BILL NUMBER: S6703B
SPONSOR: JACKSON
 
TITLE OF BILL:
An act to amend the alcoholic beverage control law, in relation to
authorizing holders of certain licenses issued by the state liquor
authority to engage in the sale or wholesale of ready-to-drink cock-
tails, and to correct certain provisions otherwise unintentionally
limiting the sale of mead and/or braggot, cider, and ready-to-drink
cocktails
 
PURPOSE OR GENERAL IDEA OF BILL:
To modernize New York's Alcoholic Beverage Control Law by authorizing
certain retail licensees to sell spirits-based ready-to-drink cocktails,
creating parity between malt-based and spirits-based RTDs, expanding
economic opportunity for small businesses, and correcting statutory
limitations on the sale of mead, braggot, cider, and RTDs.
 
SUMMARY OF PROVISIONS:
Section 1: Establishes the title of the act as the "Ready to Drink Cock-
tail Retail Sales Act."
Section 2: Amends section 3 of the Alcoholic Beverage Control Law to add
a new subdivision 23-a defining "ready to drink cocktail" as a beverage
containing liquor combined with juice, flavoring, water, citric acid,
sugar, or carbon dioxide, containing no more than 8.5 percent alcohol by
volume, and sold in single serving containers of no more than sixteen
ounces.
Section 3: Adds a new section 70 to the Alcoholic Beverage Control Law
authorizing each retail licensee to sell ready-to-drink cocktails at
retail for on or off-premises consumption without additional fees,
provided the RTDs are purchased from a licensed wholesaler or manufac-
turer.
Section 4: Amends section 101-aaa of the Alcoholic Beverage Control Law
to include ready-to-drink cocktails in existing provisions governing the
sale, payment, and delivery terms for beer, mead, braggot, cider, and
wine products.
Section 5: Sets the effective date as ninety days after enactment and
authorizes the State Liquor Authority to adopt any necessary rules and
regulations prior to that date.
 
JUSTIFICATION:
The ready-to-drink (RTD) cocktail market is one of the most dynamic and
fastest-growing segments of the beverage industry. The United States RTD
market is projected to grow from $860 million in 2024 to $2.66 billion
by 2033, with a compound annual growth rate of 13%. Surveys indicate
that 86% of consumers believe spirits-based RTDs should be sold wherever
other RTDs are available, and 55% prefer spirits-based RTDs to malt or
wine-based alternatives.
This growth presents a clear opportunity for New York's small busi-
nesses. Many of the retail licensees that would benefit from this bill
are small independent bodegas, convenience stores, restaurants, taverns,
and family-owned beverage centers. These businesses are anchors in their
communities, providing jobs, neighborhood stability, and accessible
retail options. By granting them the ability to sell spirits-based RTDs,
the bill offers an immediate and meaningful new revenue stream. These
beverages have a similar alcohol content to malt-based RTDs, yet so far,
no legislation has been enacted that would allow these to be sold in the
same locations as malt-based RTDs.
In 45 states, spirits RTDs are taxed at a higher rate than malt RTDs.
This state-level disparity is compounded by a federal tax structure that
taxes spirits RTDs at more than twice the rate of beer or wine-based
RTDs. While beer and malt-based RTDs can be sold in grocery and conven-
ience stores in over forty states, spirits RTDs with the same or lower
alcohol content can only be sold in grocery and convenience stores in 29
states.
Current NY law is but one example of the artificial and outdated barri-
ers for these products. Malt-based RTDs, such as hard seltzers and
flavored malt beverages, are available in grocery stores, bodegas, and
convenience stores throughout the state. Nearly identical spirits-based
RTDs are restricted to liquor stores solely because of their alcohol
source, not their alcohol content. Both categories are typically between
four and eight percent ABV and sold in similar packaging and serving
sizes. Consumers perceive them as interchangeable products, yet one is
widely available, while the other is limited to a specific retail chan-
nel.
Experience from other states shows that expanding RTD availability
boosts small business sales without harming liquor stores. Vermont
expanded RTD sales from 82 state-run stores to over 1,000 private
outlets. Michigan, Mississippi, and Iowa passed similar laws. In each
case, liquor stores continued to operate successfully, while small busi-
nesses in the grocery, convenience, and hospitality sectors experienced
new growth. Pennsylvania projects that allowing broader RTD sales will
generate $137 million in additional tax revenue over five years, exclud-
ing revenue from permit fees.
Some opponents argue that this bill will eliminate one of the larger
revenue streams for liquor stores. Data do not support this claim. RTDs
currently make up only about 9% of total spirits sales nationally. RTDs
are not a flagship product for liquor stores in the way that wine and
full-size liquor bottles are. Many liquor stores lack the refrigeration
or space to stock RTDs in the way that consumers prefer to purchase
them, which is typically chilled and ready to drink. Consumers visit
liquor stores to purchase bottles of wine, spirits, and specialty items,
rather than single-serve canned cocktails. By contrast, bodegas, small
grocery stores, and restaurants are already equipped to offer quick
grab-and-go beverages and will see direct economic benefit from this
change.
Expanding RTD sales does not dismantle liquor store protections, but it
does create a more level playing field for other small businesses that
are an equally integral part of New York's retail landscape.
There are also existing restrictions for individuals under 21 accessing
these products. Spirit-based RTDs are essentially the same product as
malt-based RTDs already on store shelves. They are subject to the same
licensing requirements, ID checks, and penalty structures. The only
difference is the alcohol base. This bill maintains strict limits on
alcohol content and container size to keep them in line with beer and
cider products. No new or unfamiliar beverage types are being intro-
duced, and no expansion into unregulated retail channels will occur.
Examples of spirits-based RTDs that this bill would cover include High
Noon Hard Seltzer, Cutwater Spirits Margarita, Jack Daniel's Canned
Cocktails, On The Rocks Mai Tai, Crown Royal Whisky and Cola, Bacardi
Rum Cocktails, 1800 Ultimate Margarita, and House of Delola Spritz.
These products directly compete with malt-based RTDs such as Truly,
White. Claw, and Twisted Tea, which are already widely available outside
liquor stores. Consumers do not differentiate between them based on
alcohol source, and the law should not either.
 
PRIOR LEGISLATIVE HISTORY:
New Bill.
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law.

Statutes affected:
S6703: 3 alcoholic beverage control law, 54 alcoholic beverage control law, 420 tax law, 424 tax law, 424(1) tax law, 53 alcoholic beverage control law
S6703A: 3 alcoholic beverage control law, 54 alcoholic beverage control law, 62 alcoholic beverage control law, 63 alcoholic beverage control law, 420 tax law, 424 tax law, 424(1) tax law, 53 alcoholic beverage control law
S6703B: 3 alcoholic beverage control law