Great Eastern Liquor Corp. v. State Liquor Authority, 25 N.Y.2d 525 (1969)

New York’s Alcoholic Beverage Control Law permits liquor retailers to use comparative or percentage-based price advertising (e.g., “20% off”) so long as the exact dollar price is not explicitly stated outside the licensed premises.

Summary

Great Eastern Liquor Corp. and Jacoves Liquors, Inc. separately challenged the State Liquor Authority’s (SLA) determination that their newspaper advertisements violated Section 105(19) of the Alcoholic Beverage Control Law, which prohibited advertising the price of liquor outside the licensed premises. Great Eastern used terms like “at wholesale,” while Jacoves used phrases like “22% off.” The Court of Appeals held that these advertisements did not violate the statute because they did not explicitly state the price. The court reasoned that the legislative intent was to promote competition and lower prices for consumers, and ambiguous terms in price statutes should be interpreted accordingly.

Facts

• Great Eastern Liquor Corp. advertised liquor using the phrases “at wholesale” and “wholesale.”
• Jacoves Liquors, Inc. advertised liquor with phrases such as “Save over $____”, “22% off”, and “25% off”.
• The State Liquor Authority (SLA) found that both licensees violated Section 105(19) of the Alcoholic Beverage Control Law, which prohibits advertising the price of liquor outside the licensed premises.

Procedural History

• The SLA sustained charges against both Great Eastern and Jacoves, imposing penalties.
• The Appellate Division unanimously annulled the SLA’s determinations in both cases, finding that the advertisements did not publicize “the price” of liquor as prohibited by the statute.
• The SLA appealed to the Court of Appeals.

Issue(s)

1. Whether advertisements using comparative terms like “at wholesale” or percentage discounts (e.g., “22% off”) violate Section 105(19) of the Alcoholic Beverage Control Law, which prohibits advertising “the price” of liquor outside the licensed premises.

Holding

1. No, because the statute prohibits advertising of “the price” itself, not comparative terms or selling arguments that do not explicitly state the dollar amount.

Court’s Reasoning

The Court reasoned that the legislative intent behind the Alcoholic Beverage Control Law, especially after the 1964 amendments, was to promote competition and lower prices for consumers. The court emphasized Section 101-b(3)(d), which requires manufacturers to file schedules ensuring New York wholesalers receive prices no higher than the lowest prices offered elsewhere in the U.S. The court stated, “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.” Citing the Seagram & Sons case, the court reinforced that the legislature did not equate higher liquor prices with temperance. The court deferred to the SLA’s revised interpretation that advertisements using terms like “priced under” or “less than” a stated amount were lawful, supporting a more competitive market. Judge Burke dissented, arguing that such advertisements indirectly advertise the price and undermine the statute’s purpose of promoting temperance. He argued that the majority’s interpretation allowed for a “contemptuous disregard for the plain language of the statute.”