ALBANY — Governor Andrew M. Cuomo unveiled the 19th proposal of the 2020 State of the State – growing New York’s craft beverage manufacturing industry by reforming antiquated prohibition-era laws that will remove barriers to new investments. The Governor’s proposal will make it easier for movie theaters to sell alcoholic beverages, giving them more revenue and craft producers additional retail outlets; and modernize New York’s Alcoholic Beverage Control law to help higher education institutions train the next generation of the craft beverage workforce.
“New York’s craft beverage industry is flourishing thanks to eight years of targeted investments and forward-thinking policies that are attracting new businesses and supporting our booming tourism industry,” Governor Cuomo said. “This measure will remove outdated Prohibition-era rules that hamper private sector investment, ensure we’re training the next generation of workers in a critical industry and give more New Yorkers the opportunity to responsibly enjoy a drink at the movies.”
Reforming the Arcane Prohibition-Era Tied House Law
The Governor proposes amending New York’s Tied House Law, an arcane provision of the Alcoholic Beverage Control – or ABC – Law that makes relocating to or opening or investing in a business in New York needlessly difficult. Prohibition-era Tied House Laws are intended to prevent manufacturers or wholesalers from having undue influence over a retail business that sells beverages directly to consumers. New York’s law, on the books since 1933, prohibits all such retailer and manufacturer/wholesaler relationships, and is even stricter than long-standing federal law, which provides discretion by analyzing the details of the relationship when there is a partial ownership stake, and allows such a relationship when ownership is total.
This stricter law has resulted in a number of business ventures – both manufacturing and retail – being denied licenses and the opportunity to do business due to these out-of-date provisions. While several businesses have obtained special legislation in order to invest in these ventures, this process involves an act of the legislature which is both uncertain and time consuming, resulting in countless lost opportunities as businesses simply find other locations to invest in. To remove these restrictive barriers to investment, Governor Cuomo proposes amending New York’s Tied House Law to match the federal approach, continuing the message that New York is open for business.
Sale of Alcohol In Movie Theaters
As a way to boost the state craft beverage industry, the Governor is proposing an amendment to the ABC law to allow the sale of beer, wine, cider, mead, and spirits at movie theaters. Current state law only allows movie theaters with full kitchens and tables inside the screening rooms to offer the sale of alcohol to their adult customers. With increased competition and diversification of video content creation and consumption methods, movie theaters faced with competition have been investing in upgrades and advancements to the movie-going experience. While these investments are attracting new audiences, they have increased operating costs with many theaters struggling to pay for these upgrades without additional sources of revenue.
Under the Governor’s proposal, adults holding tickets to movies rated PG-13 or higher could purchase alcoholic beverages, provided only one drink could be sold to a customer at a time. This proposal will provide theater operators with additional revenues, assist in the economic development of downtowns, and provide New York craft producers with additional retail outlets.
Create a post-secondary institution program license to meet growing workforce demand
The Governor is proposing the creation of a post-secondary institution license under the ABC Law. Currently, licensing an educational institution for alcoholic beverage manufacturing is overly complicated, with institutions interested in teaching the production of the various types of alcoholic beverages requiring multiple applications and separate licenses. Additionally, higher education institutions cannot sell the craft beverages their students produce in a restaurant setting without being granted a special exception by the legislature. These requirements can limit the educational programs and training opportunities for students eager to gain these in-demand skills. The proposal would allow educational institutions to produce any alcoholic beverage under one license and the ability to retail their products under the same license. This proposal will help continue the growth of New York’s surging craft beverage industry by making it easier for the state’s higher educational institutions in creating a skilled and knowledgeable workforce.
Recognizing the value that craft manufacturers have for not just their own businesses, but for the State’s entire economy, Governor Cuomo has worked to create new licenses, modernize laws, relax regulations, cut taxes, eliminate fees and launch innovative promotional campaigns to make it easier to start and grow new craft manufacturing businesses. Since the Governor’s first Wine, Beer and Spirits Summit, the number of farm-based licenses has increased by over 181 percent during, from 282 in October 2012 to 792 today.
New York now ranks in the top five in the U.S. for its number of craft beverage producers in every category. The state ranks first in U.S. for the number of hard cider producers, second in craft distillers, third in breweries, and fourth in the country for the total number of wineries.
–The Offie of Governor Andrew M. Cuomo
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