Owners and advocates of legacy wholesale beer stores fear that a proposed loosening of their state liquor authority licenses will start the clock toward their business’s destruction.
A clause in Gov. Kathy Hochul’s proposed 2027 executive budget would let the state’s liquor authority issue new “C” licenses, which allow for the wholesale and retail sale of beer, for the first time since the early 1960s. Many C license holders feel the proposed reissuance of licenses would open the door for wholesale alcohol corporations to swoop into local communities and outcompete the familiar beverage stores.
“It would put all of the small beer distributors out of business,” Neil Mannella, owner of Superstar Discount Beverage Center, said about the proposed change.
To Mannella, whose family has owned Superstar stores in communities like Bayport, Great River, and Coram since 1992, the transferable and limited nature of C licenses has made New York an “independent” alcohol-selling state, with customers more likely to shop at mom-and-pop liquor stores than at big-box retailers.
The state originally created C licenses to allow wholesale beer distributors to sell inventory to their employees after work or for special occasions, but now many of the roughly 300 C license holders are local beer retailers, who, advocates say, play an integral part in community-building through local fundraising, sponsorships, and other initiatives.
“We have a long history with all our communities,” said David Schultzer, Bellport Chamber of Commerce vice president and former owner of Bellport Cold Beer & Soda. “We help out the fire departments, the chamber of commerces the village halls.”
Schultzer said the decades of relationship building between local beer businesses and municipalities and organizations have come in handy during emergencies, like during Hurricane Sandy, when Schultzer said he sold ice to businesses in need at lower rates than other larger stores.
“Whole Foods, Total Wine [aren’t] going to have fundraisers for some local guy who shattered his femur and can't work for the next two months,” Schultzer said.
According to a spokesperson for Gov. Hochul, the proposed license reform was introduced to allow the State Liquor Authority to consider new license applications in parts of the state where C licenses have dried up due to store closures and to meet “unmet consumer demand.”
“Gov. Hochul remains committed to supporting and uplifting small businesses across the state as she continues to negotiate in good faith with the state legislature to deliver a budget that makes New York safer and more affordable,” a spokesperson for the governor said.
But many business owners feel the state’s proposed license reform was the result of corporate lobbying in favor of big-box retailers.
Denny Salas, senior vice president at Gotham Government Relations, is representing the beer business owners’ concerns in Albany throughout the budget process and said that similar deregulatory measures in other states have done more harm to local consumers.
Salas pointed to a 2019 American Public Health Association editorial that said following Washington State’s liquor privatization in 2012, prices for liquor rose 15.5 percent for 750 ml containers compared to pre-privatization levels in just two years, higher than neighboring states that didn’t change.
Business owners and advocates like Salas, Schultzer, and Mannella also said the governor’s proposed change in her budget came suddenly, a few weeks ago.
“There was no forewarning, there was no discussions, there was no nothing,” Mannella said.
Over the last week, Mannella and his fellow owners have been informing their customers and elected officials about the potentially damaging reform.
State assemblymember Jake Blumencranz from Nassau County was the first elected official to publicly oppose the license reform and visited Hicksville Beer and Soda, where customers collected over 200 signatures in solidarity against the license change in a few days.
“Gov. Kathy Hochul’s proposed state budget quietly puts businesses like this at risk, threatening family livelihoods and handing an advantage to big-box chains,” Blumencranz said on Instagram.
Store owner Andrew Preston, 37, has owned the Hicksville store for 14 years after working there himself.
“When I got out of college, I was offered a job as a financial advisor. I went two days in a suit and tie, and I just realized this was not my thing,” Preston said. “I said I wanted to own a beer store, and I was fortunate enough to have people that believed in me, to loan me money, to give me the opportunity to do such a thing.”
“It has provided more for me and my family than I ever could have imagined through a lot of hard work,” Preston added.
Preston also compared his industry’s current challenge to the plummeting value of New York City taxi medallions, which peaked at over $1 million in 2013 but fell to just over $100,000 by the end of the decade due to the rise of ridesharing apps.
A dialogue between business owners, advocates, and state officials recently started, with an attempt at understanding each perspective
Henry Kane, director of the New York State Association of Beverage Centers and owner of Bay Shore Beer, said he attended a meeting with the officials regarding their concerns and that, while each side presented its case, the state isn’t appearing to budge as of now.
The governor’s office said that discussions with the legislature and stakeholders regarding the whole budget are still ongoing, and that their goal is to ensure any updates to licensing are implemented carefully and support existing businesses.
For business owners like Manella of the Superstar beverage chain, the fight won’t stop until they can protect their industry.
“We've seen this with other big box stores that have come into communities and destroyed local small businesses,” Mannella said. “[If] we tell our story, then I believe we will be successful.”
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