Liquor Sellers: Price Hikes May Result From Spitzer Probe of Industry Favoritism
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Some city spirit sellers are warning that price hikes could result from an investigation into favoritism in the liquor industry by the state attorney general, Eliot Spitzer.
Mr. Spitzer is looking into whether liquor wholesalers have violated state regulations by offering discounts and other perks to some retailers, but not all. Some top retailers say the probe has caused wholesalers to eliminate discounts for buying large quantities of wine and liquor, Crain’s New York Business reported in this week’s edition.
The wine director of a large retail store, Crush Wine & Spirits, told Crain’s that 60% of the items the store bought had increased in price since the probe started. That spike is likely to hit consumers, too. “There is only so long I can take the squeeze,” the wine director, Lyle Fass, told Crain’s.
The head of Zachys, one of the New York area’s largest wine and liquor retailers, also told Crain’s that wholesale prices had gone up. “I buy 50 and 100 cases of one product, but now I’m paying more, because those big deals aren’t being offered anymore,” the president of Zachys, Jeff Zacharia, said.
The attorney general launched his investigation last month, serving subpoenas to several of the largest wholesalers in the state. The probe came after reports surfaced that wholesalers and manufacturers illegally were providing select businesses with trips to wineries, gift certificates, and large discounts. Wholesalers are required by law to post their price listings publicly.
Some store owners yesterday disputed predictions that consumers would face higher prices for liquor, or that any increases would result from Mr.Spitzer’s investigation. “I don’t see how that affects the industry in any way, shape, or form,” the owner of Long’s Discount Wines & Liquors in Bay Ridge, Michael Long, who is also chairman of the state Conservative Party, told The New York Sun.
The executive director of the Metropolitan Package Store Association, an industry trade group, also dismissed fears that an investigation would trigger price increases for consumers. “I can’t believe that these multimilliondollar corporations would have to raise their prices because they had to hire a lawyer,” the director, William McDevitt, told the Sun.
