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Morelle Update 060509
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Legislative Update

By Todd Vandervort

June 5, 2009


Morelle / Krueger Bill Introduction


Assemblyman Morelle introduced A.8432, the “wine industry and liquor store revitalization act”. Just today the bill gained a Senate sponsor, S.5787 by Senator Liz Krueger. This legislation has many components which are outlined below:

- permits liquor stores to sell items complementary to their business, including bottled water, juice and soda, tobacco products, cigars, certain publications, gift bags and baskets of glassware which are related to the consumption of alcohol

- allows liquor stores to install ATM machines

- provides for multiple licenses

- authorizes liquor stores to sell to bars and restaurants 

- provides for a limitation on the number of licenses issued

- creates a "medallion" system, through which existing store owners will be able to auction off their existing licenses to the highest bidder and sell the one additional license this section allows them to obtain from the State Liquor Authority

- the SLA is authorized to auction 15 licenses every two years to generate revenue for increased enforcement/licensure demands

- allows grocery and drug stores to sell wine with an annual fee of $110

- any person under eighteen years of age may handle the wine and a cashier under eighteen years old must be under the supervision of a person who is at least eighteen years old

- requires proof of age to be provided at every sale of alcoholic beverages

- allows for expanded hours of operation of a liquor store

- permits cooperative agreements so that smaller liquor stores may agree to jointly purchase larger quantities at a reduced cost

- authorizes the SLA to issue multiple licenses

- removes advertising restrictions within the licensed premises

- provides further opportunities for wine tastings

- authorizes grocery stores and drug stores under 1,000 square feet to purchase wine from stores licensed to sell such product -

- provides for temporary permits so that premises awaiting licensure and renewals may continue to do business uninterrupted by the extended SLA licensure process

- provides for the sale of mixed cases of wine for resale

According to the sponsor, this legislation is expected to provide $105 million in 2009-10 through various franchise fees, excise taxes, sales taxes and license fees. In 2010-11 it is expected that this proposal will generate $54 million and $3 million each year thereafter.

Morelle recently amended the Assembly bill to remove language that would have allowed for the sale of beer among the additional “complementary” items that a licensed premise could sell. The Assembly bill was referred to the Assembly Economic Development Committee, which is chaired by Assemblyman Robin Schimminger. I met with him to discuss the bill and feel very confident that the bill will not move from his committee. The Senate bill was introduced into the Senate Rules Committee. 

We will provide Assemblyman Morelle and Senator Krueger, and the other bill sponsors, with our comments in opposition to this legislation, which is yet another attempt to put wine in grocery stores, among numerous other things. Our position hasn’t changed and we will not agree to proposals that seek to change the way we do business, or that will allow for the sale of wine in grocery stores. We will continue to communicate with all legislators on this issue, and to oppose all proposals that come before us, despite the continued efforts of the grocery and convenience store chains. 

The National Federation of Independent Business (NFIB) is also conducting a survey of their members about this bill. We expect the results to be just as favorable as the previous survey they did on the Governor’s proposal to sell wine in grocery stores. 

ACTION ALERT: We have been lobbying some of the co-sponsors of the bills to ask them to remove their names from the bill. Assemblywoman Fields has already committed to removing her name, and others are very likely to do the same. We are going to ask Association members that attended Lobby Day to contact the legislators that they met with who indicated their support of our issue, but are listed on the Morelle/Krueger bills. We will reach out to you early next week to provide you with talking points. 

Legislation to Allow the Sale of
Tonic Water, Bitters and
Maraschino Cherries in Liquor Stores

Another piece of legislation that has had some activity is this past week is S.4044-A / A.7188-A, introduced by Senator Squadron and Assemblyman Kavanagh. This bill allows for the sale of items in liquor stores that are typically associated with alcoholic beverage consumption including tonic water, bitters and maraschino cherries. 

We are actively opposing this bill for the same reasons we did not support Senator Espada’s bill that would have allowed for food items to be sold in liquor stores:  most retail stores are owned and operated by small, independent business owners with limited space available; liquor stores do not have the infrastructure or the desire to sell these types of items; and in this case, liquor stores would have to manage the bottle deposit on tonic water containers, which would add cost and complexity to conducting business. 

The bill was placed on the Senate Commerce Committee agenda and was referred to the Senate floor. It is now on third reading on the calendar. We have been actively lobbying this bill and will request that it not be brought up for a vote. In addition, we feel very confident that the Assembly bill will not pass out of Assemblyman Schimminger’s Economic Development Committee. 



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