Liqour selections

State Liquor Authority proposal could benefit consumers, bars and wine merchants

The State Liquor Authority is considering a major rule change that would save some independent restaurants and small liquor stores significant amounts of money and, from a consumer perspective, could improve the variety and selection of alcoholic beverages.

It also presents interesting potential for a political battle, as the two companies most opposed to change – distribution behemoths Southern Glazer’s Wine & Spirits, the largest US retailer in America, with more than 5,000 brands, and Empire Merchants North – were revealed to have the ear of Gov. Kathy Hochul, whose campaign received $25,000 in Southern Glazer’s contributions.

The Times Union reported in April: “During recent state budget negotiations, according to Democratic Senator James Skoufis, Hochul’s office repeatedly rejected Senate proposals to level the playing field in the within the alcohol industry – ideas strongly opposed by Southern Glazer’s.”

This is now referred to as shared case fees. The way the liquor distribution system is set up in New York, manufacturers typically sell to wholesalers, who then supply products to businesses that serve consumers, including bars, restaurants and wine shops.

Wholesalers encourage larger purchases with volume discounts — the price per case drops if a retailer or restaurant buys three, five, or 10 cases instead of just one, for example — and discourage smaller purchases by imposing additional charges if minimums are not met.

Since 1969, the SLA has allowed distributors to add a charge if a customer does not want a full case, recognizing that there is work involved in opening manufacturer-sealed cases and putting, say, four bottles of three kinds of wine or spirits to make a complete case of 12 bottles.

Reasons vary for wanting to buy less than a full case. Sometimes it’s because a bar or restaurant doesn’t need or can’t afford to buy a whole case of a premium niche product that sells more slowly than the wines or spirits of great brand. And sometimes there isn’t enough storage space for full boxes of everything a business wants to offer. Being allowed to buy split cases means the possibility of more choice for the consumer. If a restaurant or wine store that showcases Barolo can get allotments of four bottles from three wineries instead of a full case of one without being afflicted with excessive split case charges, a customer’s options triple .

The last time the ALC rules were changed, in 1980, distributors were limited to charging a fee of $1.98 per case for shared cases. The official cap hasn’t changed in the last four decades, but due to lack of enforcement and other complicated factors, some distributors have dramatically increased their shared case fees. According to local restaurateurs, retailers and Scott Wexler, executive director of the Empire State Restaurant & Tavern Association, split case fees can now reach $30 to $40 or more per case from Southern Glazer’s and Empire Merchants North. That’s an average of $2.50 to $3.33 per bottle over what a retailer would pay for a full case. I was told by a retailer that a wholesaler who only sells spirits charges up to $4 per bottle on split cases, but I have no confirmation of this elsewhere. Some small distributors who represent low-production wines and spirits charge as little as 66 cents per bottle to split cases, or nothing.

A new SLA rule introduced last week would cap split case fees at $7.39, or 62 cents per bottle. The savings for a business would be up to 85 percent.

“We estimate this would save some of our members at least $50 a week in shared case costs,” said Wexler, who has campaigned for an imposed cap for years and is in active negotiation with ALC at this topic since 2019.

“We recognize there’s extra work involved in splitting a case, but it’s definitely not $3 a bottle,” Wexler said, “Most of what wholesalers get out of this is a pure profit on the backs of small retailers so they can cut prices to large retailers who buy in bulk.”

Restaurants and liquor stores have to deal with the big guys to offer popular brands. The general public can make comparisons between liquor stores to get the best prices. But if a restaurant’s customers demand Tito’s vodka – and they do, to the tune of 10 million cases and $1.4 billion in revenue a year – the only source for a restaurant or store to New York liquor is Southern. Same for Jack Daniel’s and Empire. Southern also has exclusive distribution of Gray Goose vodka, Bulleit bourbon, Malibu rum, Jameson whiskey and the Bacardi line. Among Empire’s portfolio are Stolichnaya vodka, Hennessy cognac, Moët champagne and Barefoot wines.

The proposed cap “would definitely make a big difference,” said Tess Collins, owner of McGeary’s Pub in downtown Albany, which offers a wide selection of consumer products from major distributors. Collins said, “We’re hit with so many fees: delivery fees, (fuel) fees on top of that, split checkouts, $20 for not buying enough. It really adds up fast.”

Restaurants with a different focus can steer clear of Southern and Empire, except for a few items, which they buy in full or multiple batches and stock until they’re gone.

“We only deal with the big two when we absolutely have to,” said Vic Christopher, owner of Clark House Hospitality in Troy. He exclusively uses boutique distributors who charge minimal or no fees for the small, eclectic selection at his retail store, 22 2nd St. Wine Co. This is largely true for purchases from his Lucas Confectionery wine bar and the Italian restaurant Donna’s, Christopher. says, although he has to buy brands from Empire and Southern for his dive bar, called The Bradley, and The Tavern Bar, located above Donna’s.

“I get around them as best I can,” said Patty Novo, owner of Taverna Novo in Saratoga Springs. She looks for discounts and bundles, buys from small distributors and makes selective purchases when necessary from industry giants.

Novo said she doubts the proposed SLA cap will offer her significant regular savings, given the nature of her wine and spirits list, but, she said, “Every little bit counts. If I can ordering six bottles instead of 12 and not getting hit with a charge is definitely an improvement.”

ALC officially posted the proposed change to the New York State Registry on Wednesday (see pages 43-45 of the PDF). The matter will be open for public comment until five days after ALC’s public hearing on the matter, scheduled for September 14, and the board is required by law to respond to comments. A spokesperson for the agency said voting on the proposal will be scheduled at the discretion of the board, likely at its September 28 meeting.

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