NYC Restaurants Stuck With Thousands of Dollars in Unsold Wine as State Ends Takeout Alcohol Program

Sam Goetz, the owner of Judy’s in Sunset Park, says he knew New York’s temporary policy allowing restaurants and bars to sell takeout cocktails and bottles of wine to-go would eventually come to an end, but he was expecting the state to give at least two to three months’ notice. Instead, he got 24 hours.

“Doing it one day in advance is just sadistic,” according to Goetz, who estimates he currently has between 80 to 100 cases — roughly $15,000 — of stockpiled wine in the basement of Judy’s. “I’ve got a fridge with hundreds of bottles of wine that I cannot sell by the glass and have no idea what to do with.”

Like countless establishments across the city, Goetz had to get creative to keep his business open shortly after the start of the pandemic, so he turned his neighborhood wine and beer bar into a wine and beer store. Selling takeout beverages and bottles of wine to-go made up 100 percent of the bar’s sales for the first three months of the pandemic. “That saved our bacon,” he says.

Yet, as pandemic restrictions on restaurants come to an end and New York City shows signs of emerging from the pandemic, the situation has changed. Some restaurants — including Cervo’s on the Lower East Side and Hart’s in Bed-Stuy — have moved away from the restaurant-as-general-store business model and reopened their dining rooms for indoor seating. Others, including Judy’s and many small independent businesses, have put their “foot on the gas,” as Goetz described it, investing in infrastructure and building out retail businesses that can still account for as much as 10 to 30 percent of a restaurant’s total sales, according to multiple owners interviewed by Eater.

Earlier this week, Gov. Andrew Cuomo announced that New York’s state of emergency, which has allowed restaurants and bars to sell alcohol to-go since March 2020, would come to an end after June 24, roughly one day later. In the day since the announcement, Goetz and other restaurateurs have been scrambling to sell off inventories of bottled alcohol and adapt the businesses they have built up over the last 15 months of the pandemic. Some have a few dozen cases of liquor. Others are sitting on more than ten thousand dollars in wine.

Courtesy of Gertie

Sarah Goler, the owner of Tannat, estimates the small Inwood restaurant had as much as $15,000 in bottled wine at the time of the announcement on June 23. After sending an email newsletter to her customers and posting about the bottles on Instagram, Goler was able to sell more than $5,000 of wine in a single night. “The response has been overwhelmingly positive,” she says, “but it’s not enough to get through our inventory.”

Nor does it help with shipments that have already been ordered and can no longer be sold at retail prices. Tannat primarily works with small-batch and ethical wine makers, Goler explains, meaning shipments must often be ordered well ahead of time. The restaurant will continue to receive cases of wine that it can no longer sell throughout June and July.

“We can’t return them,” Goler says. “We’re also not going to be able to offload them in any way.” Many of the wines the restaurant purchased for retail sale would be too expensive — at least $20 a glass — to sell at the restaurant.

Courtesy of Tannat

To note, New York’s takeout cocktail legislation was previously set to expire on July 5, but multiple restaurant and bar owners say they were banking on that legislation being extended, as has been the case for the last 15 months of the pandemic. “It had been extended every single month,” says Nate Adler, the owner of modern Jewish deli Gertie. “There was no conversation around this time being any different.”

A day before the June 23 announcement, Adler had reconfigured the interior of his Williamsburg restaurant to expand its retail space, which he says includes roughly $4,000 in wine and liquor, with more on the way. “I have close to $2,000 worth of inventory coming today that I’m going to either need to refuse or figure out another way to sell,” he says.

At Gertie, bottled wine and liquor sales make up a “small portion” of the restaurant’s total sales, especially after the return of outdoor and indoor dining. But Adler says the retail business he’s been building for more than 15 months deserved more than a 24-hour notice. “It’s more about all of the legwork that went into this than the actual numbers,” he says. “It feels like another punch in the gut.”

Industry experts and multiple restaurant owners pinned the blame on liquor store lobbying efforts at the state level, which could explain how legislation supported by 78 percent of New Yorkers failed to pass. At least 15 states have made takeout alcohol sales permanent, but in New York that legislation has reportedly been tied up by lobbyists, who claim wine and liquor businesses — coming off one of their best years in recent history — are losing money to restaurants and bars offering booze to-go.

“Only in New York would elected officials ignore an overwhelming majority of the public,” Melissa Fleischut, president of the New York State Restaurant Association, said in a statement to Eater.