The two biggest players appear to be at it again to push out the small and medium sized wholesalers that bring a wealth of fine wine options to New York Consumers. The “At Rest” law would require wine to be in New York state for at least 48 hours before delivery to a licensed bar, restaurant or retailer.

We hope the sun is not setting on affordable fine wine wine options in New York. Photo: © Eric Ortner

We hope the sun is not setting on affordable fine wine wine options in New York. Photo: © Eric Ortner

Unlike the big guys with massive warehouses of their own in state, most small and medium sized wholesalers rely on relatively low cost temperature controlled facilities in New Jersey to stay in business and provide consumers the diverse array of fine wine available in New York.

The law would force the smaller competitors to raise prices to cover an inefficient layover period in New York, and eventually migrate to New York based storage facilites that don’t yet exist. This would like take quite a bit of time to build new temperature controlled facilities and would likely be much more expensive than the existing NJ facilities.

The big guys, Southern Wine and Spirits and Empire Merchants, whose business model is to move large volumes of mass market brands (especially hard liquor), have given $360,000 in the last election cycle to local politicians and Empire has given one of the bill’s sponsors, State Senator Jeffrey Klein, $30,000 since 2009, according to Wine Spectator.

The likely outcome of the “At Rest” law should it pass:

For the Big Two Wholesalers

  • less competition
  • greater efficiencies to move larger volumes of current brands

For Small and Medium Sized Wholesalers

  • huge spikes in costs
  • slower service to customers
  • bankruptcy for smaller outfits

For Restaurants, Bars and Retailers

    (with good wine programs)

  • Significantly diminished choice
  • higher prices
  • more cumbersome logistics
  • diminished appeal and sales to customers

For Consumers

  • Significantly diminished choice
  • higher prices

The end result will be a loss for consumers, a loss of business and jobs among small and medium sized wholesalers, and for the big guys, more business, and for a few enterprising business people, a new warehouse business.

For more on the hardscrabble political patronage side of the story see:
The New York Post story

For more of a consumer angle see:
Wine Spectator’s story

For more of a Sommelier, Fine Wine Merchant and Small Wholesaler angle see:
Sommelier Levi Dalton’s story on Eater.com

 

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