Exempts certain parcels of land from licensing restrictions prohibiting manufacturers, wholesalers and retailers of alcoholic beverages from sharing an…

◆ The sponsor's argument

Why Liz Krueger says this is needed

New York's Alcoholic Beverage Control Law prohibits a distributor (wholesaler) or manufacturer (including vineyards and wineries) from holding an interest, directly or indirectly, in a licensed retailer of alcoholic beverages, such as a restaurant or liquor store. Likewise, a retailer may not hold an interest, directly or indirectly in a distribu- tor or manufacturer. These are known as the "tied-house" laws. The original intent of these post-Prohibition statutes was to ensure that manufacturers and/or wholesalers of alcoholic beverages were not positioned to exert undue influence, or worse yet, monopoly power, over retail establishments. In fact, in most jurisdictions the danger to be avoided is spelled out more specifically by prohibiting undue influence and inducements between the manufacturer and wholesaler tiers and the retail tier of the "three-tiered" system in order to trigger a tied- house issue. New York, on the other hand, has a long tradition of strict interpretation that any relationship, however de minimis, is prohibited. While originally aimed at promoting competition, in today's highly complex corporate world, current law and its strict interpretation in New York creates unintended consequences especially where the evil to be avoided is not remotely present. The Legislature has regularly addressed these challenges by exempting certain properties in order to support rational economic development goals. Exemptions, such as those provided by this bill, are narrowly tailored to prevent undue market influence by identifying select locations using metes and bounds descriptions. This bill will allow an established New York corporation to consolidate a retail store to its New York headquarters as well as open a cafe at the same location. Product may not be purchased from the manufacturer to be sold at retail at either retail establishment.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.