Posted on | May 5, 2013
Written by | Paul Santelle
After reading AJ Sabath’s guest column in the Star-Ledger on March 28th, it is clear his narrow perspective is that of someone with a political agenda and no direct qualifications in our state’s alcohol industry. He is a paid lobbyist employed by the New Jersey Food Council; and as the executive director of the “Retailers for Responsible Liquor Licensing” (RRLL), he represents less than a handful of grocery chains, led by Wegmans.
The vast majority of his writing is gross misrepresentation. The reality is New Jersey’s independent retail model—enabled by the level playing field that is the two-license system—is considered to be exemplary, with over 47,000 products available, more than any other state in our country. And although we are nationally ranked 11th in population, we rank #5 in total alcoholic beverage sales based on volume. Our lawmakers and our industry have been continuously committed to insuring the safety and general welfare of our public as well as the stability of our marketplace. Until Wegmans, New Jersey’s system of alcohol control and distribution has never seen such a reckless challenge since the deregulation of our industry in 1980.
Mr. Sabath refers to the “liquor lobby” as if it were comprised of the super-wealthy. The fact is the “liquor lobby” is nothing more than an association of state-based small business owners who have dedicated their lives working tirelessly in their stores while serving their local communities in a very stressful and highly regulated industry.
In stark contrast to Mr. Sabath’s take that nothing has changed in 50 years, in fact our State’s liquor laws have frequently been updated to adapt to consumer trends as well as the nationalization and globalization of our industry. Just last year saw the passage of the Winery-to-Consumer Internet Direct Shipping Legislation; and the year before saw legislation pass to permit in-store educational consumer samplings of beer, wine and spirits.
Opposite of Monopoly
Mr. Sabath’s compares New Jersey to a monopoly. Our retail model is the opposite of a monopoly, having 1,800 independently owned and operated stores directly competing in one of the most competitive marketplaces in our country. The fact is, based on our state’s est. 2012 population of 8.9 million we should have roughly 1,200 retail distribution licenses (one for every 7,500), but we actually have 50% more. The truth is that we have too many liquor licenses that are a hangover from the post-Prohibition era when licenses were issued with minimal restrictions. The combination of those excess licenses with the onslaught of national chain restaurants and out-of-state grocery stores selling alcohol has taken us in just a few short years from one-sixth to one-third of all of our state licenses now being on “cash on delivery” (COD). COD is when licenses have lost their credit terms with their wholesale suppliers and are more than likely on dire straits.
And in contrast to Mr. Sabath’s misleading representation of the impact of grocery stores selling alcohol in the Paramus area, the fact is that many of the small independent liquor stores were forced to sell their businesses for a loss, while others are now on COD and struggling. It’s insulting to anyone who owns and operates a small business to have the likes of a paid lobbyist totally twist and misrepresent their hardship.
Continuing on the factual front, in stark contrast to AJ Sabath’s mis-statements: like ShopRite liquor stores, all Buy-Rites, Bottle Kings, Joe Canals and Spirits Unlimited are franchises that are independently owned and operated, with no one person or corporate entity controlling more than two (2) licenses. They simply cooperatively advertise together which promotes and fosters small “state-based” business opportunities through franchising—which is the opposite of monopolizing!
Finally, New Jersey does not discriminate when it comes to the sale of alcoholic beverages, period. New Jersey permits the sale of beer, wine and spirits in grocery stores, warehouse clubs, pharmacies and just about any other type of mercantile business—which is not the case in the overwhelming majority of those 46 states Mr. Sabath flags as examples.
In short, New Jerseys’s system works. Our state’s two-license limit law ensures a level playing field and fosters responsible business practices that support an entire retail sector dedicated to the sale of a very serious controlled substance—alcohol, not bread, not butter and certainly not milk!