On December 16, 2008, Governor David Paterson of New York released a proposal to legalize and allow the sale of wine in grocery stores. Five weeks later, on January 28, 2009 a group of small business owners and independent wine sellers from around New York state announced the formation of a coalition, The Last Store on Main Street, to stop a state proposal that would legalize the sale of wine in grocery stores, mini-marts, delis, gas stations and bodegas in New York. Wal-Mart, for example, currently has 52 superstores and 49 discount stores in New York state. If implemented, the Coalition warns, this change would devastate many small businesses and cost the state thousands of jobs. Additionally, the sale of wine in every store where beer is now available would give teenagers greater access to alcohol, the group says. “This misguided plan would benefit Big Box stores like Wal-Mart without creating even one new job, while imperiling Main Street businesses across the state and the thousands of jobs they provide,” said Jeff Saunders of the Retailers Alliance Foundation. “We know that this change would close more than 1,000 small businesses, resulting in the loss of over 4,000 jobs of hardworking New Yorkers. That’s bad for New York and our economy.” The Coalition notes that a similar vote in Massachusetts was rejected by voters in 2006 by a 56% majority. The proposed Massachusetts law would have allowed local licensing authorities in cities and towns to issue licenses for food stores to sell wine. The proposed law defined a “food store” as a retail vendor, such as a grocery store, supermarket, shop, club, outlet, or warehouse-type seller, that sells food to consumers to be eaten elsewhere. A group called the Massachusetts Food Association, which describes itself as a group of “retailers (from the large chain supermarkets to the corner store operator), food brokers, manufacturers and wholesalers,” paid for a study in August of 2006 which concluded that package stores owned the majority of the state’s 2,555 existing retail store liquor licenses and currently control over 85% of off-premises wine sales in Massachusetts. The study argued that Massachusetts law protects the market power and market share of Massachusetts package stores, so these outlets charge higher prices than stores in other states. “The anti-competitive effects of current Massachusetts law increase costs to Massachusetts consumers by $26 to $36 million per year,” the study found. “Contrary to claims made by opponents, the data shows that package stores are not driven out of business simply because local grocery stores can sell wine.” But nearly 1.2 million Massachusetts voters rejected those arguments. The Coalition says that in Florida, California and Texas, three states where wine is sold everywhere, the number of alcohol related fatalities per 100,000 is more than double that of New York State. Thousands of small business owners from across the state formed the Last Store on Main Street coalition to lead the fight against the legalization of wine sales in supermarkets. Small business retailers affected by the state’s proposal have indicated that 65% to 80% of their overall sales are devoted to wine — putting their livelihood and employees’ jobs at risk. If the proposal is passed, the state’s biggest supermarkets would be able to sell grocery items and wine, making it almost impossible for small wine stores to compete.
In 2003, it was estimated that Wal-Mart would control 35% of the supermarket industry sales by 2007, and 25% of the drug store industry. Wal-Mart alone is bigger than the combined sales of the top 10 supermarket retailers. In 2002, Wal-Mart controlled 33% of the over the counter drug market, while supermarkets had 28%, and drug stores only 16%. In 2002, Wegman’s had to adopt a lower pricing strategy on 4,000 grocery items to blunt the impact of Wal-Mart penetration in upstate New York. According to the St. Louis Post Dispatch, Wal-Mart began offering alcoholic beverages in 1988, mostly through supercenters. But Wal-Mart discount stores, which carry limited food items, have been slower to expand into alcohol. But in 2008 Wal-Mart began selling alcohol at its discount stores. Alcohol is available at stores where liquor sales are legal, and not all discount stores have both beer and wine. Wal-Mart told the media it was just responding to customer demand. “The mix of merchandise in our stores is reviewed frequently to ensure we are meeting the needs of our customers,” a Wal-Mart spokesman said. “Over the years, our general merchandise stores have added more and more grocery items, and we recently began adding beer and wine in areas where there is customer demand and licensing laws allow the change.” The Dispatch said that beer and wine are big draws. Wal-Mart’s decision to add a limited selection of beer and wine at its discount stores is not necessarily about how much money Wal-Mart can make from the sale of alcohol in the short term, experts said. It’s about bringing people into the stores. The corporation is trying to find ways to attract customers who might otherwise get beer and wine at groceries that have “spiffy” liquor departments. Governor Paterson’s proposal has drawn its critics from the New York State Assembly. Senator Brian X. Foley (D — Blue Point), who serves on the Senate Economic Development Committee, issued a press release saying: “At a time when our working families are facing unprecedented challenges, we do not need more businesses shuttering and more men and women out of work. We also need to do our part in combating underage drinking and work towards safer, more prosperous communities.” Assemblywoman Patricia Eddington (D-Medford) added, “The budget proposal permitting wine to be sold in grocery stores will drastically hurt our local wine stores’ bottom lines, especially given the fact that the bulk of their sales usually come from selling wine. And I am very concerned that if this becomes law, many of these small businesses will be forced to close their doors, resulting in more people losing their jobs.” The Last Store on Main Street has an online petition to sign which reads: “We, the undersigned, wish it to be known that we are opposed to the sale of wine in grocery stores. We strongly believe that the current system of licensed retailers is sufficient for the needs of consumers, and that this method allows the best assurance that controls over sales to minors will continue to be maintained and enforced. Plus, incidences of underage drinking and teenage drunk driving accidents will undoubtedly increase. New York wine sellers are one of the last independent businesses to remain in the state, and because they are small businesses, they have greater control over their stores and who walks through their doors. Grocery stores do not have this heightened level of control due to their size, so if grocery stores begin selling wine, teenagers will have greater access to alcohol. You can help save New York jobs and protect our teenagers — please take action today to stop this proposal.” To sign the petition, and help the Coalition stop sales at Wal-Mart superstores and other big boxes, go to www.lastmainstreetstore.com. The addition of wine sales to Wal-Marts in New York state will only further consolidate their share of the retail industry.