ESRTA Asks Court to Uphold SLA Split Case Fee Regulation

The Association appeared before the NYS Supreme Court over the summer to urge it to uphold the State Liquor Authority’s regulation prohibiting liquor wholesalers from charging exorbitant split case fees. This regulation, which has been on the books for more than 40 years, was updated by the SLA last year after learning that some wholesalers were charging small businesses as much as $3.00 per bottle extra for splitting up a case of liquor and imposing delivery fees for orders below various minimum purchase levels set by the wholesalers.

An inquiry by the Liquor Authority determined that these extra fees added up to about $8,000 per year for a typical small establishment. The SLA also found that these fees are not listed on the price postings liquor wholesalers file with the Authority each month as required by state law. A retailer looking up the price of ordering an individual bottle of liquor would not see the actual cost of the product until receiving their invoice. The revised regulation requires that these fees be included in the price posting for each product going forward.

The New York State Supreme Court in Albany heard oral argument over the summer on the Article 78 petitions filed by Empire Merchants and Southern Glaser Wine & Spirits seeking to overturn the revised SLA regulation. Representatives of the hospitality industry filed a motion seeking to intervene in the case as interested parties who are significantly impacted by this litigation and appeared before the court to explain the burden these policies impose on small operators. The judge reserved decision from the bench and agreed to issue a written decision which has not yet been released.

Our battle against split case fees and delivery charges will continue regardless of the results of this court hearing. Legislation is pending before the Assembly and Senate that would prohibit fees to be added to the price and that would allow on premises licensees to make limited purchases from liquor stores. We’re also looking for additional proposals that would provide relief from wholesalers’ market dominance. Stay tuned for an update once the judge issues his decision.