Governor David Patterson's recent proposals concerning wine sales and raising taxes on wine have sent shivers through New York's wine industry as well as the ranks of the 2,742 liquor store owners in the state.

Under current law, only the aforementioned licensed retailers can sell wine and liquor, and they are subject to the State Liquor Authority. And while other states have long since made this proposed move, New York has resisted it for a variety of reasons. Now faced with a $15 billion budget gap, Patterson has thrown this brand on the fire in the hope of raising about $150 million over three years.

So, what's the problem here? Why shouldn't consumers be able to pick up a bottle of wine in the supermarket, just as they can, and do, in California and 34 other states? It would add a potential 19,000 other outlets for wine in the state, and with that much more exposure, it would likely lift wine sales in New York.

Proponents of the change make the point that there are fewer wine outlets per capita in New York than in almost any other state. More than that, American cities that allow wine sales in grocery stores have plenty of liquor stores.

An analysis by the American Economics Group found that as a result of wine in grocery stores there would be a minimal loss of liquor stores. They also claim that the increase in jobs in wine retail industry would make up for the loss of some liquor stores.

However, John Newmark, a wine distributor who covers the tri-county area, disagrees, saying, "This will put a thousand or more of our wine and liquor stores out of business. The smallest family-owned and operated businesses are the ones that will go out. And with them will go jobs."

By some estimates, as many as 4,000 jobs will be lost. But the effect on our local wine industry is also a concern. Michael Migliore of Whitecliff Vineyards in Gardiner, says, "Supermarkets are not going to take our wines. We aren't big enough, or cheap enough. They're going to fill their shelves with Yellow Tail, which is from Australia."

John Newmark concurs in that opinion. "Local wines just don't turn fast enough to be on a supermarket shelf. Supermarkets have to have turns, brand recognition is vital, it's all self-sell, there won't be anybody there to give the consumer advice, so it has to be a recognizable item. That means Gallo, Kendall Jackson, Yellow Tail, Sutter Home — the big brands."

Those who are in favor of the change, including the New York Farm Bureau, say that "New York's grape growers and farmers win through a greatly enlarged marketplace and a coordinated marketing effort of New York wines." Our local wine makers would seem to be less than convinced by that, however.

Local liquor stores are even less sanguine. At Ellenville's Liquor King on Route 209, Mark Soni says, "This will definitely hurt all the wine and liquor retailers. If ShopRite and Walmart can sell wine, they will be able to get a much lower wholesale price from the distributors than we can. They will undercut us in the market."

Asked about what steps might be available to the smaller retailer in the wine business, Soni says, "Right now, we are waiting to see what happens."

At Valley Supreme Liquors in Pine Bush, Fran Moriano has major doubts about the value of the governor's move, even for the state's strapped finances.

"He seems to think he will make more revenue, but I don't see where he gets that idea from. This will be a one time shot, when they make money from licensing, but after that I think it will lose money. It's not going to raise wine sales in my opinion, just dilute them and put a lot of liquor stores out of business."

Moriano raises another point. "Liquor stores aren't allowed to hire anyone under 18, but supermarkets can. Are 17 year olds in supermarkets going to be allowed to handle bottles of wine? Are they going to change those laws?"

Beyond that, supermarkets and convenience stores are open 24 hours a day in some areas. Will they be allowed to sell wine around the clock?

Moriano notes that the proposal will also be unfair to the liquor stores on another front. "We're not allowed to even sell olives to put in someone's martini! Will they change that too? Will we be allowed to sell beer, because as it stands we're not. It all seems like it wasn't thought through very well."

Indeed, the governor and his staff are struggling with a budgetary monster the size of Godzilla and may well not have considered all the ramifications of this change in the law.

"For the wineries in the Hudson Valley, this proposal is just a killer," says Migliore. "It will knock out the stores that do carry our wines, open wine sales in supermarkets that won't carry our wines, and depress our sales. It's just a really bad idea."

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