NY Liquor Policies Are Kicking Bars and Restaurants While They're Down

Many of New York City's restaurants may be unable to resume serving alcohol after pausing payments when the pandemic closed their doors.
June 24, 2020, 11:16am
bottles of alcohol in a bar

As New York City slowly rolls through the stages of reopening, many businesses find themselves struggling to adapt to new safety guidelines on top of lost revenue from the three-plus months that they've sat empty during the coronavirus pandemic. But while we retreated inside and took a break from dining and drinking out, state authorities did not press pause on a rule that could keep many of these bars and restaurants shuttered—for reasons that have nothing to do with protecting people from COVID-19.

In the tersely worded Mission Statement posted on its website, the New York State Liquor Authority (SLA) says that it basically does two things: issues liquor licenses and permits for manufacturing, distributing, and selling booze; and ensures that all of its licensees and permit-holders comply with the Alcoholic Beverage Control Law. But another thing that the SLA is responsible for, and straight-up requires, is for manufacturers and wholesalers to report any retailers who take more than 30 days to pay their bills for whatever beer, liquor, or wine they've bought. According to the SLA's Delinquency Reporting regulations, any retailer who buys booze on credit has anywhere between 12 and 30 days to pay their bills in full, depending on what kind of alcohol was in their order.

If those outstanding balances aren't paid by the due date, then the wholesaler is required to report that retailer as being delinquent. "Delinquency reporting is not optional," the SLA warns, using a bold font to further emphasize those five words. Any retailer that is reported as delinquent has its name added to the agency's "C.O.D. list," where they'll stay until they've paid their full bills. During that time, they're not allowed to buy any more alcohol on credit which, during normal times, doesn't sound unreasonable.

But this year, when bars and restaurants have been affected by what feels like an ever-increasing number of pandemic-related challenges, it seems like maybe the SLA should consider cutting them a break.

The New York Post reports that the SLA isn't doing that, despite a request from the New York State Restaurant Association, asking for bars and restaurants to please have another 30 days to settle up. The SLA said nope, that wasn't fair to the wine and beer wholesalers.

"I tried to explain to them the wholesalers aren’t going to get their money anyway,” the Association's Chief Executive Melissa Fleischut said. “[Restaurant owners] can’t pay.” (The SLA's regulations also don't allow bars or restaurants to negotiate prices with wholesalers the way they could with other vendors, nor can the wholesalers work out any kind of payment plans with their customers. "Delinquency reporting is not optional," and all that.)

One alcohol regulatory expert said that, under normal circumstances, less than 5 percent of the city's restaurants would be on the C.O.D. list but, due to the pandemic, it is believed that "an overwhelming majority" of restaurants and bars are unable to pay their outstanding balances—and they also don't have enough cash on hand to buy more wine or beer outright.

"Theoretically, you could have places opening and within a few days they have exhausted their alcohol supply that they had for March,” Robert Bookman told the Post. "It could really negatively impact their opening and their ability to get moving again and bring in revenue again.”

VICE has reached out to both the New York State Restaurant Association, and to the New York State Liquor Authority. In the meantime, the SLA has suggested that it's already given restaurants plenty of breaks, like giving them more time to pay to renew their licenses, and allowing them to sell cocktails to go.

That's all great for the joints that actually have enough booze to make those cocktails, but it doesn't help everyone else.

This article originally appeared on VICE US.