Batali and Bastianich group threatened with suspension

Can you imagine dining at Del Posto and not having a glass of vino?

That might be the case. The New York SLA (State Liquor Authority) has posted to their website a list of items on their March 25 meeting. On the agenda are several items relating to liquor licenses held by Batali and Bastianich Hospitality Group, for Eataly, Del Posto and other of their restaurants.

The item for Eataly states two charges: (1.) “interlocking interest” on 8/1/13 and (2.) False material statement on 8/1/13. The proposed remedy is a $500,000 fine and suspension of license for six months, and removal of Lidia Bastianich from Eataly Wine LLC. (pp. 54-67 in this pdf) These charges and remedies are repeated for all Batali and Bastianich hospitality group restaurants in New York State: Babbo, Felidia, Becco, Esca, Otto, Casa Mono, Lupo, Del Posto, Tarry Lodge, Eataly and Eataly Scuola. A previous B&BHG press release described their restaurants: “While each location offers its own culinary identity, all have the signature combination of thoughtful and memorable food, intelligent wine lists, and an emphasis on living life to its absolute fullest.”

Reached by email, a senior person at Batali and Bastianich Hospitality Group declined to comment on the situation.

It’s no secret that Joe Bastianich imports wine and sells Bastianich wine made in Italy through the Eataly wine store and various restaurants. However, he knows how the system works. Early reaction to this item from several industry insiders is that the SLA has changed their attitude toward such cross holdings and interlocking ownerships, rather than that Bastianich did anything wrong per se.

One insider remarked, “Few restaurants could survive without a liquor license for six months but Bastianich might be able to.” The insider, who requested anonymity, continued, “If this is a new direction, they [the SLA] are certainly sending a signal with this.”

Clarification should come at next week’s SLA meeting.

Photo Credit: demoshelsinki cc

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17 Responses to “Batali and Bastianich group threatened with suspension”

  1. These are the same people who had to settle a multi-million dollar lawsuit (to avoid federal felony charges, which would have resulted in an inability to hold a liquor license) for the long term, systematic skimming of their employees tips.

    There’s not much worse than millionaires conducting “wage theft” against their workers, so I certainly wouldn’t put this past them. They’re scum.

  2. This sounds as if someone in the NY SLA has decided to reinterpret existing regulations or simply enforce them literally.

    IIRC, something similar happened in Southern California back when I was a retailer in the early 1990s. A politically ambitious state bureaucrat decided that the best way to elevate his awareness among potential voters would be to begin enforcing the letter of the law with regard to the relationship between distributors and retailers in the wine world. Huge fines ($20-100K) were levied on small brokers for minor infractions such as placing POS material on shelves and unpacking boxes for displays. As the fines rolled in and the regulator’s reputation improved in his party’s hierarchy, he began taking on bigger fish and branched out to trap wine distributors that also handled spirits.

    Charges were filed against a couple of the really big distributors for similar merchandising infractions and some stratospherically punitive figures were tossed around in terms of the fines. A few weeks later the cases were withdrawn and the bureaucrat was transferred to the office in Indio or Blythe and was never again heard from.

    I wonder if something similar is happening in NY with the high profiles of Batali and Bastianich? While the practical producer -> importer -> restaurant/retail aspect of the three-tier system is well established, the exact wording of the regulations may not read the way the rules have been enforced. Maybe someone is attempting to make a little political hay by pursuing such well-known people.

    If successful, that’s the sort of signal that will be noticed at all levels of the wine import/distribution chain.

  3. Totally agree Bill!

  4. Sometimes it seems like the NYSLA will not be satisfied until there isn’t any liquor left in NY state to regulate.

  5. DFredman

    The SLA is handing out fines like (fill in the blank)

    Empire Merchants will pay $600k next week, while Bastianich pays out $500k.

    Interestingly enough, there is new legislation in the NYS Assembly and Senate that will give the NYS Liquor Authority more autonomy

    S2321A – KLEIN
    Provides that the state policy with regard to the alcoholic beverage control law shall be to promote economic development in the beer, wine and liquor industries
    03/18/14 1ST REPORT CAL.300

    “economic development” is a very loose term.

  6. […] The New York State Liquor Authority is threatening all the restaurants owned by the Batali and Bastianich Hospitality Group (including Babbo, Del Posto, and Eataly) with a $500,000 fine and the suspension of their licenses for six months. Tyler Colman has the details. […]

  7. Fines are “focused on the prohibition against being both a producer of wine (in whatever country) and a retailer of wine in New York State”

    Your state liquor authority is bravely protecting you from the great “wine shop/winery common ownership problem”. This has nothing to do with protecting the lucrative monopolies of liquor distributors…yeah right.

  8. America has long suffered, yet thrived, on the tied house laws that were enacted post prohibition to suppress monopolization and influence from tier to tier. One great example is how the phenom of the Craft industry rise in America is not seen as strong in the UK where a few large breweries own and control a majority of pubs and thus the lack diversity of distribution. All in all with B&B issue seems like an extension of the past issues they have had relating to retaining employees tips- keeping it all to themselves.

  9. As one who has attempted to sell highly regarded Italian wine to Eataly that is not tied to Bastianich or a Bastianich related distributor/connection, I can tell you that the door is slammed in your face rather quickly. There is ZERO chance of getting a meeting, much less sampling the wines and letting them stand on their own merits

  10. Charles,
    Not sure what that has to do with the story. My understanding is that all purchase decisions are based in Italy. That is no different than any national chain restaurants or many chain retail.


  11. Aaron:

    The regs are in place to prevent a wine producer from controlling both distribution and retailing.

  12. Aaron, whether buying decisions are done in Italy or in New York (my understanding is that it’s a combination of both), it is indicative of the illegal restraint of trade that occurs when the retailer/restaurant has a vested financial interest in the production of the wines that they choose to sell.

    It’s one thing for Eataly to shut out a potential wine vendor because they don’t like the wines, don’t like him or are just in a bad mood that day. It’s a fundamentally different proposition when those potential vendors are shut out because Eataly’s owners are also the owners of the wines that they do choose to sell. That, under longstanding US law, is illegal.

  13. I have no issue with a restaurant not buying from a particular importer

    Heck, in NY, there are 100s of importers. I bet most restaurants work with 3-5. Good restaurants probably have 20 suppliers. I am sure that this group has 20.

  14. Levi Dalton delved into this issue over on Eater for those who missed it:

    He indicates that the $500k fine and a six-month suspension of the Eataly Wine shop license s what B&BHG has already accepted. The infraction is selling a wine at retail that they also made.

    If this is the case, hopefully there will be a fuller explanation at the SLA meeting of why this situation was no longer tenable.

  15. […] Batali and Bastianich group threatened with suspension […]

  16. Should it also be illegal for restaurants to grow their own produce?

    It would be a shame to see the nacent farm-to-table movement go the way of the dodo bird.

  17. Clifford,
    This is a ‘tie-house’ alcoholic beverage issue, not one that impacts any other commodity in United States. Due to the 21st. Amendment, State rights trump Federal Laws except in the concept of ‘tied house’ or establishing an arms length relationship between the producer and the end seller so that they is no undo pressure and also does not create a monopolistic environment. The last part is what seems to be at issue here, coming from other importers etc.
    Your food enjoys the concept of ‘Fair Trade’ and is protected by the Commerce Clause in the United States, your wine and alcoholic beverages do not share in that protection.


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