A huge victory for small liquor stores, restaurants, and taverns in New York.
The New York State Liquor Authority (SLA) published a final rule that will cap the split case fees that wholesalers charge to retailers, while also beefing up enforcement efforts going forward. This is a huge victory for small liquor stores, restaurants, and taverns that have seen excessive split case fees from the two largest wholesalers in New York. Wholesalers have routinely charged as much as $36 per case as a split case fee even though the SLA set a cap of $1.98 in 1980. Small restaurants, taverns, and liquor stores often lack the storage space and financial means to purchase an entire case of wine or liquor, and instead will buy a certain number of bottles. The wholesaler will sell individual bottles to retailers but charges a split case fee that has steadily risen to exorbitant levels over the last 50 years. This puts smaller retailers and restaurants at a competitive disadvantage as they need to charge more for their products than their larger competitors.
Under the new final rule, the SLA has reassessed the $1.98 split case fee set in 1980 and adjusted it for inflation. Effective immediately, wholesalers cannot assess a split case fee of more than $7.39 per case. For example, if a case with 12 bottles has a price of $120 ($10 per bottle), the maximum price for each bottle, rounding to the nearest cent, would be $10.62: $127.39 ($120 for the case plus $7.39 for the fee) divided by 12 bottles. Additionally, wholesalers must list both the price of the case and the price of the bottle, including the split case fee, for each item of liquor or wine listed in the schedule of prices to retailers.
The new split case fee cap is effective November 30, 2022. For more information, visit https://sla.ny.gov/proposed-regulatory-reform-package-split-case-fees.
