New York Legislation Will Wipe Out 'Gray Market' For Fine Wine

By Ellen Killoran | May 31 2011 4:24 PM

Proposed legislation in New York State will impose heavy restrictions on the sale of rare, collectable wines. Bill No. A06884, introduced by the New York State Committee on Economic Development, will require restaurants and retail stores to purchase wine from a primary source - an authorized distributor who must be clearly identified, thereby eliminating the gray market of private wine sales. The stated intent of the bill is to protect against the sale of counterfeit wines.

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In a Wall Street Journal blog post, Jay McInerney wrote: Counterfeit wine is only a problem at the highest end of the fine and rare wine market, and the auction houses and the top domains are developing strategies to deal with the issue. A few wealthy collectors buy questionable '45 Mouton every year, but this hardly seems a reason to overhaul the entire market.

If the bill becomes law, no longer will New York restaurants be able to source wines from auctions and private collectors to bring you a wide variety of the world's finest and rarest wine, McInerney continued. Plus, your New York retailer will now be at the mercy of the wholesalers.

The bill was introduced in April 5, and its opponents, like McInerney, are encouraging New Yorkers to contact their state legislators to prevent the passing of the bill, which will push the rare wine market out of state and subsequently reduce sales tax revenue.

Primary source laws such as that now under consideration in New York always hurt the consumer, Tom Wark, a wine PR professional and advocate for free wine trade, told IBTimes. They reduce access to wines, they lessen the diversity of wines in a market and they raise prices of wines. Worst of all, the NY bill is nothing more than special interest legislation.