Governor Kathy Hochul this week made a nice end-run around one of the state’s messiest bureaucracies when she took steps to allow bars to serve fans on Sunday morning as they watch their Bills play five time zones ahead in London. But officials, especially state lawmakers, still need to get serious about tackling New York’s archaic liquor rules.
Hochul ordered the State Liquor Authority, which regulates virtually every facet of alcohol sales and consumption, to give bars permission to apply for permission to serve patrons this Sunday. State rules generally prohibit alcohol sales before 10am on Sundays, and bars must otherwise apply for a waiver 15 days ahead of time. Put another way: an official act of the governor alone won’t be enough for bars and restaurants to get around New York’s red tape.
The SLA is one of state government’s most anti-business elements. The agency’s permitting process routinely forces small restaurants to hire lawyers if they want Albany’s blessing to serve beer or wine, and the SLA’s inability to renew permits in a timely fashion forces businesses to fork over extra cash for “temporary” ones. It’s also impossible to forget the SLA’s early-COVID crusade to make sure bars were serving food with beverages, as though chicken wings and curly fries had anti-viral properties.
State lawmakers aren’t rushing to fix this mess because they’re getting a political benefit. Senators and assemblymembers have a phone number they can call to get things moved along sooner when constituents complain—winning the pols gratitude instead of grief for failing to overhaul an agency under their supervision.
Business owners are generally reluctant to criticize the SLA because the agency has the power to crush their livelihoods and it would be hard for them to prove that the SLA was being any more anti-business toward them than the SLA is toward everyone else.
The agency, though, is only part of the problem. New York’s liquor laws over-regulate nearly every part of alcohol retail and consumption, putting both businesses and consumers at a disadvantage.
State law prevents liquor stores from selling beer—or tonic water, limes, or most of the other things customers might expect to find there. Stores and restaurants typically can’t buy directly from wineries and distilleries; instead, they’re forced to buy nearly every bottle through a cartel of politically wired liquor wholesalers, and restaurant owners face ridiculous rules that even prevent them from popping into the liquor store next door if they run out of product on a busy evening.
In 2014, the SLA went after an Albany-area store that was lawfully shipping wine to customers in other states, an innovative business practice that terrified the wholesalers. Unable to stop the store, the SLA sent letters to other states’ regulators urging them to harass the New York business for disrespecting their authority (again, entirely lawfully).
Liquor stores aren’t allowed to form chains or co-ops to build purchasing power against that cartel, and the lack of competition leaves consumers paying more and getting fewer choices. And after they get tired of jumping through the SLA’s hoops or dealing with the wholesaler cartel, a liquor-store owner isn’t allowed to sell his or her business to a competitor, and must instead cajole someone new to take over and begin the cycle anew.
Governor Hochul last year called for a “policy-neutral” overhaul of liquor laws, a bid to make it easier for businesses to comply with them. She later signed modest reforms, such as allowing restaurants to serve to-go beverages and for permit applicants to submit some of their paperwork electronically.
But a commission of industry players assembled to identify potential reforms predictably shot down anything meaningful—because any major improvement will come at the expense of someone benefiting from the status quo. As one member wrote in his comments, “the current system works great!”.
Businesses struggling to survive under that system—and fearful of criticizing it publicly—would beg to differ.