The so-called "At Rest" legislation would require wine sold in New York to also be warehoused in New York State before delivery. Several local wine wholesalers have voiced opposition to the legislation, and they have formed the New York Alliance of Fine Wine Wholesalers to rally against the proposed changes. Eater spoke with Harmon Skurnik, the President of Alliance member Michael Skurnik Wines, to find out more.
What is the "At Rest" legislation?
This is not something new. This is part of how the large liquor houses compete. They've done this in other States. They are looking for ways to make the situation more advantageous for them. The At Rest legislation is constantly being attempted. They want the legislators to pass a provision that would make the small companies uncompetitive. Southern and Empire already have warehouses in New York State. The small guys have warehouses in New Jersey. Why do we do that? Wines come into the port of New Jersey. Where is there availability of refrigerated warehouse space at a reasonable cost? In New Jersey. Where is it convenient to store wines and pick them up for daily delivery to Manhattan? New Jersey.
There doesn't exist available warehouse space for us to move all of our operations into New York, unless it is 100 miles north of the city. There isn't a place to do this in New York at a reasonable cost. Either the small guys would be put out of business, or the cost of the wines in the market would go drastically up to reflect the higher business costs. If the small guys can't compete they will go out of business, and the large companies with dominate the industry even more than they already do. That is basically their plan, and we don't want to sit idly by and watch that strategy go unchallenged.
How would the market change if the proposed legislation were to pass?
The change would be dramatic. Ultimately, there is an amazing amount of cost that would have to be passed on to consumers. We would have to scramble to find a way to continue to do business. With At Rest, you could continue to warehouse in New Jersey if you wanted to, but in order to make a delivery in New York the wine would have to rest in New York State for 48 hours before being delivered. But next day delivery is key. It is critical to customers. So we would have to go to great lengths to find warehouse space in New York that currently doesn't exist. There would be big costs associated with that, and a big impact on profitability. Some of the smaller guys would frankly not be able to afford to do so, and they would be eliminated from the market. Why is there an incredible diversity of wine options available in New York today? Because there are many, many different wholesalers. There are over 100 wholesalers that have the ability to conduct business. Curtailing that is anticompetitive and it would cost jobs.
The New York Alliance of Fine Wine Wholesalers recently held a public tasting of 500 wines to promote awareness of the At Rest issue, and to benefit Hurricane Sandy relief at 82 Mercer.
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