In the many efforts to close the budget gap in New York, Governor Patterson is proposing to free the sale of wine to supermarkets. It is unfortunate that this only being discussed now that the government needs money. There are no good reasons why supermarkets aren’t allowed to sell wine now. Ideally, any store that wants to sell wine should be allowed to.

Why do wine and liquor stores get a monopoly? We know that monopolies are bad. The more competition there is in the market, the better it will be for the end consumer–us.

I’ve seen little flyers at my local supermarket in support of this and I’ve heard the arguments against it. Those against the freeing of wine sales have a weak case at best.

“In addition to charging grocery stores franchise fees of varying amounts for the right to sell wine, it would nearly triple the excise tax on wine sales and eliminate financing for the New York Wine and Grape Foundation, a trade group.”

An increase in excise taxes is a bad thing but the elimination or reduction of government financing for the New York Wine and Grape Foundation is perfectly fine. Why do they need subsidies in the first place? If the foundation cannot exist without government aid then it shouldn’t exist at all. The active participants in the wine industry can maintain their own foundation.

As a consumer, I would love it if I could buy wine at my local supermarket. However, I wouldn’t expect any specialty wines at a supermarket. There will always be a market for specialty wine and liquor stores. It will likely be a smaller market and their business models may have to change but, that is how business is. There is never a guarantee that your market will stay the same forever nor a guarantee that you will stay in business forever.

The mere fact that the government grants wine stores a monopoly on the sale of wine makes consumers worse off. The availability of wine will increase and the price will decrease. This is better for the wine industry as a whole as the market will expand.

“A coalition known as the Last Store on Main Street, representing 2,742 New York wine sellers and liquor store owners, says the move would force more than 1,000 such stores out of business and lead to a loss of more than 4,000 jobs.”

Those who lose their jobs due to this can find jobs elsewhere. There is no reason why millions should suffer just because thousands will lose their jobs. The benefit to society is greater than the loss.

“I’m a parent,” he said. “For the 25 years I’ve been in business, I’ve been extremely conscious of people who try to buy liquor when they’re not legally entitled to it. So I’m concerned kids might be able to get alcohol more easily. I don’t want those kids on the road.”

The argument of an increased sale of alcohol to minors is asinine. Supermarkets already sell beer and card their patrons. The process of the sale of beer can just as easily be applied to the sale wine. This is clearly a moot point. Ideally, there would be no age restriction on the purchase of alcohol but, this is the society we live in.

“And are more people going to drink more wine just because it’s in a grocery store? I don’t think so,” Mr. Massoud said. “I think the demand is finite.”

That is just a gross misunderstanding of economics. Demand is always infinite. It is supply and price that keeps demand in check. We always want more things. If prices are lowered, demand will go up. It is an absolute certainty that more people will drink wine if it was more widely available and cheaper.

It is about time NY got rid of the wine monopoly. It will be better for all of us.

By Tommy Leung

Tags: david patterson, Grocery store, Liquor store, New York, New York wine, sale of wine, Supermarket, Wine

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