‘STATE OF NEW YORK EXECUTIVE CHAMBER ALpaNy 12224 DAVID A, PATERSON. ‘Governor Dear Liquor Store Owner: In late January, | asked for your help to strengthen my proposal to allow for the sale of wine in grocery stores, Your response was overwhelming. My office received hundreds of emails, letters and telephone calis sharing your ideas and expressing your concems, Your feedback was invaluable, Despite misinformation being circulated about the proposal, it remains a key clement of my 2010 budget. 1 am continuing to negotiate with the Legislature to include a new component aimed at putting money in your pocket and helping your business grow. Therefore, I wanted to speak direetly to you about the FACTS. Fact #1: What is the Medallion system? It is a system that will provide YOU with a valuable commodity that ean put money in your pocket, and that will limit the expansion of the wine and spirits marketplace for the next three years to 100%; a number equal to twice the number of liquor stores existing today. This establishes a reasonable transition period, allowing YOU to make competitive upgrades. Fact #2: How does it work? Each liquor store operating in New York will be granted two medallions, which represent the rights to sell wine in New York. Over the next three years, any entity selling wine in New York will need to possess a medallion. ‘Thus, the thousands of grocery stores looking to sell wine will first need to purchase a medallion from YOU before they will receive a wine license, Fact #3: How does it benefit vou? You will be able to use both medallions as you wish: they can be held (one will be required to continue operating); used to open a new store; transferred privately; or sold at auction. Because the plan eliminates the restriction on holding more than one liquor store license (not for grocery stores), liquor store owners will also be able to compete to purchase medallions to open more than one liquor store, After three years, the medallion requirements will sunset, and the market will open freely. We have heard from store owners in all corners of the state and they are excited about the financial benefit the Medallions will provide, For example, mortgages can be paid off, capital improvements can be made to their stores, ‘nest eggs’ can be started and for some, the ability to sell both Medallions will dramatically increase their financial security for retirement. ‘Throughout this open process, I have learned that liquor store owners are fearful that the marketplace expansion will drive them out of business. Many have argued that while my original proposal offers some useful competitive tools and promises modemization of outdated laws, it does not go far enough. wen.ny. govhave listened to your concerns and carefully considered your ideas. The Medallion concept is an innovative addition that will provide you with a real economic benefit. By adding the Medallions to the components in my carlier proposal, including the ability to own multiple stores, cooperative buying so that small stores can get bulk discounts, and the ability for liquor stores to sell directly to retail establishments, I believe we have answered your concerns about providing liquor store owners with additional value amidst a growing market. Based on preliminary discussions with liquor store owners across New York, I believe that this proposal hits the mark. Please contact my office as soon as possible at governors office @chamber.state.ny.us to voice your input. Additionally, if you have questions you need answered to better understand this plan please do not hesitate to contact my office through any means. Tam extremely gratified to have been able to work with your industry to make this a much stronger and better- balanced proposal, Iam excited to be able to continue these efforts, and fo advance the kind of modernization that New York State’s economy needs in order to flourish, Warmest regards, Dard A. Pareuwer- DAVID A. PATERSON