Cuomo Veto of Alcohol Retailer Bill Upholds Three Tier System and Underscores State Regulatory Authority over Licensees

Source: WSWA

December 15, 2015

Wine & Spirits Wholesalers of America (WSWA) President and CEO Craig Wolf today praised New York Governor Andrew Cuomo for vetoing a bill that would have weakened the state’s ability to regulate alcohol retailers.  Wolf noted that the bill, A. 5920, would have undermined the state liquor regulator’s authority over its licensees-even if those licensees engage in illegal activity-thus neutering a key principle of the three-tier system established under the 21st Amendment.  WSWA actively opposed the bill which had been promoted by Albany-area retailer Empire Wine, and encouraged the governor’s veto.

In his veto statement, Gov. Cuomo echoed concerns raised by WSWA and others.  He noted that “holding a New York State liquor license is a privilege,” and that the New York State Liquor Authority (NYSLA) is “statutorily obliged to ensure that licensees act in a legal and ethical manner.”  Gov. Cuomo also wrote that the bill would allow NYSLA “licensees to use their New York licenses to illegally access other states’ markets and knowingly sell their products in violation of other states’ laws-all without fear of reprisal..”

“The Empire Wine proposal was a bad bill and would have made an even worse law,” Wolf said.  “Gov. Cuomo’s decision should be applauded by anyone who values a safe and orderly beverage alcohol market.  His veto was in the best interests of New York consumers and alcohol beverage license holders.”  

“Gov. Cuomo’s blue ribbon working group and the NYSLA will shortly begin dialogue with stakeholders on ways to modernize state beverage laws while respecting the three-tier system and ensuring strong regulatory oversight.  This process is appropriate and should be earnestly undertaken by all parties while preserving and promoting the primary role of regulators in New York to effectively oversee their licensees,” Wolf said.

“While we are certainly pleased that Governor Cuomo has recognized the issue of illegal direct shipments across state lines by New York licensees, this problem is not isolated to the Empire State.  WSWA encourages all states to conduct strong oversight of their licensees mindful of the lessons learned in this case,” Wolf added.

The bill was introduced after NYSLA began an investigation into Empire Wine, for illegally shipping alcohol across state lines in violation of New York states laws and in violation of recipient state laws.  Unhappy with the regulatory oversight undertaken by NYSLA, Empire Wine sought a quick fix bill in the legislature.

WSWA is the national trade association representing the wholesale tier of the wine and spirits industry, dedicated to advancing the interests and independence of wholesalers, distributors and brokers of wine and spirits.  Founded in 1943, WSWA has 362 member companies in 50 states and the District of Columbia and its members distribute more than 80 percent of all wine and spirits sold at wholesale in the United States.  More information is available at www.wswa.org.