Government Affairs

Private Collection - State Legislature

Last year the NYC Hospitality Alliance secured a major victory when we defeated a proposal, that if enacted, would have placed restrictions on restaurants that purchase rare and hard to find wines from "private collectors" when licensed wholesalers in New York didn't carry a wine or did not have sufficient quantity to meet demand. This proposal would have significantly limited the ability of NYC restaurants to continue buying and serving many incredible wines from around the world. The Alliance commended the State Liquor Authority for working cooperatively with us to drop the proposal after we explained all the negative impacts it would have had.

Unfortunately, a similar proposal has now been introduced in the NYS Senate that would significantly limit a restaurant's ability to purchase wine from a "private collector." Additionally the proposal requires a "primary American source of supply." This means that a manufacturer of a popular wine, champagne or spirit would  be forced to choose a single distributor in the State of New York. By doing so, there is no competition for such a highly demanded product and retailers and restaurants would be required to buy from a single supplier and at any price they set - meaning consumers then have to pay higher prices.

The New York City Hospitality Alliance already issued an opposition memo to this proposal and will aggressively oppose it. This is yet another example of why we cannot rest after our advocacy successes and our organization must stay vigilant. If purchasing wine from private collectors or the cost of purchasing product is important to you, or someone you know in the industry, please let us know asap, so we can activate you in opposition if needed.

Click here to read our Opposition Memo.

We will bring you updates on this important matter as they become available. Don't hesitate to contact is with questions. 

Read Transcription of PDF Memorandum of Opposition S5437 (Murphy)

NYC HOSPITALITY ALLIANCE MEMORANDUM OF OPPOSITION S5437 (Murphy) An act to amend the alcoholic beverage control law, in relation to establishing a primary American source of supply for liquor and wine sold in this state The New York City Hospitality Alliance — a not-for-profit trade association representing thousands of restaurants, wine bars, hotels, and other hospitality and nightlife establishments throughout the five boroughs — strongly opposes 55437 (Murphy) regarding the purchase and sale of private collections of wines and spirits and requiring a "primary American source of supply." This legislation will have a direct, negative impact on restaurants, hospitality businesses and consumers across New York State and for the following reasons we urge the legislature to reject this bill: 1. This is a solution in search of a problem The current system works. It is not broken and does not need to be fixed. It cannot be overemphasized that a significant reason why on-premises licensees engage in the practice of legally obtaining fine and rare wines from private collectors is because the licensed wholesalers in this state either do not have these wines posted at all, or if they do, they have them in such limited quantities so as to not meet the demand. The Alliance's members regularly point out that if New York's distributors had such wines available in sufficient quantities, they would purchase them from the distributors, as they do for all other products. In the best spirit of New York City entrepreneurship, retailers have legitimately and legally utilized the ABCL's mechanism for obtaining such unavailable wines from private collectors. These circumstances are entirely consistent with the law permitting the purchase of wine from non-licensed persons. The State of New York benefits fully from these purchases. Either licensed importers legally import the wines, all import fees and taxes are paid, and the State collects sales tax on the sale to the consumer; or domestic private collectors have a mechanism for lawfully selling their wines. No one is harmed, and all are regulated. Finally, the suggestion in the sponsor's memo that "the most compelling reason to impose a primary source law or system involves the protection of the public's health and safety" is wholly without any evidence whatsoever. Numerous conversations with hospitality and wine professionals who have been in the industry for decades have uncovered exactly zero incidents involving patrons who may have been sickened or otherwise harmed by fine wines procured in this fashion. Again, this is an unfortunately sensationalist argument with no basis in fact and simply reinforces that 55437 is essentially a solution in search of a problem. 2. Significant impact on New York City's world-renowned wine culture New York City is known throughout the world for our fine eating and drinking establishments. An important factor to our gastronomic and oenophile culture and greatness is the diversity of the wines and spirits available on our city's restaurant and bar menus. The wines and spirits are carefully selected and often paired with cuisine by highly educated and skilled professionals, for the benefit of discerning customers. While on-premises licensees of course purchase the overwhelming majority of their wines from licensed distributors, as discussed, there is an entire universe of fine and rare wines that the distributors cannot make available, or have only have available in unreasonably limited quantities. This bill will have the effect of limiting the availability of such rare wines, which would also tarnish New York's standing as a gastronomic destination and therefore be a detriment to our tourism economy. 3. Potential for anti-consumer monopolies Finally, the proposal for a mandated primary source for every product is a potential monopolist's dream come true and would have anti-consumer impacts. For example, why should a manufacturer of a popular wine, champagne or spirit be forced to choose a single distributor in the State of New York? By doing so, there is no competition for such a highly demanded product and retailers and restaurants would be required to buy from a single supplier and at any price they set — meaning consumers then have to pay higher prices. ABOUT THE NYC HOSPITALITY ALLIANCE The New York City Hospitality Alliance is a broad-based membership association founded in 2012 to foster the growth and vitality of the industry that has made New York City the Hospitality Capital of the World. It is the first association ever formed in New York City representing all facets of this diverse industry: restaurants, bars, lounges, destination hotels and major industry suppliers. Through the support and involvement of its members, The Alliance is committed to advancing -- with a clear and unified voice -- an agenda focused on opportunity, economic investment and job creation. Advocating on behalf of our members at all levels of government, The Alliance supports pro-growth public policy, encourages investment in and promotion of NYC's hospitality industry, and evaluates the development, implementation and fairness of relevant government regulations. Should you have any questions about the NYC Hospitality Alliance's position, please call Executive Director Andrew Rigie at 646-532-2756 or our lobbyists, Yoswein New York, Inc., at 212-233-5700.

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