WSWA Urges NY Legislators to Uphold 3-Tier System, But Bill Passes

The New York Assembly passed, 90-6, a bill limited the State Liquor Authority’s ability to penalize licensees who ship wine into other states in violation of their laws.

Passage comes nearly a year after Empire Wine was cited for sending wine to states where such direct shipments are illegal.

“This bill is about due process,” said the bill’s prime sponsor, Assemblyman Phil Steck (D), in a statement. “The New York State Liquor Authority is overstepping the bounds of its authority by attempting to enforce out-of-state laws for which they hold no jurisdiction. Anytime there is an abuse of power by an administrative agency, it is incumbent on the legislature to intervene.”

In a letter to every member of the New York legislature, Wine & Spirits Wholesalers of America president/ceo Craig Wolf, said the bill was virtually identical to a bill vetoed by the governor law year.

“Enactment of that legislation would signal the state’s abdication of its authority and responsibility to regulate and hold accountable beverage alcohol licensees subject to its jurisdiction,” Wolf said, adding that “at the time of his veto, the governor said the measure would have sent a “clear signal that New York is a haven for entities intent on breaking other states’ laws, avoiding other states’ legitimately imposed taxes and regulations, and selling to minors with impunity.”

WSWA noted that Empire Wine has for years shipped alcohol across state lines in violation of recipient states’ tax, licensing and direct shipping laws. The New York State Liquor Authority (NYSLA) has taken action to stop this practice under its broad authority to ensure its licensees act appropriately and legally, Wolf said.

Empire claims it has only acted as a willing seller to a willing buyer and that the practice has gone on for years. It has also argued that since other state regulators failed to bring them to justice, NYSLA should not do so either.

“Neither of those claims provides a legitimate defense to illegal direct shipping,” Wolf said, “so Empire went to the legislature in order to prevent the NYSLA from taking appropriate enforcement action against it.

“WSWA and our partners in the producer and retail tiers believe that effective state enforcement of licensees is the paramount principal of U.S. beverage alcohol laws rooted in the 21st Amendment, which ended Prohibition and allowed for strong, state-based regulation of alcohol. Under that authority, states can determine the regulations and structures that best fit their unique markets.”

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