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By Nicole Gelinas

After The Fall: Saving Capitalism From Wall Street--and Washington


Nicole Gelinas
Could Drive You to Drink
Albany butts in, “protecting” New Yorkers from good, affordable Italian wine.
Spring 2014
Photo by Alex Brown

Like many good businesses, Eataly, a huge Italian food market near Madison Square Park and 23rd Street, filled a need that its customers hadn’t known they had: in this case, for quality prosciutto, cheese, anchovies, and grass-fed meat, all just a long walk or a short bike ride away. And, yes, wine: no other small local store that I’ve found stocked the range and variety of Italian wines available at Eataly’s separate wine shop, at good prices.

But now, Albany, via the State Liquor Authority (SLA), will shutter Eataly’s wine store for six months and levy a half-million-dollar fine. Why? Eataly didn’t sell counterfeit wine, peddle to minors, fail to pay its workers minimum wage, or dodge taxes. It even bowed to a New York law that bans supermarkets from selling wine—thus, Eataly’s small, separate wine space, an inconvenience for customers. Rather, Eataly ran afoul of a law that prohibits wine stores from also producing and distributing wine.

Everyone should obey the law. Still, the law is a bad one. Its point, ostensibly, is to protect New Yorkers from monopoly. Wine importers, by eliminating the middleman and selling directly to the public, could undercut independent retailers and jack up their own prices after those retailers go under. (Of course, when it hikes alcohol taxes, the state says that it’s protecting us from drinking too much.) The upshot of the law, though, is that a unique business such as Eataly cannot showcase the products it imports from its own vineyards. Eataly provided New Yorkers with more wine choices, though in part by breaking the state law.

If New York consistently enforced its liquor laws, its crackdown on Eataly might not be so outrageous. Yet residents of the same neighborhoods that Eataly serves can testify that the SLA isn’t exactly Inspector Javert. Some of the city’s rowdy bars and nightclubs—in business only through the liquor authority’s good graces—regularly harm citizens’ quality of life and contribute to crime. Good luck getting the state to revoke their liquor licenses. Yet the SLA has chosen to go after a wine store that bothered no one. People bought wine and drank it at home in civilized fashion—not whooping, singing, falling, vomiting, or getting into street brawls, as bar patrons often do.

Nor is New York fair when it comes to other wine matters. Governor Andrew Cuomo has given special advantages to wine produced in New York, letting state wineries sell their products at their own outlets. The wineries also enjoy, thanks to Cuomo, exemptions from “burdensome tax filing requirements.” New York wine growers will even get their own prime retail space, thanks to Cuomo: an outlet at the MTA-owned Grand Central Terminal, coming soon.

Eataly should have followed the law—and should not have engaged in deception, as the state alleges. But the punishment doesn’t fit the crime. Eataly’s salespeople are uniformly knowledgeable and friendly; the state shutdown endangers their livelihoods and punishes customers. Something is amiss when a law meant to protect the public succeeds only in annoying the public.

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