Bottle Bill Overhaul, RTD Expansion, Wine in Supermarkets Dominate Albany Agenda

The NY State Legislature will return to session in January with a full menu of proposed laws that will impact the beverage business, including a bottle bill overhaul, expanding the availability of ready-to-drink-cocktails, allowing supermarkets to sell wine, and streamlining the Alcoholic Beverage Control Law (ABCL).

Here's a summary:

Bottle Bill. The so-called bigger, better bottle bill, the frontrunner among many proposed bottle bill amendments, would increase the deposit and handling fee, dramatically increase what beverages are covered, and make other significant changes. The bill would:

• Increase the deposit to 10 cents effective 4/1/27.
• Increase the handling fee to 5 cents immediately, 6 cents on 4/1/27 and 6.5 cents on 4/1/32.
• Expand coverage in two steps, to non-carbonated soft drinks, non-carbonated fruit/vegetable juices containing less than 100% fruit or vegetable juice, coffee and tea beverages, and carbonated fruit beverages on 4/1/27, and on 4/1/30, to wine, liquor, more: "any drinkable liquid intended for human oral consumption" except drugs, infant formula; meal replacement liquid; dairy products derived from animal milk; plant-based dairy alternatives; and non-carbonated 100% fruit or vegetable juice.
• The bill would also tighten up redemption center registration and fund grants to municipalities, non-profits and small businesses to defray the costs of RVMs or other expenses related to processing empty containers.

RTDS. One proposal would allow all off-premises retail beer licenses (including Cs) to sell Ready-to Drink Cocktails (RTDs) at retail, and Cs to sell RTDs at wholesale. An RTD is defined as a "beverage containing liquor which is added to concentrated or unconcentrated juice, flavoring material, water, citric acid, sugar, and/or carbon dioxide, that contains not more than eight and one-half percent alcohol by volume, and that is sold in single serving containers with a size no greater than sixteen ounces each." Another proposal would add RTDs to the bottle bill within 18 months.

Wine in Supermarkets. Supermarkets, defined as stores of at least 4000 sf, at least 65% of revenue from the sale of food (thus eliminating warehouse stores, Walmart and Target) and not within 500 feet of a liquor store to sell wine at retail for off-premises consumption.

ABCL Reform. A pending bill would make significant changes in the Alcoholic Beverage Control Law (ABCL), including proposals that would:

• allow wine/liquor stores to sell complimentary items like tonic water, bitters, maraschino cherries.
• allow individuals to hold <2 off-premises retail wine/liquor licenses.
• relax the standard for issuing new off-premises wine/liquor licenses.
• round off numbers in licensing fees.
• expedite approval of corporate changes (automatically approved if SLA doesn't act in 90 days).
• allow temporary wholesaler permits when transfer applications are pending.
• modify the 200' and 500' rules for retail on-premises licenses. The 200' rule prohibits issuance of license on the same street and within 200' of a school or place of worship. This proposal would allow the SLA to approve the license if the school or place of worship supports the issuance. The 500' rule prohibits a license when the premises are within 500' of three or more existing licensed premises. This proposal would give the SLA discretion to issue such a license in New York County (Manhattan).

NYSABC Priorities.

Bottle Bill Study. While the "bottle bill" (officially the Returnable Container Act, or RCA) has achieved some of its goals, there are many problems with its operation, especially on the back end of container return.

Before expanding the law's coverage and tacking piecemeal changes onto the rickety structure of this 40+ year-old law, the state should commission a comprehensive independent study of:

• New York's experience with the RCA.
• The experience of the 9 other states with RCAs, at least 4 of which (California, Michigan, Maine, and Iowa) are now updating their RCAs.
• The effects of expansion on businesses, especially adding wine and liquor.
• Increase in deposit and handling fees.
• Dedicating more of the unredeemed to support the RCA.
• Redemption fraud.
• More effective ways to collect and count empties from dealers and redemption centers, such as state-supported collection cooperatives, which would allow commingling of containers and eliminate the expensive and labor-intensive need to sort by brand.

The study should be conducted by a neutral, independent agency, in a forum in which all stakeholders can participate, and should result in comprehensive recommendations that would make New York's RCA work more effectively, and more fairly, for the environment, for consumers and for businesses.

RTDs. We support the proposal to allow all off-premises beer licenses to sell RTDs. Wine and liquor stores adamantly oppose the expansion of RTDs, which they now have exclusively. In the event they fight expansion to a standstill, we have suggested a compromise: if the privilege of selling RTDs is extended to any other license category in addition to liquor stores, it should be only to C licenses. Here is why:

• We are alcohol-first destinations.
• Most of our store sales are 90% beer.
• We have long experience in selling age-restricted products, and the best record of any license category for policing underage sales.
• We have a financial stake in our licenses. If we lose our beer license, we are out of business, we cannot survive by selling soft drinks and the limited range of snack foods and other products we are allowed to sell.
• We already sell similar beverages made with malt-derived alcohol, many with ABV higher than the typical 6% for RTDs.
• Our relatively few stores do not represent an existential threat to small liquor stores.
• We are the bottle bill container redemption experts. We have been doing the heavy lifting on container redemption for over 40 years, as free-standing redemption centers have not proven to be economically viable. When as is likely the bottle bill gets extended to RTDs, and we sell them, we can take the empties, taking pressure off the liquor stores.

Wine in Supermarkets. If supermarkets get the privilege of selling wine, Cs should get it as well, for the same reasons set out above for getting RTDs.

In addition, NYSABC will continue playing defense on bottle bill changes and other proposals that could negatively impact our businesses; representing C licenses in the legislature, at state agencies like the SLA and DEC; and making sure we have a "seat at the table" when law or policy changes are considered.