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MATTER GREAT EASTERN LIQUOR CORP. v. STATE LIQUOR AUTHORITY STATE NEW YORK (12/11/69)

COURT OF APPEALS OF NEW YORK 1969.NY.43946 <http://www.versuslaw.com>; 255 N.E.2d 704; 25 N.Y.2d 525 decided: December 11, 1969. IN THE MATTER OF GREAT EASTERN LIQUOR CORP., RESPONDENT,v.STATE LIQUOR AUTHORITY OF THE STATE OF NEW YORK, APPELLANT; IN THE MATTER OF JACOVES LIQUORS, INC., RESPONDENT, V. STATE LIQUOR AUTHORITY OF THE STATE OF NEW YORK, APPELLANT Matter of Great Eastern Liq. Corp. v. State Liq. Auth., 30 A.D.2d 307, affirmed. Matter of Jacoves Liqs. v. State Liq. Auth., 30 A.D.2d 820, affirmed. Counsel Emanuel D. Black and Samuel Roberts for appellant. Meyer E. Reich for Great Eastern Liquor Corp., respondent. Counsel Robert Gordon for Jacoves Liquors, Inc., respondent. Counsel Charles S. Desmond for Metropolitan Package Store Association, Inc., amicus curiae. Chief Judge Fuld and Judges Breitel and Gibson concur with Judge Bergan; Judge Burke dissents and votes to reverse in a separate opinion in which Judges Scileppi and Jasen concur. Author: Bergan


Matter of Great Eastern Liq. Corp. v. State Liq. Auth., Chief Judge Fuld and Judges Breitel and Gibson concur with Judge Bergan; Judge Burke dissents and votes to reverse in a separate opinion in which Judges Scileppi and Jasen concur.

Author: Bergan

 Whatever may be the reasons of policy leading the Legislature to prescribe the display of price signs and to regulate price advertising of liquor, it seems obvious from a reading of the Alcoholic Beverage Control Law as a whole that the Legislature has not attempted to promote temperance by making alcoholic beverages more expensive to New York consumers.

In the same section of the same statute (§ 101-b, subd. 1) which states (as does § 2) that one of the purposes of the act is "to promote temperance", there is a mandatory requirement that manufacturers of brand liquor shall file with the Authority a schedule showing that the bottle and case "price" of liquor to New York wholesalers is no higher than the "lowest price" at which it is sold to wholesalers or public agencies anywhere in the United States (§ 101-b, subd. 3, par. [d]).

The section itself deals, as its heading states, with "discriminations" and in text expresses in very plain language a policy in New York to prevent discrimination against New York consumers and to keep prices of liquor as low in New York as the statute can do it for the benefit of consumers in this State.

This general price policy was enacted in 1964 (ch. 531) in response to an investigation under the direction of the Governor which revealed that the New York consumer was paying from 50 cents to $1.50 more for each fifth of whiskey than the price at which it was available in at least seven freer price markets (Moreland Commission Report No. 1, p. 3 [1964]).

This study led the Governor to recommend to the Legislature a change in the prior rigid public price management of liquor. The Governor estimated by that mechanism a "surcharge" had been imposed on New York consumers of liquor of $150 million a year (Message, Feb. 10, 1964). This, of course, went to the liquor industry.

The present statutory requirement that the wholesale "price" of brand liquor, which makes up most of the liquor market, shall be "no higher than" that charged anywhere in the country resulted from this study and recommendation.

The constitutional validity of the statute was upheld against the vigorous argument of the liquor industry that it "did not promote temperance" (Seagram & Sons v. Hostetter, 16 N.Y.2d 47, affd. 384 U.S. 35, rehearing den. 384 U.S. 967; see, especially, the appellant's argument based on temperance, 16 N.Y.2d, at p. 49).

Thus it is rather clear that the Legislature does not equate higher prices of liquor with temperance, and the statute must be read as saying that while temperance is to be promoted, the New York consumer must not, for this reason, be discriminated against by paying higher prices for the liquor he chooses to buy.

Consistently with this, the Legislature as part of the 1964 amendments to the statute also took steps to discourage monopoly and increase competition and hence, presumably, keep prices to consumers down, by repealing rather large distance requirements between retail license stores which had been provided by former subdivision 4 of section 105 and which the Governor's message to the Legislature had described as "artificial devices" through which the liquor industry received "uniquely beneficial treatment at the consumer's expense" (see Matter of Hub Wine & Liq. Co. v. State Liq. Auth., 16 N.Y.2d 112, 116, 117).

It is with this background to the policies formulated by the present statute that subdivision 19 of section 105 dealing with signs and advertising of "price" must be read.

The text of the subdivision is this: "19. No licensee authorized to sell beer or liquor at retail for consumption off the premises shall display any sign on or adjacent to the licensed premises, setting forth the price at which beer or liquor, or any brand thereof, is sold or offered for sale, or advertise such price in any other manner or by any other means, except in the interior of the licensed premises."

That subdivision which before the 1964 revision by chapter 531 had referred only to beer, was, as a part of the general revision in 1964, amended to include liquor and it would not be reasonable to think that the Legislature added "liquor" to its regulation of signs and advertising of "price" in order to increase prices at the same time its manifest concern and avowed policy was to bring liquor prices down and to prevent discrimination against New York consumers.

Thus the language of subdivision 19 should not be read to impose greater restrictions on competition and on advertising of liquor than its words require. Its actual words prohibit advertising of "the price" and not of comparative terms or selling arguments. Long after the present charges against petitioners of violations of subdivision 19 were made by the Authority in 1967, and while the appeal was pending in this court, the ...


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