Merlot to-go could be back on the menu in New York state this year, giving an added revenue source to restaurants during hard times but worries to store owners concerned about competition. During her Jan. 5 State of the State Address, New York Gov. Kathy Hochul announced her support for the permanent legalization of alcohol to go, which would allow beverages like wine and cocktails to be sold for pick-up or delivery.
“Thousands of bars and restaurants, the souls of our neighborhoods, have had to close,” she said as she announced the proposal, calling it “something our bars and restaurants have been asking for … a critical revenue stream during the lean times last year.”
The initiative is part of Hochul’s nearly $10 billion recovery plan to help small businesses bounce back from the still-ongoing challenges of the COVID pandemic. While it won’t become law until the governor’s final budget is proposed in the spring and it’s passed by the state assembly and senate, members of the restaurant industry are hopeful.
“The New York State Restaurant Association is thrilled to see Gov. Hochul recognize the importance of permanently allowing alcohol to go for our struggling restaurants and bars,” Melissa Fleischut, the association’s president and CEO, said in a statement. “These are difficult times that are not letting up.”
Many restaurants relied on the added income of to-go drinks during the early days of the pandemic, a temporary measure allowed by former Gov. Andrew Cuomo. Those temporary privileges were permitted via executive order at the onset of the crisis in March 2020, and then promptly stripped (with minimal notice) when the order expired in June 2021. Legislation to make the privileges permanent failed, but now the proposal is looking more likely.
Alexis Percival, partner and co-beverage director of Manhattan wine bars Ruffian and Kindred, called to-go drinks “another tool in the toolbox for distressed businesses.” She says the direct impact won’t be quite as significant now that indoor dining is available, but it’s still a helpful source of revenue. And there are several other benefits on top of that, from making off-premise food orders more attractive as “one-stop shopping for dinner” to reopening opportunities for interactive beverage classes online.
“As variants wax and wane, we need flexibility to address customers’ immediate and changing needs to sustain sales,” she said. The law would also give customers greater access to wines that are hard to find at retail but available through restaurant cellars, one of the reasons legalization is popular with the public. A New York State Restaurant Association–sponsored poll found that 78 percent of New Yorkers support the permanent legalization of alcohol to go.
But retail outlets are not thrilled at the idea of more competition, and opposing lobbying groups are working to fight the plan before it becomes law. “This proposal will devastate our liquor stores, create a public health crisis, increase DWI incidents and underage sales, and upset the on- and off-premise system of distribution and sale of alcohol,” read a statement from MetroPSA, a group that advocates for liquor stores in New York. Lobbying groups have been quite effective in New York at preventing expansion of wine sales—efforts to legalize wine sales in grocery stores have repeatedly failed.
Percival says retailers’ concern about a damaging level of competition from restaurants is unfounded. “Liquor stores, like grocery stores, did incredibly well the last two years.” She points to a study by Columbia University which found that from March to September 2020 (while restaurants were selling alcohol to go), there were $41.9 billion in liquor store sales—a 20 percent increase compared to the same period in 2019. “Restaurants just won’t be able to divert that much from retailers,” she said.
Another reason for resistance has been fear of increases in crime and noise from customers drinking in the streets, outside restaurants. Percival believes that can be addressed. “In the long run, I think we can find a balance that trusts that 90 percent of the population can behave like adults.”
While the state awaits the decision, Percival and her team are focusing on improving their delivery models and taking stock of their to-go supplies from last year, like batched-cocktail containers, bags and stickers—“All things we invested in before the rug was pulled out from under us.”
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