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Proposed Wine Tax
Wineries worry about proposed 'at rest' law for distributors
Christopher Missick and his wife got into the wine business three years ago when they bought a winery along the west side of Seneca Lake. Last year he decided to break his Villa Bellangelo wines into the lucrative New York City market.
"We don’t have access to the huge distribution houses down there and we work with, for the most part, really high quality, but small family distributors," Missick said.
Missick’s distributor and other small operations working in New York City have their warehouse across the river in New Jersey, where real estate is cheaper.
This year, lawmakers in New York are considering the implementation of what’s called an ‘at rest’ law, which proponents say will generate better competition and create jobs in the state.
Under an 'at rest' law, bottles of wine and spirits would have to sit in New York state for up to 48 hours before they could be sold. While the direct impact will be on distributors working mainly in the New York City area, many upstate wineries like Missick's are worried about losing business.
Opponents say the legislation would add up to $2 a bottle in passed-on expenses. Missick says that could be a deal breaker, given his wine is already more expensive than competitors.
"It just seems like one of those initiatives that I have to say is really thought out, or not thought out. It’s one or the other," he said. "It’s only going to hurt a burgeoning industry."
Opici Family Distributors has a warehouse in East Syracuse as well as in New Jersey, which already has 'at rest' laws (so does Connecticut). An 'at rest' law in both states will mean duplicating their operations and "kneecap" the company's efforts to sell boutique wines, said president Dina Opici.
"Many of the over 180 wholesalers in the state of New York who warehouse in New Jersey will not be able to stay in business as a result of this legislation," she said.
State Sen. Jeff Klein, R-Bronx, says that argument is "nonsense."
"You shouldn't be abating our tax laws and you shouldn't be hurting jobs in New York at the expense of jobs in New Jersey," Klein said about wholesalers who store their wine and spirits in another state.
Opici and other small distributors have teamed up to launch a campaign against the bill. The Stop the Cork Tax alliance points the finger at big distributors like Empire North for wanting the law. They say the larger operations are trying to drive them out of business. Empire North declined to comment.
Wineries already selling through big distributors with warehouses in the city are generally okay with the law.
Brooklyn Assemblyman Joe Lentol is a co-sponsor of the bill, but a spokesperson said the assemblyman has become sensitive to the other side’s concerns. Gov. Andrew Cuomo has asked Empire State Development to look into the economic impact of an at rest law, a spokesman for ESD said, but the study hasn’t been released yet.