New York: Bodegas get their beer at Costco and beer distributors pop their tops

Jumbo-size stores get off easy despite skirting the law, they say

Source: Crain’s

By Rosa Goldensohn

January 19, 2016

Local beer distributors are whipped into a froth over warehouse-style stores they say are stealing their bodega business.

Jumbo-sized discount stores like BJ’s and Costco are not allowed to sell beer to other retailers for resale under state law. But bodega owners often pick up suds at the stores because they can be cheaper than distributors.

The State Liquor Authority is aware of the issue, and in fact worked out agreements last May requiring them to hang “not for resale” signs at their beer displays. In exchange, previous cases against the stores were dropped.

The distributors, who were in the dark about the deal until recently obtaining them through a records request, are incensed. They say they are already squeezed by rules that favor huge wholesalers and need tougher enforcement on the grocery clubs.

“This is a fight for small business survival,” Edward Perez of the trade group Empire State Beer Distributors said.

Around 100 independent beer distributors are left in the city, according to the trade association.

Despite the boom in local Brooklyn brews, beer swirls around all the city before hitting the corner bodega. Breweries sell to wholesalers-Manhattan Beer Distributors in the city-which sells to stores, bars, bodegas and other retailers. Independent beer distributors also bring the beer back to neighborhood warehouses, where local shops can pick up the six-packs. 

The distributors have also called on Attorney General Eric Schneiderman to break up what they say is an effective monopoly on distribution by Manhattan Beer Distributors, and are pushing state legislation to set beer prices for breweries.