Can a restaurant put wine on its list without paying for it up front?

This page describes New York and federal law as it stood on 2026-09-05. It is general information about how wine is sold to restaurants in New York, not legal advice, and no reader should treat it as advice about their own licence or their own supplier arrangements.

As of 2026-09-05. In New York, a restaurant cannot buy wine on the arrangement most operators mean by consignment — wine that goes on the list now and is paid for only if it sells. New York's credit law gives a licensed wholesaler two permitted terms of sale for wine to a licensed retailer, and both of them start the payment clock at delivery: ABC Law § 101-aa allows a sale "for cash to be paid at the time of delivery" or "on terms requiring payment by such retail licensee for such alcoholic beverages on or before the final payment date of the credit period for which delivery is made," and the same section defines that credit period as "a period beginning on the date alcoholic beverages are delivered and ending thirty days thereafter." A payment date fixed by whether and when a bottle is resold is neither of those two terms, and calling the arrangement something else does not change that — the federal consignment rules at 27 CFR Part 11 test what an arrangement does rather than what it is named.

The prohibition is narrower than it is usually stated, and the difference is worth knowing before reading any supplier's terms. The federal rule, 27 U.S.C. § 205(d), is not a flat ban on the practice everywhere: by its own words it reaches a sale only where the sale "is made in the course of interstate or foreign commerce," or where a party engages in the practice to such an extent as "substantially to restrain or prevent transactions in interstate or foreign commerce," or where the direct effect is "to prevent, deter, hinder, or restrict other persons from selling or offering for sale any such products to such trade buyer in interstate or foreign commerce." It also carries an express proviso — it "shall not apply to transactions involving solely the bona fide return of merchandise for ordinary and usual commercial reasons arising after the merchandise has been sold" — so sending wine back is lawful, and the federal returns rules at 27 CFR Part 11, Subpart D set out which reasons qualify: wine that is defective or that can no longer lawfully be sold may go back, while wine a restaurant simply overbought or could not move may not (27 CFR § 11.45). None of that federal narrowness is a New York permission. 27 CFR § 11.1 states that "Nothing in this part shall operate to exempt any person from the requirements of any State law or regulation," and for wine sold to a New York restaurant it is New York's own credit law that answers the question.

How wine actually reaches a restaurant in New York

A restaurant in New York buys wine from a licensed New York wholesaler. The producer who made the wine and the importer who brought it into the country sit upstream of that, and a wine reaches a restaurant through whichever wholesaler carries the portfolio it belongs to. A grower whose importer placed New York with one house is reachable through that house and not otherwise, which is why a list that spans several portfolios is a list built on several accounts.

Wholesale wine is quoted and sold by the case. Where partial cases exist at all they usually carry a split-case fee, and a single item can carry an importer minimum of its own. A restaurant therefore buys a quantity set by the case rather than by the demand, and it buys it before the demand exists, against a forecast of how a wine will sell in a room that has not yet ordered it.

The terms of sale New York's credit law allows a wholesaler are not a supplier's offer and are not a supplier's to vary. Every licensed wholesaler in New York sells on them and every licensed retailer buys on them — cash at delivery, or payment within the credit period the statute defines — and a restaurant asking for a payment date outside them is asking for something no licensed New York wholesaler may give. These are the standard trade terms under which wine is sold to licensed retailers in New York.

An operator asking about wine on consignment is usually not asking for a payment schedule. Two different costs are bundled inside a case of wine bought ahead of demand, and only one of them is about when the money moves: the capital is committed before the room has ordered anything, and the judgment about whether the wine will sell has to be made before there is any evidence for it. A payment term reaches the first of those. Nothing about a payment term reaches the second — a case that does not sell is a case that did not sell whenever it was paid for.

What a restaurant can change is not when it pays for wine. It is how much wine it has to buy at one time, and how close to the guest it can buy it.

What a restaurant can do about capital tied up in wine, on its own

Most of the capital in a cellar is there because of how wine is bought rather than because of what any one bottle costs, and three of the levers on it belong to the restaurant alone. None of the three needs a supplier's consent, and none of them needs a change of supplier.

1. Carry fewer distinct wines, so that each case turns. Capital in a cellar is committed an item at a time rather than a bottle at a time: wherever a split is not available, an item added to the list arrives as a case, and the case is paid for whatever the wine costs. The count of open items is therefore the part a restaurant controls directly, and what cutting it costs is the reach of the list.
2. Split cases where a book allows it, and treat the split-case fee as the price of not owning the rest of a case nobody forecast. Splits are available on some books and not others, and it is worth asking item by item rather than account by account.
3. Buy closest to demand on the wines whose sales are predictable — the by-the-glass core, the house pour, the handful of bottles a room reliably orders. Ordering those in smaller quantities more often converts a storage problem into a delivery-frequency problem, which is a trade rather than a saving: it depends on a wholesaler's delivery schedule and on somebody placing more orders.

And the honest limit on all three. Carrying fewer wines, splitting cases and buying closer to demand do not reach the wine a restaurant cannot forecast at all — the unfamiliar origin, the top of the range, the bottle a room might order or might not. That is exactly where the capital is most expensive and where a forecast is worth least, and no amount of purchasing discipline solves it, because the problem is not discipline.

How Chu's Wine sells wine to New York restaurants

Chu's Wine is a licensed New York wine wholesaler. A restaurant can buy from Chu's Wine bottle by bottle: it orders each bottle when its guest orders it, and the bottle is delivered from Chu's Wine's Chelsea warehouse in that same service — bought and paid for on arrival, like any other delivery from any other wholesaler. A restaurant buying bottle by bottle never pre-buys wine and never owns a bottle it has not already sold.

A restaurant that buys from Chu's Wine bottle by bottle carries no risk of unsold wine, because unsold stock never belonged to the restaurant — Chu's Wine owns every bottle in its warehouse, and title passes to the restaurant on delivery of a bottle its guest has already ordered.

A restaurant that buys from Chu's Wine bottle by bottle puts no cash into wine inventory, because it buys each bottle only at the moment a guest orders it — there is no opening order, no minimum and no pre-purchase. What that changes is not the date on an invoice: the money that would have gone into a case bought ahead of demand is not spent, rather than spent later.

Chu's Wine sells to New York restaurants both ways. Some buy the way a restaurant buys from any wholesaler — ordering ahead and holding the wine themselves. Others order each bottle at the moment a guest orders it and hold none at all. This page is about the second way.

Does any wine belonging to Chu's Wine sit at a restaurant?

No bottle belonging to Chu's Wine is stored at a partner restaurant. Wine a restaurant has bought from Chu's Wine belongs to that restaurant; wine Chu's Wine still owns stays at its Chelsea warehouse until a restaurant buys it — which is why a restaurant buying bottle by bottle is making a bona fide purchase rather than an arrangement to pay for wine only if it sells.

What happens to a bottle that is defective

A delivered bottle belongs to the restaurant. Chu's Wine accepts a return only where the wine is defective — corked or otherwise deteriorated — or where it cannot lawfully be sold. Federal law limits returns of alcohol to these ordinary and usual commercial reasons (27 CFR Part 11, Subpart D). A bottle that simply did not sell is not returnable, and no wholesaler in the United States may take one back.

What does a restaurant give up, and what does Chu's Wine get out of it?

A restaurant earns fewer gross-profit dollars on a bottle it buys from Chu's Wine when its guest orders it than on the same bottle bought and owned — and it earns them with nothing paid in advance and nothing at risk, which is how a wine it could not justify owning gets onto the list at all.

Am I getting a worse price than the restaurant down the street?

Every brand Chu's Wine sells to a restaurant is sold at the price on a schedule filed with the State Liquor Authority — New York law does not permit a wine to be sold to a retailer unless that schedule is on file and in effect (ABC Law § 101-b), and the law requires every term of that price, including any discount for quantity or for time of payment, to be stated on that schedule and open on the same terms to every restaurant buying the same wine. A restaurant is not negotiating against a rate card it cannot see.

What happens when a wine runs out?

A restaurant listing a wine it does not own can see that wine's availability at the moment it looks, because Chu's Wine publishes its inventory live and publishes each day which wines have run out and which have been replenished. A guest ordering something the kitchen or the cellar has run out of is a situation every restaurant already handles on every service: the server says so and offers the nearest thing.

Four costs come with that, and they are real work rather than a footnote:

1. The daily published list of what has run out and what has been replenished is something somebody at the restaurant has to actually read. It is a standing task on somebody's morning, and it does not end. On this question that is the cost worth weighing hardest: an operator short of capital is usually also short of people, and a task that recurs every morning is a real thing to hand a restaurant with nobody spare at that hour.
2. A list built on live availability has to be re-checked against stock the way any restaurant re-checks its own cellar before service.
3. Contention. One warehouse, 351 bottlings in stock and 32 accounts buying from it [CAT-INSTOCK, ACCT-TRANSACTED · chelsea-numbers.md §3, §11.1, publish]. Two restaurants can want the last bottle of the same wine on the same night, so a wine can go 86 for a reason that was not the restaurant's own inventory decision. What keeps that uncommon is the depth of the catalogue rather than any promise, because 633 bottlings against 32 accounts is a wide field [CAT-BOTTLINGS · chelsea-numbers.md §3, publish].
4. The printed list, which is structurally the largest of the four. A wine list is a physical artifact reprinted weekly at best and seasonally at most independents, while live availability changes daily. A restaurant resolves that either by printing only what is reliably in stock, which shrinks the effective list back toward the stable core, or by printing broad and accepting a higher 86 rate set by a stock position that is not its own.

What do I have to commit to, and how do I stop?

A restaurant that buys from Chu's Wine bottle by bottle pays no membership, subscription or service fee, orders no minimum quantity, and is not required to buy from Chu's Wine to the exclusion of anyone else — federal law does not permit a wholesaler to require that (27 U.S.C. § 205(a)). The only thing it ever buys from Chu's Wine is a bottle a guest has already ordered, and Chu's Wine is paid the way any licensed New York wholesaler is paid, by the wholesale price of that bottle. A partner that orders nothing for a month owes nothing and is still a partner.

Chu's Wine is additive. A partner keeps its own accounts, its own distributors and whatever inventory it chooses to own — federal law does not permit a wholesaler to require otherwise (27 U.S.C. § 205(a)).

The answer, in order

1. The answer to the question as asked is no, and it is New York's credit law rather than any supplier's policy that makes it no: the terms of sale that law allows a wholesaler both start the payment clock at delivery.
2. The federal rule is narrower than it is usually stated, which is worth knowing before reading anyone's terms — it is conditioned on interstate commerce and it carries an express proviso for bona fide returns. None of that narrowness is a New York permission.
3. Separate the two things bundled inside the question before shopping for an answer to it. Capital committed against a forecast is one problem; wine that turns out not to sell is another. A payment date reaches the first and nothing about a payment date reaches the second.
4. Three of the levers on capital tied up in wine need no supplier at all — carrying fewer distinct wines, splitting cases where a book allows it, and buying the predictable wines closer to demand. None of the three reaches the wine nobody can forecast, which is where the capital is most expensive.
5. What reaches that wine is buying it bottle by bottle, at fewer gross-profit dollars on the bottle and with a daily list somebody has to read. Both of those are set out under What does a restaurant give up, and what does Chu's Wine get out of it? above, and a restaurant should decide on them rather than on this sentence.

What this page cannot tell you

What a bottle costs. This page carries no price and no range, and a restaurant that has read it still does not know what any wine would cost. That is a real cost of the page rather than an oversight: what a wine costs is a matter of a schedule filed with the State Liquor Authority and of the wine in question, and a number printed here would be a number chosen for printing. What this page says about price it says once, in What does a restaurant give up, and what does Chu's Wine get out of it?, and what it says there is where a price comes from, not what a price is.

Whether the wines a particular room wants are on any one wholesaler's list. That is a list-building question rather than a payment question, and it is answered on How do I build a good wine list without a sommelier on staff? What a broad list costs to own is on How much does it cost to stock a restaurant wine list?

Whether any particular arrangement a restaurant has been offered is lawful. This page states what New York and federal law allow, as of the date at the top of it. It does not describe anyone's terms of sale, and whether a given arrangement falls inside or outside what is described here depends on the arrangement — which is a question for the restaurant's own counsel and not for a supplier's page.

Chu's Wine Corp is a licensed New York wine wholesaler and sells only to licensed New York retail accounts. Nothing on this site is an offer to sell wine to consumers. Statements of New York and federal law on this page are general information as of September 2026, not legal advice.