As New York Revisits To-Go Drink, Liquor Stores Prepare for Battle

ALBANY, N.Y. — Amid the gloom and economic devastation that the pandemic first brought to New York, state officials introduced a crowd-pleasing salve: the temporary legalization of to-go alcoholic drinks.

The move in March 2020 was seen as a lifeline to a restaurant industry that had been decimated by the virus, and a socially pointed diversion for New Yorkers eager to reclaim a wisp — even in the form of a takeout margarita — of their prepandemic lives.

So when state lawmakers attempted to permanently legalize to-go cocktails last spring, the effort seemed to many like a shoo-in.

And yet, by the time lawmakers adjourned in June, the measure was dead, the apparent victim to a powerful and ubiquitous force in Albany: the relatively discreet but forceful opposition from lobbyists for an aggrieved liquor store industry.

The defeat of the proposal last June is a quintessential story about the indelible impact that well-organized lobbying forces have on even the most unassuming policy proposals in Albany.

It set off a contentious clash between liquor stores and the restaurant industry over who should be allowed to put alcohol in New Yorkers’ hands outside of their premises. In a flurry of activity, their lobbyists took aim at the State Capitol, trade groups started public relations campaigns, and even the union representing state police waded into the debate.

But the time-tested lobbying efforts of the liquor store industry, which appeared to mobilize more swiftly to quell momentum of the legislation, caught the restaurant industry flat-footed. Behind the scenes, the liquor store industry directed tens of thousands of dollars in political donations to state lawmakers, while individual store owners mounted a campaign to pressure their elected officials.

Their primary concern, of course, was money: They made their case that allowing bars and restaurants to sell booze to-go would upend their businesses. But they imbued that contention with public health concerns, arguing that takeout drinks could lead to underage drinking and drunken driving, as well as drinking in public — concerns echoed by some lawmakers.

The battle is set for a second round during the current legislative session, as Gov. Kathy Hochul announced in her State of the State address that she intended to legalize the sale of to-go drinks for bars and restaurants, making permanent a program that ended in June.

Steven Cymbrowitz, an Assembly Democrat who introduced a bill last year to legalize to-go drinks, recalled that the legislation’s main obstacle was the liquor store lobby, which he said used “scare tactics” to “protect their turf.”

“I couldn’t believe some of the things that they were saying,” he said. “That there was going to be more urination in the street, people were going to defecate on the street, there’s going to be more crime.”

Takeout drinks were made temporarily legal through an executive order issued by Gov. Andrew M. Cuomo, who was granted broader emergency powers during the pandemic. But for New York to join the 16 states that have made to-go cocktails permanent, Ms. Hochul, however, must go through the Legislature. Already, both lobbying forces have begun to mobilize again.

A group of trade associations representing the restaurant industry has marshaled its lobbyists and continued a public-relations campaign that cast the restaurant industry as one of the worst victims of the pandemic — a strategy they have used to secure government relief.

On the flip side, one influential liquor store trade group, the Metropolitan Package Store Association, recently emailed its members asking for donations to help convince lawmakers that the proposal would “create a public health crisis.”

Made up mostly of mom-and-pop shops, the liquor store industry has a rich tradition of political activism in Albany, especially when it comes to protecting the bottom line of its more than 3,000 stores. Its lobbying efforts, for example, played a major role in successfully opposing a measure 10 years ago that would have allowed grocery stores to sell wine.

It has also been a reliable donor to elected officials, even if it is far from one of the largest moneyed interests in the Capitol.

The political action committee, or PAC, controlled by the Metropolitan Package Store Association has given over $140,000 to elected officials since last year, mostly Democratic lawmakers, who control the Legislature. Over the same time period, two PACs associated with the restaurant industry gave just over $20,000.

Indeed, over the past two decades, the Metropolitan Package Store Association has established “longstanding relationships” in the Capitol through a steady stream of political contributions. That has included nearly $200,000 to Mr. Cuomo; $14,500 to Carl E. Heastie, the Assembly speaker; and $31,100 to Michael Gianaris, the Democratic deputy majority leader in the Senate, whom the association honored during its 87th annual dinner last October.

Mr. Gianaris, who has also received contributions from the restaurant industry, said he supports codifying to-go cocktails and finding a resolution “that hopefully does not hurt other small businesses.” He added that the legislation last year “was one of those things that when you get toward the end of the session, the clock runs out.”

The PAC also gave $25,000 to Ms. Hochul in October, before she came out in support of to-go cocktails.

The liquor store industry did not initially oppose to-go drinks; though the industry’s lobbyists contend that some stores suffered, sales overall had ballooned in 2020, and stores saw the measure as an acceptable, if temporary, reprieve for struggling restaurants and bars that had been forced to close their doors to customers during the pandemic.

But they appeared to grow particularly irritated by bars and restaurants that were selling full bottles of wine and spirits, effectively operating as makeshift liquor stores, which have to go through a rigorous process to obtain a license to sell alcohol.

With Mr. Cuomo’s executive order on to-go drinks set to expire last summer, some state lawmakers moved to codify the program into law. They cited its popularity and importance for the economic recovery of the restaurant sector, which still employs about 30 percent fewer workers than in 2019.

That’s when the liquor stores’ efforts kicked into gear.

Lobbyists for the Metropolitan Package Store Association began pushing the governor’s office and the Legislature to oppose the measure, according to lobbying disclosures. The New York State Liquor Store Association also lobbied lawmakers.

Steve A. Malito, the main lobbyist for the Metropolitan Package Store Association, said in a statement that legalizing to-go cocktails “will result in a very significant negative financial impact” for its stores, which he added “already operate on much slimmer margins than restaurants.”

Liquor store owners also penned letters to lawmakers, arguing that the legalization of to-go cocktails would effectively license the state’s 30,000 bars and restaurants as liquor stores overnight.

“Anyone that gets ANY KIND OF DRINK via ‘to-go’ is consuming alcohol that they otherwise would have purchased at one of our package stores,” read one sample letter. “We lose market share. It is that simple.”

Mr. Cymbrowitz’s bill took the liquor industry’s concerns into consideration; it would have legalized to-go drinks only for one year. It did not allow bars and restaurants to sell full bottles, only two servings of wine, mead or liquor in sealed containers, along with the purchase of food.

Those concessions were not enough. Urban lawmakers in particular echoed concerns about the effect it would have on public drinking in their districts, with the thinking being that a person could be more likely to consume a takeout drink on the street than, say, a sealed bottle of wine or liquor.

“How do you make sure that to-go drinks make it home, rather than are consumed on our street corners in violation of open container laws?” said State Senator Brad Hoylman, a Democrat from Manhattan, who said he supported to-go drinks and believed outstanding issues were “solvable.”

The effect that to-go cocktails had on public drinking is difficult to gauge: In 2020, public drinking summonses plummeted by 43 percent in New York City from the previous year, but many law enforcement officials around the country did not prioritize enforcement of open-container violations during the pandemic.

Opponents nationwide and in New York, including the union representing state troopers, have urged lawmakers to analyze data on impaired driving before making to-go cocktails permanent, raising concerns that doing so could send the wrong message to drivers and potentially lead to an increase in drinking and driving.

Assemblywoman Patricia Fahy, a Democrat from Albany and one of the more vocal supporters of to-go drinks, said she was “naïve” about the opposition the measure would confront.

“We just didn’t have the votes to move it,” Ms. Fahy said.

When the order on to-go cocktails expired last year, bars and restaurants were left reeling, with some rushing to sell off their stock of wine at discounted prices before doing so became illegal again.

“We got whipsawed by a well-organized group of advocates who didn’t mind stretching the truth and legislators who didn’t have time to work through the issues,” said Scott Wexler, the executive director of the Empire State Restaurant and Tavern Association.

Lawmakers said legalizing to-go drinks has undeniable momentum this year with Ms. Hochul on board. Her budget proposal released in January included the measure, and would leave it up to the state liquor authority to determine the rules around serving sizes and the sealing of containers.

The debate around to-go cocktails has elevated a larger effort to modernize the state’s highly regulated alcohol industry, which still operates under laws with roots in the Prohibition era.

State Senator James Skoufis, a Democrat from the Hudson Valley, said he intends to introduce a “comprehensive” package of legislation to overhaul the industry, ranging from changes to increase competition to alterations that would allow liquor stores to sell seltzer or open on Christmas Day.

“We have alcohol laws here in New York State that would make prohibitionists blush,” Mr. Skoufis said.

“There are so many sort of layers and industries and lobbyists,” he added, “that if you do one thing over here, it turns out you step on a political land mine over there.”