Governor's Actions Will Help Reduce Business Costs and Increase Economic Activity for the Industry
Albany, NY (October 24, 2012)
Governor Andrew M. Cuomo today hosted New York's first Wine, Beer and Spirits Summit where he announced plans for a new marketing campaign to promote state-produced wine, beer, cider and spirits sales and tourism, as well as a series of regulatory reforms that will significantly reduce business costs for beverage producers.
The Wine, Beer and Spirits Summit was attended by dozens of beer, wine, cider, and spirits producers, as well as farmers, industry officials, and tourism experts, who discussed with state agency officials and members of the Governor's Cabinet specific legislative and regulatory issues facing the beer and wine industry. The participants also explored new ways for the state work as a partner to further solidify New York's position as a leading hub of beer, wine and spirits production and tourism.
"Over the past 22 months, my administration has focused on opening New York's doors to business and improving our state's business climate to support growing industries so we can create jobs and grow the economy," Governor Cuomo said. "New York's vibrant beer, wine, cider and spirits industry supports thousands of jobs across the state and is a major driver of tourism in many communities. The important discussion held at this summit and key reforms that resulted continue our work as an entrepreneurial government to partner with the private sector to help key industries thrive and prosper."
New York is home to more than 450 wineries, breweries, distilleries, and cideries, and many more new businesses open every year. Wine, beer, spirits, and cider producers account for more than $22 billion in annual total economic impact in the state and support tens of thousands of jobs statewide. The state ranks third in the nation in wine and grape production, has the second-most distilleries, and three of the top-producing 20 brewers in the United States are located in New York.
The state's agriculture industry – from hops producers, barley growers, to vineyards – plays a vital role in producing the commodities needed to create beer, wine and spirits right here in the Empire State. Investing in and finding ways to support the beverage industry benefits not just wine, beer and spirit producers, but for farmers and equipment makers statewide.
After listening to a presentation by business, agriculture, and community leaders, the Governor made the following initial announcements, laying out specific steps that state government can take now to improve industry marketing and reduce burdensome regulations.
Promotion and Tourism
At the Summit, business and industry leaders identified a need for New York State to strengthen promotion and tourism efforts targeted at beverage producers. New York currently lags behind other states in promotional campaigns specifically targeted at increasing tourism and promoting state-produced wine, beer and spirits.
To address this issue, Governor Cuomo an aggressive promotion and marketing campaign that will include:
- The state will provide $1 million dollars for a new advertising campaign to promote the industry. The state will increase funding - leveraged on an industry match – by up to $2 million, bringing the total marketing campaign to $5 million.
- To help New York's wine, beer and spirits producers penetrate major markets, like New York City's restaurants and, the Governor announced a working group led by Secretary to the Governor Larry Schwartz that will coordinate specialized, annual marketing events – similar to Restaurant Week and trade shows – that partner restaurants and hotels across the state with producers of New York-produced wine, beer, spirits, and food.
- The state will aggressively work to find new ways to promote New York State-produced beer, wine, spirits and cider at the annual State Fair.
- The state will also look into ways to ensure that alcoholic beverages sold at New York Racing Association tracks are produced in New York.
Single Point of Government Contact
Beer, wine, and spirits manufacturers and wholesalers raised concerns at the Summit about the number of different state agencies that they must deal with, not only to go into business, but to stay in compliance. These businesses, many of whom are small and do not retain attorneys on a full time basis, do not know what agency they must deal with for a particular issue and therefore can be unnecessarily subject to avoidable fines.
To address this issue, the Governor announced that a one-stop shop will be established within Empire State Development, so the industry has a single point of contact and place to call for all assistance. Designated staff from the agencies involved in regulating manufacturers and licensees, including the State Liquor Authority, Department of Agriculture & Markets, Tax and Finance Department, Labor Department, Department of Energy Conservation, Health Department, and Transportation Department, would coordinate with the one-stop-shop to respond to inquiries, host educational and training programs, and resolve problems for the licensees.
Although the state has undertaken a series of regulatory reforms to reduce burdens facing businesses including beer, wine, and spirit manufacturers, the discussion between Summit attendees revealed additional actions that could be taken to help the industry grow, while keeping in place important protections. The Governor announced the following regulatory reforms, most of which will be implemented immediately:
- Ending prohibition against multiple manufacturing licenses at the same location: Under existing regulations, producers of multiple types of alcoholic beverages must have separate licenses and separate premises for each type of beverage, and with the exception for wineries and farm wineries, multiple-beverage manufacturers cannot share facilities. Recognizing the tremendous additional burdens that would be placed, for example, on a small brewery that wanted to also make whiskey – including building a completely separate facility – the Governor directed SLA to eliminate this prohibition and allow the same manufacturer to have multiple licenses at the same location, or multiple manufacturers to have licenses at the same location.
- Allowing craft manufacturers to sell bottles when they are conducting tastings: Under existing law, farm distillers, farm wineries, wineries, cider producers, and farm brewers can sell the alcoholic beverages they produce with NYS ingredients at county fairs and farmers markets. While some of these manufacturers can also sell by the bottle at the State Fair and certain tastings, there are a number of other events, such as street fairs and charity events producers can provide samples, but not sell their beverage by the bottle. To remedy this burden and provide manufacturers with new venues to sell their products to consumers, the Governor announced that SLA producers to sell "by the bottle" at events where they are currently allowed to conduct tastings.
- Allowing beer and cider producers to obtain temporary permits to sell at special events/street fairs: New York producers are eligible for one day, special event permits for the sale, "by the glass," of beer and wine at events such as a street fair. These permits are available only to non-licensed individuals or organizations holding an event as well as retail licensees. The actual producers, such as brewers, are not eligible for these permits because the law generally prevents manufacturers from selling directly to consumers. While legislation signed this year by the Governor allowed small wineries to obtain the permit for any special event, other producers have not been able to enjoy the same benefits. The Governor today announced that SLA will expand eligibility guidelines so craft brewers and cider producers will be able to join craft wineries in selling their goods at street fairs, charitable events and other popular events.
- Reducing fee for manufacturers' marketing permits: At the Governor's direction, SLA will reduce the fee for its three-year manufacturers' marketing license from $750 to $125/year.
- Reducing license application requirements for manufacturers: Currently, the amount of documentation that producers must submit during the application process can be a heavy burden on businesses. At the Governor's direction, SLA will waive the submission of certain documents not pertinent to a manufacturer's application, such as detailed diagrams; multiple bank statements, and information already on file.
- Eliminate Duplicative License for Distilleries and Breweries: Currently, farm distilleries and farm breweries must get a permit from the Department of Agriculture & Markets in addition to an SLA license, costing an extra $400. The state already exempts farm wineries from this license requirement, and the Governor today announced that all farm breweries and farm distilleries will also be exempted.
A working group led by Secretary to the Governor Larry Schwartz will be formed to continue to review SLA regulations.
Industry representatives described during the Summit how Canadian wine tariffs have had a negative effect on New York produced wines. The Governor announced that the state will form a working group to help find solutions.
There are federal and statutory limitations to updating beer and wine trails as wells as strict federal rules on some road signage. The Governor announced that the state will establish a working group to create new trails, similar to the Cooperstown Beverage Trail.
International Trade Shows
The Governor announced a working group, led by Secretary to the Governor Larry Schwartz, which will work to introduce New York State beer, wine, cider, and spirits to international trade shows.
The Summit follows what has already been a banner year for New York State's beer and wine industry. In July, the Governor signed legislation designed to support New York's breweries and wineries, as well as increase demand for locally grown farm products, and expand industry-related economic development and tourism. The new laws preserved an important tax benefit for small breweries that produce beer in New York, exempted breweries that produce small batches of beer (regardless of location) from paying an annual State Liquor Authority fee, and created a Farm Brewery license that allows craft brewers to expand their operations through opening restaurants or selling new products.