State lawmakers said Wednesday they expect to leave Albany for the year without passing legislation to allow grocery stores in the state to sell wine, but remain hopeful they'll modernize another part of state liquor law to help restaurants and small businesses.

Key New York alcohol distributor Empire Merchants withdrew its opposition to a bill that would permit restaurants and taverns to buy up to six bottles of liquor from local stores per week in between shipments after lawmakers amended the proposal late last week.

"Anything to do with alcohol is difficult to change, but retail-to-retail is probably the only thing still left that's breathing right now," Assembly sponsor Al Stirpe told Spectrum News 1 on Wednesday.

The proposal to update the state's Alcohol and Beverage Control laws has a chance to clear the Legislature as the Senate prepares to conclude legislative business by week's end. The Assembly will conclude session Tuesday.

But Stirpe and state Sen. James Skoufis — lawmakers who lead changing state liquor policy — said a bill to give supermarkets licenses to sell wine, beer and cider products needs more work when session ends.

It's legal in 40 other states, but could threaten to put small family-owned liquor stores out of business if it isn't done the right way.

The bill, backed by three-quarters of New Yorkers, was recently changed to let liquor stores sell snacks, tobacco and drink mixers, but Stirpe said the amendments don't go far enough to negatively impact local businesses.

"Distilled spirits sales in the state are down about 15%," Stirpe said. "That's because a lot of people use cannabis now, instead." 

Stirpe, Skoufis and other lawmakers Wednesday said they have heard that Gov. Kathy Hochul has considered including a provision in her executive budget to legalize wine sales in grocery stores. The governor has not included it in a proposed spending plan to date.

The state's main alcohol distributors have led pushback for years against changes to the state's beverage contol laws, which date back to Prohibition.

Distributor Empire Merchant told Skoufis this week that the company has rescinded its opposition to legislation to let restaurants and taverns buy up to six bottles of liquor from a local store when they run out. The original proposal permitted restaurants to purchase up to 12 bottles per week.

Restaurants often decide to break the law to get what they need for an event in between shipments from the wholesaler.

"We added some more guardrails around reporting requirements," Skoufis said. "I'm hopeful that's enough to get this across the finish line now."

State senators are expected to vote and pass the measure Thursday.

The senator said distributor Southern Glazer's Wine & Spirits remains opposed to the change no matter how the measure is amended. But several lawmakers hope the withdrawal of other opposition will give it a chance to clear the Assembly for the first time.

"We should put some guardrails on it, legalize it, and let everybody move on," Stirpe said.

With hundreds of bills to get through in a matter of days, lawmakers said they remain cautiously optimistic this will be the year that the retail-to-retail bill will reach Hochul's desk.

"We respect the three-tier system of producer, distributor, retailer while also still giving this much-needed flexibility to restaurants and bars to accommodate in these emergency situations where they run out of alcohol and can't wait for the next truck to come by and deliver," Skoufis said.

Legislation to let liquor store owners have more than one retail license also isn't expected to get over the finish line this year.

The State Liquor Authority, known as the SLA, does not comment on, or take positions on, pending legislation.