Legislation Would Permit Bars and Restaurants to Purchase from Local Liquor Stores

Throughout New York State, a type of conversation occurs all the time between customers and employees at bars and restaurants. The patron requests a particular brand of alcoholic beverage, and the worker says that they’re out of that specific drink. Upon hearing this, the customer is mystified, because they believe that all the establishment has to do is send someone to the liquor store down the street to restock that particular beverage. Of course, owners of bars and restaurants know that doing so would violate the law. 

Now, in a promising development for New York State’s hospitality industry, legislators have introduced a budget proposal aimed at easing operational burdens for bars and restaurants by allowing them to purchase up to 12 bottles of alcohol per week directly from local liquor stores. This measure represents a significant departure from the current regulatory framework, which mandates reliance on a small number of state-authorized wholesale distributors. 

Under what is known as the three-tier system, producers and importers are required to sell alcoholic beverages to licensed distributors, though a few exceptions exist. From there, bars, restaurants and liquors must then purchase what they plan to sell from those distributors. This restriction not only limits choice but often results in higher costs due to reduced competition as two large distributors dominate business in the state. 

Moreover, the reliance on a duopoly of distributors can lead to supply chain issues, particularly during peak seasons or unexpected disruptions. The Senate’s budget proposal seeks to alleviate these pressures by allowing bars and restaurants to diversify their purchasing options. By permitting direct purchases from local liquor stores, establishments can potentially lower costs and gain access to a wider range of products. This shift would likely inject much-needed flexibility into the market, empowering businesses to negotiate better deals and adapt their inventory to meet consumer demand more effectively.

Unlike some proposals involving changes to State Liquor Authority rules that pit the interests of bars and restaurants against local liquor stores against each other, allowing small-batch purchases seems to help both sides. This change might also lead to a broader discussion regarding the state’s liquor licensing laws and ways to balance the interests of producers, importers, distributors, retailers and hospitality establishments. Keeping up with the latest changes in New York’s alcohol regulations can help you take advantage of new opportunities and avoid penalties for violations, so you should work with an experienced liquor licensing attorney. 

The Law Office of Stacy L. Weiss advises clients throughout New York State on all types of legal matters involving the production, distribution and sale of alcoholic beverages.  Please call 212-521-0828 or contact us online to make an appointment for a free consultation. Our office is in Manhattan.