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VOL. 128 | NO. 23 | Monday, February 04, 2013

Spirited Debate

Contentious bill allowing wine sales in grocery stores hits legislature

By Sarah Baker

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The accessibility of wine for Tennessee residents could soon increase tenfold. 

Gary Burhop, owner of Great Wines and Spirits, stocks wine at his store in Regalia Shopping Center. Burhop opposes grocery stores carrying wine because they will lack the selection and knowledge of liquor stores.

(Photos: Lance Murphey)

State Sen. Bill Ketron, R-Murfreesboro, and state Rep. Jon Lundberg, R-Bristol, introduced on Thursday, Jan. 31, their bills – SB0837 and HB0610, respectively – to end the exclusive right of liquor stores to sell wine in Tennessee.

If passed, the referendum legislation would let Tennessee voters decide where they can buy wine, including in grocery stores, supermarkets and retail food stores. Grocery store sales would be limited to wine with an alcohol content capped at 18 percent and beer with an alcohol content of no more than 5 percent.

Jarron Springer, president of the Tennessee Grocers & Convenience Store Association, released a statement Thursday, Jan. 31, that said nearly 70 percent of Tennesseans want to buy wine where they shop for food.

“It’s time to let Tennesseans vote on the sale of wine in retail food stores,” Springer said. “Local referendums have been used for decades in Tennessee to determine retail package store and liquor-by-the-drink locations. It makes sense to apply that same vetting process to wine in retail food stores.”

Other supporters of allowing wine sales in grocery stores include Kroger Co. and Memphis-based Superlo Foods, as well as the Red White and Food coalition of 25,000 Tennesseans who want the right to buy wine at retail food stores.

There are 36 states – including six of Tennessee’s border states – that sell wine in retail food stores, the majority of which Kroger has a presence in.

“We get enough customer requests for wine in our stores that it just makes sense to do it out of a convenience thing,” said Joe Bell, manager of marketing and public affairs with Kroger Delta Division. “Our (stance) is more of taking care of the customer and providing them what they want, whether it be wine or any other product.”

Tennessee lawmakers in the past have made attempts to stop the exclusive right of liquor stores to sell wine, but liquor stores so far have successfully lobbied to table or kill the measures.

For example, a bill (SB 0316) to create an additional class of licenses allowing the sale of wine at certain retail food stores in areas where liquor stores are allowed was nixed in April 2011.

Bell said there has to be a coexistence with grocery and liquor stores.

“All we’re asking for is a free market situation and you don’t have that with wine,” he said.

Meanwhile, opponents argue the change in wine accessibility would unfairly disrupt the existing liquor store business and laws the industry has had to abide by for years.

“This bill does nothing but hurt small businesses and will cost jobs all in the name of convenience for a select few and for large big box retailers like Walmart and Kroger – who will not hire one extra person to work their aisles – to grab our profits and send it out of state,” said Josh Hammond, president of Buster’s Liquors & Wines and head of the Tennessee Wine & Spirits Retailers Association.

A proposed bill in the Tennessee legislature would allow the sale of wine in grocery stores, a move opposed by liquor stores such as Great Wines and Spirits in East Memphis. 

Supporters of the bill say that wine in grocery stores would increase tax revenues. But Hammond calls it an “unsubstantiated dangling carrot to lure legislators.”

“There is absolutely no proof wine tax revenue would double because it’s sold in grocery stores,” Hammond said. “The pie is only so big and this bill will dilute wine sales for many Tennessee small businesses.”

Data from the Tennessee Alcoholic Beverage Commission show that there are 586 licensed liquor stores in the state. But without the definition of the grocery stores being limited, businesses selling items as small as a bag of potato chips on every corner store in the inner city could be selling high-proof alcohol, said Gary Burhop, owner of Great Wine & Spirits in Regalia shopping center.

“Public policy doesn’t need that many additional outlets for alcohol,” Burhop said, adding that if grocery stores are permitted to sell wine he’d be forced into early retirement. “Grocery stores skim off the high volume products and that’s a significant portion of our business. What would happen is that basically the wide selection that consumers currently enjoy would disappear.”

Opponents also say the increase in supply would make higher-alcohol drinks more widely available to minors. Peter Margolin, senior vice president/sales of Star Distributors Inc., said anytime laws start changing, “you’re opening up Pandora’s Box.”

“If it’s very ambiguous or very amorphous, depending how they write the law, we could have a lot more accounts we have to service,” Margolin said. “We’re in the business to sell more product, but we also know that we have to be careful on how we handle it. We realize it’s a controlled substance and we need to be careful on how it’s sold.”

The vote would be placed on the ballot during the next general election, and the authorization law would take effect on Jan. 1, 2014.

But before that, a petition for the referendum has to be presented to the county election commission with signatures from 10 percent of the county’s population that voted in the last gubernatorial election.

Tennessee Gov. Bill Haslam has indicated he will sign a proposal into law allowing wine in grocery stores if it is passed by lawmakers this year.

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