Grocers Continue Push for Wine Sales

Liquor store owners and grocery store chains are facing off for the third consecutive year over a proposed law change that would allow wine to be sold in supermarkets.

INSTANT MESSAGE: This sign at a local Kroger signals the continuing struggle between grocers and liquor store owners over selling wine at supermarkets. -- PHOTO BY TOM WILEMON

Signs went up in grocery stores in December, directing shoppers to a Web site where they can sign petitions in support of the legislation. Liquor store owners have also put up a Web site with a competing petition, but the president of the Tennessee Wine & Spirits Retailers Association says his organization is being outspent in the battle for public opinion.

“We don’t have the kind of money and the resources that these larger grocery store chains have in hiring public relations firms and doing big promotional campaigns,” said Josh Hammond, the general manager/owner of Buster’s Liquors, who is president of the association.

The people’s say
More than 20,000 Tennesseans had gone on record in support of wine sales in grocery stores as of October, and that number is rising, said Jarron Springer, president of the Tennessee Grocers and Convenience Store Association.

Hammond said people who sign the petitions probably don’t realize that changing the law will cause package stores, which are mostly small family-owned businesses, to lay off employees or possibly even close shop.

“I don’t think anybody would want to vote for legislation that’s going to put people out on the street,” Hammond said. “We have enough of that going on right now – as far as people looking for jobs and things of that nature. The grocery stores will not hire one extra person to walk their shelves. Local (liquor) stores that are locally owned and operated are tied in to the community.”

Springer countered that wine sales will increase by 33 percent to 50 percent if people are allowed to buy the product in supermarkets and convenience stores, resulting in job creation at the wholesale level.

“The number of jobs created through this bill would likely be more than the ones lost,” Springer said.

And he doubts that liquor stores will close.

“I don’t know that introducing wine to our stores just takes away the category in liquor stores,” Springer said. “Sales will increase 33 to 50 percent, the total category sales on sales that aren’t currently had. Your category is going to expand. It’s not shuffling chairs.

“Liquor stores will act as if all the wine sales that can possibly happen are currently happening. Economics will say the more supply you allow, the greater number of sales there will be – the more opportunity you have to buy the product.”

As more people discover wine through grocery retailers, they will seek out liquor stores, he said.

“The category will expand and that can be a positive for liquor stores because people will be exposed to products they currently aren’t,” Springer said. “Their palates will change. They will want some personal attention they are not going to get in the local grocery store or food store. They are not necessarily going to have a one-on-one person to tell them all about the wine. They will go to a liquor store to get that personal attention.”

For and against
But Hammond said he doesn’t think wine sales at grocery retailers will spur more business at Buster’s.

“To vote this in is basically to turn your back on small business, and it’s going to send profits out of state,” Hammond said, adding that most supermarkets and grocery retailers are not based in Tennessee.

Springer said the fiscal note attached to the bill estimates that allowing wine sales at grocery stores will generate more than $20 million in additional revenue for the state. Hammond also doubts this estimate.

“When it’s all said and done, people want to know how it is going to affect Tennessee in a fiscal manner,” Hammond said. “The way that fiscal note is drafted right now, there’s some serious questions as to how they are going to actually increase wine consumption by 50 percent by putting it in grocery stores. That’s what they are essentially saying with the fiscal note they have on this right now. We feel there are some serious holes in how they got their numbers.”

Selling wine in grocery stores will give shoppers greater convenience, Springer said, noting that five of the eight states that border Tennessee already allow such sales.

The Tennessee General Assembly is expected to convene its regular session in mid- to late January. Last year, legislators appointed a special committee to study the proposed sale of wine outside of package stores along with other alcohol-related issues.

The Web site for the Tennessee Wine & Spirits Retailers Association is www.twsra.com. The Web site promoting wine sales in grocery retailers is www.redwhiteandfood.com.