As a nightclub/restauarant owner (and a foreigner) in New York city for the last 8 years I am puzzled by a few things regarding the liqour industry here, and have never been able to get any satisfactory answers to my questions.
The way I understand it is:
1) After prohibition the State Liqour Authority organised the industry and was in charge of licensing firms to sell liquor, the same firms licensed then are still the same today.
2) In New York I can only buy my liquor from these same distributors...... Peerless,Charmer,and Paramount. These companies have a complete monopoly over 95% of the spirits on the market and their dominance is enforced by the S.L.A who, when conducting spot checks at my club,need to see an invoice from one of these 3 companies for EVERY bottle of liqour in my establishment or else its a ticket and a fine.
3) It is illegal for me to buy , lets say, a case of Absolute Vodka from Astor wines for sale at the club, EVEN THOUGH it may be cheaper and with state tax paid. The same importer will be selling to me and to Astor wines but they have a TOTAL monopoly on the product and set whatever prices they want to different retailers.
I can get special deals ( 10 cases 1 free etc.) in my restaurants on Moet champagne for example, but not in my nightclub. I cannot buy for the restaurants and then divert the product to my nightclub (illegal)
4)Why in this free trade open society is a total monopoly allowed to exist and actively protected by a government agency?, why has this business not been investigated by the Anti trust commision,or the dept.of fair trade, monopolies comission etc.(whatever it is in this country).
5)The business is totally corrupt, I can get one price this week and another completely different next week. I can do deals and take free cases of one product that they want to push, and get cut a good deal on something that I need. I can do "sponsorship" events whereby checks get cut to promotors,printers etc. but not to the club ( thats illegal). I am forced by the state to buy my product from the only importer that they licence, but have not reviewed or opened up to competition for the last 80 years.
6) why does the state allow and actively encourage monopolistic, anti-competative, restrictive trade practices and why has no-one sought to have these ridiculously outdated laws changed. It is undemocratic and illegal in every other industry in this country.
7) As far as I understand things the corruption between state agencys and these companies is so deep and entrenched that to change things would need a total scandal of huge proportions. Too many people are getting their backs scratched and I have heard many times that the liquor companies have long links to old " Italian families".
I know its a bit of a rant with some conjecture but the facts are true.
New York State supports by law a monopolistic anti-competative industry............ WHY?
And come on now guys, 21 to drink, for heavens sake!!
This industry needs a huge change, it needs to be re-legislated to allow free and fair competition. It is running on laws invented after prohibition to control the supply of Liquor in the state. Times have changed and the industry needs to be brought out of the past and legislated forward into the future.
Some-one must do something, but what and who.
A good start would be to have the Anti-trust commision investigate this monopoly.
Anyone who can provide me with insight into why things are allowed to go on this way please respond.