ wines (sweeter, beverage oriented wines

rather than dryer, food or table wines) have up to 20% alcohol and make for very potent,intoxicating drinks.

Myth: Additional wine outlets will not affectunderage drinking or underagealcohol related traffic fatalities.

Fact: Several wine-in-grocery states have far worse statistics than New York on these counts.Our alcoholic beverage control system helps deliver one of the lowest underage trafficfatality statistics in the US. If keeping intoxicating beverages out of th hands of under agedrinkers is the goal, New York gets high marks for accomplishing that goal.

Myth: Lower alcoholic beverage prices andgreater availability are desirablepublic goals.

Fact: Common sense refutes this idea, and history shows how wrong it is. Many Europeancountries, Great Britain, for example, are now dealing with a serious problem of alcoholabuse and high alcohol abuse related social costs as a direct result of the deregulationand commoditization of alcoholic beverages. It was a huge mistake.

Myth: wine-in-grocery will help close theNYS budget gap.

Fact: Any new revenue that wine-in-grocery might generate will be more than offset by themany wide ranging effects of this change. Unemployment, excise and sales tax revenues,state income tax revenues and many other social costs like underage drinking and trafficfatalities will add great cost to NY. The grocery industry itself questions the believability of the governor’s unverified revenue projections, and they admit that this is just a one-shotdeal that will end in 2 years.

Myth: Grocery and big-box stores wantopen markets and reduced barriersto entry.

Fact: Grocery lobbyists have carefully crafted the wording of the proposed bill to restrict marketsand raise barriers to entry. Specifically, they want to take 50% of the products liquor stores sell for themselves but do not allow liquor stores to add any meaningful lines likebeer or cigarettes to replace lost wine sales. They devised a medallion system that will

restrict the current free and open access to a liquor license for three years.

Myth: The “Liquor Store Revitalization Act”is fair and good for them.

Fact: Nothing in this bill is designed to benefit liquor stores. Every word in it was crafted by thegrocery and big-box lobbyists to insure that groceries have greater advantage over liquor stores in order to drive them all out of business. Groceries will then move to add liquor totheir beer and wine section, too.




Myth: wine-in-grocery is in 35 states nowand it will work in New York too.Most liquor stores will adapt to thechange and then flourish.

Fact: Liquor distribution in New York is unique and can’t be compared to any other state. Anywine-in-grocery state that exists today was either that way from repeal or was convertedfrom state-owned stores. Never have privately owned small businesses like the liquor stores in New York been forced to bear the devastating financial costs of such a rapidand sweeping change as this. To expect small, individual stores to successfully competewith the market and economic muscle of the largest retail chains in the universe over-night is unreasonable and doomed to failure.

Myth: Grocery and big-box stores arenoble altruists and will alwayssupport local wineries.

Fact: Supermarkets and big-box retailers are economic sharks whose business model insists onhigh volume, low margin sales. The reality of this model requires them to limit shelf space to only those products that can produce the maximum profit per cubic foot. Localfarm produce, for example, fits in because it is fresh and close; transportation costs arelow enough to make them competitive in season. The second you can get applescheaper from Washington or Argentina the groceries will drop local products like a hotpotato. Groceries will by necessity stock lower cost out-of-state and imported wines whileleaving local wineries off the shelf.

Myth: Current liquor stores are unhappywith the current laws and are

seeking to fundamentally changethe current business model of restricted sales and single storeownership.

Fact: None of the current push to change current laws and allow wine in groceries wasinstigated by liquor stores. Grocery lobbyists have sought to sell wine for decades, and

are using the current recession and budget shortfalls to make it appear they are helpingthe state and the grape growers/wineries. In reality it’s all about adding wine profits totheir bottom line with little regard to the tremendous financial devastation that will affectthe relatively weak and powerless independently owned liquor stores. After thelegislature denied them yet again in 2009, they came back to the legislature offering aslew of “compromises” which are actually thinly veiled attempts to put groceries at greatadvantage over liquor stores in respect to selling wine. Liquor stores, on the other hand,have never asked for any changes and are willing to work within the restrictions that havebeen in place for over 70 years. Very few liquor store owners are in their 70’s, and wentinto business knowing full well the restrictions on liquor stores. They are not seeking anyof the “revitalizations” that the proposed bill wants to shove down their throats.

Myth: Wine is food and should be treatedlike beer in the way it’s sold.

Fact: Wine is a potent alcoholic beverage that contains much more alcohol by volume (abv.)than beer. Wine sold in New York ranges from 8% to 20% abv. while beer ranges from2.8% to 4.7% abv. A nutritional analysis of wine provided by www.wineloverspage.com shows that other than for calories and a few grams of carbohydrates there is littlenutritional value in a serving of wine. Just because it can be swallowed does not mean it’sfood. On the other hand, making wine widely and cheaply available has manyundesirable social consequences.


http://www.wineloverspage.com/



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