NY liquor store lobbying groups oppose allowing chains to own stores, a push complicated by their history

Multiple lobbying groups representing liquor stores, including the State Liquor Store Association and the Metropolitan Package Store Association, are lobbying against the idea. They argue that changing state law would open the door to major, chain retailers, while pushing out mom-and-pop establishments.

But records show that in 2017, the chairman of the Metropolitan Package Store Association paid a substantial fine for engaging in an alleged scheme wherein three liquor stores illegally worked in tandem in a manner similar to a chain store, a case the state's top liquor enforcement official called "exceedingly troubling."

And several major wine and liquor stores in Western New York – including one owned by a board member of the Liquor Store Association – are closely associated and jointly advertise, though in that instance, there is no indication the stores are operating outside the bounds of state law.

Mark Notarius, the member of the Liquor Store Association board of directors, is owner of Premium Wine and Spirits in Williamsville, according to state records. Meanwhile, his mother is listed in state records as owner of Premier Wine and Spirits in Amherst, while his sister-in-law owns Prestige Wine and Spirits in Orchard Park.

The three stores jointly run print advertisements in The Buffalo News under the banner of "Premier." The ads indicate that all three stores sell various liquor products at the same price, and all three also are advertised on a website, which says they are independently owned and operated parts of the "Premier Group." All three storefronts advertise the stores as "Premier," according to photos on the website. 

Various members of the same family to can legally each purchase liquor store licenses, then work together in certain ways. Current law requires stores to be independently owned and operated and prohibits loans between them. But joint advertising is permitted.

Still, the executive vice president of the state Business Council – a statewide business lobbying group that supports allowing individuals to have more than one license – called the Liquor Store Association’s position “hypocrisy at its highest level," citing the example of Premier.

“You have someone sitting on the board of one of associations that is critical of allowing more than one license. And although he's doing it with the bounds of the law, he is working around the law and advertising as a chain,” Zuber said. “The only people that can have that type of footprint are those that have the financial wherewithal to do it, where each separate family member has their own money."

The State Liquor Store Association represents 1,100 liquor stores throughout upstate New York. Stefan Kalogridis, the association's president, answered questions on behalf of Premier Group. He said there was “absolutely nothing wrong with someone who grew up in a family that ran a liquor store” who decides to “go out on their own and open up their own business under all existing laws and regulations, which is exactly what the situation is here."

Kalogridis said each of the Premier stores was "its own business that makes their own purchasing decisions" and that it was "common for local stores to band together for joint advertising and expressly permitted by the SLA."

The multiple license proposal could impact the cost of alcohol in New York. Experts say the measure could reduce competition. Still, consumers may see lower prices if New York allows high volume chains to own multiple liquor stores.

Zuber, the state Business Council leader, was recently on a 16-person state commission of industry stakeholders that recommended sweeping overhauls to New York's decades-old alcohol laws. Among its recommendations, by a 10-5 vote, was allowing individuals to have more than one license. The panel did not recommend a specific figure.

Among the commission's "no" votes on that recommendation, according to Zuber, was Michael Correra, executive director of the Metropolitan Package Store Association, another lobbying group that represents liquor stores across New York.

Like the Liquor Store Association, the Package Store Association has publicly opposed allowing multiple licenses per individual.

The nonprofit has for years been chaired by Joseph Viscomi, the one-time owner of Cappy’s Warehouse Wine & Spirits on Long Island. As of Tuesday, Viscomi was still listed as chair on the nonprofit's website. But a spokesman for the organization said Viscomi stepped down as the Package Store Association chairman several weeks ago.

In 2017, the State Liquor Authority found Viscomi was involved in a scheme in which three liquor stores were illegally working in tandem.

The SLA found that Viscomi was on the payroll of another liquor store, Henry Street; that Henry Street gave six-figure illicit loans to both Cappy’s and a third liquor store; that Viscomi had "signature authority" over a bank account owned by Henry Street; and that Viscomi falsely told state investigators that he had "no involvement" with Henry Street. The three stores jointly paid $300,000 in fines, including $50,000 paid by Cappy's.

The chairman of the State Liquor Authority, Vincent Bradley, in 2017 called the matter "one of our largest retail cases in recent memory," stating the conduct was "exceedingly troubling, striking at the heart of the SLA’s primary responsibility to enforce the law and maintain a level playing field for all retailers.”

Viscomi did not respond to a request for comment.

A bill recently introduced by Democratic State Sen. James Skoufis would allow individuals to own two liquor stores each, while Zuber supports a higher figure, noting that the limit in neighboring Massachusetts is nine.

The Liquor Store Association opposes any change in state law increasing the number of licenses per person beyond one. Kalogridis said the Association’s concern was that once loosening of the limit began in other states, it paved the way for “multimillion-dollar corporations to take over the industry and push out mom-and-pop small businesses like us."

In New York, "we've already watched some of them attempt to do this illegally and get fined for it. Now they're trying to make it legal," Kalogridis said.

Kalogridis was referring to a case brought by state liquor regulators several years ago involving Wegmans, the upstate supermarket chain. Wegmans and five affiliated upstate liquor stores agreed to pay $1.1 million in civil penalties to settle the allegations.

In that case, State Liquor Authority received a complaint that Buffalo-based Amherst Street Wine & Liquor was controlled by Wegmans. The Liquor Authority ultimately found that Wegmans was exercising significant control not only over Amherst, but four other affiliated stores.

A Wegmans spokeswoman said while the company was "not involved in this current push for multiple licenses, we are in favor of any legislation that modernizes the ABC laws in New York State."

Several grocery chains are members of the State Business Council, including Wegmans, while the group's membership does not include any liquor stores. The Business Council says its interest in the multiple license issue is "advancing projects and policies that create economic growth, good jobs and strong communities," and that it has other members in the alcohol industry, including beer manufacturers, wineries and the Farm Bureau.

How would the proposal affect consumers

If the state law were changed to allow multiple licenses, there would be both costs and benefits for consumers, according to Charles Lindsey, an associate professor of marketing at the University at Buffalo School of Management, calling the issue "tremendously complicated."

"You have countervailing forces at play when it comes to price," he said.

The easier it becomes for "quasi-chains" to expand and for big chains to enter the market, the more difficult for independent and small operators to compete and the more concentrated the industry becomes, diminishing competition.

On the other hand, he said, larger operators would have "more power when it comes to wholesalers and, in many cases, get better cost breaks due to their volume." That dynamic could result in lower prices for consumers.

Bradley Rickard, a professor of food and agricultural economics at Cornell University, said he believed allowing multiple licenses would create lower prices for consumers, since stores would be able to buy at bulk pricing. He has studied the price of alcoholic beverages in states that allow a greater variety of products at grocery stores, such as wine, and found alcohol is cheaper if more widely available.

If only one store were allowed to sell alcohol, in the model of a state-run liquor monopoly that exists in Sweden, that could negatively impact prices for consumers. Absent that, some consolidation of the market would likely not have a major negative impact on price, Rickard said.