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Wine battle: Tennessee grocers go after sales ... again

November 14th, 2013 8:01 am by Nathan Baker

Wine battle: Tennessee grocers go after sales ... again

Steve Smith and Jarron Springer. (Photos by Lee Talbert/Johnson City Press)


Grocery store owners and wine and liquor retailers are gearing up for another fight over a bill allowing supermarket wine sales, which should be at the forefront of discussions when the General Assembly reconvenes in January.



A bill to grant food stores the ability to sell wine has been introduced in some form for eight consecutive years in Nashville, but in the last two was changed to give local municipalities the right to hold public referendums on the subject.



Tennessee Grocers & Convenience Store Association President Jarron Springer and Steve Smith, president and CEO of K-VA-T, parent company of Food City, said Wednesday that their goal is to put an end to the state’s outdated alcohol laws and open the market up for more competition.



“Thirty-six states already allow wine to be sold in supermarkets, so it’s clearly a majority of the states in the country,” Smith said during a meeting with the Press’ editorial board. “Some of the reasons those states don’t have it is just that they, very similar to Tennessee, have antiquated laws that are very hard, because certain people have financial interests, I think is the best way to say it.”



For years, wine and spirits wholesalers and their customers in the retail market have joined religious groups in opposition to any legislation allowing grocery stores to sell wine, saying expanded sales would put independent retailers out of business and increase cases of alcoholism and traffic deaths related to drunken driving.



Smith said studies have shown no relationship between new wine sales in grocery stores and increased alcohol abuse, and said healthy competition will produce a better market for consumers.



“I think it’s good any time you interject competition into a controlled environment, and let’s face it, while it’s not a pure monopoly, it is pretty tightly controlled, because there are a fixed number of licenses (for retail wine and liquor sales),” he said. “Whether folks knowingly or unknowingly get together on pricing right now, no one will ever know that, but I think the more opportunities that consumers have to make a choice, whether it’s price, variety, selection, they’ll win at the end of the day, because it’s competition that makes this country what it is.”



But Phil Scharfstein, owner of Johnson City’s One Stop Wines & Spirits and a member of the Tennessee Wine & Spirits Retail Association, said allowing wine in grocery stores will cost the state thousands of jobs from independent retailers. “The way it has been set for many decades is we only have a few products we can sell by law: high gravity beer, wine and spirits, that’s what we have been dealt to sell unlike the tens of thousands of items grocery stores can sell,” Scharfstein said. “We don’t really have the ability, the size or the capital to go up against the Krogers and the Food Citys. It’s just going to take revenue away from local businesses when they pull that.”



Smith said he and other grocers aren’t against allowing liquor stores to sell more products, including beer, but said alcohol retailer representatives have not cooperated during the drafting of the bill.



“It’s pretty bizarre if you think about it to be able to go into a package store and be able to buy a bottle of wine, but not be able to buy a corkscrew to open it with, or a bag of ice to have with your spirits or wine or a cup to put it in,” he said. “It’s time to upgrade those laws. It’s time to upgrade those for supermarkets, but it’s also time to upgrade them for the package stores, too. But the one thing we’ve had trouble getting these folks to do is sit down and negotiate or sit down and talk.”



Springer said his grocery store lobbyist group doesn’t have the knowledge to produce a law that will benefit liquor stores.



“This has always been a twoway street for us, it’s just not our position to decide what they should get or what changes should be made,” he said. “We shouldn’t write those amendments, we shouldn’t come with the whole package, that makes us look like we’re trying to ram this through and like it’s all our decision. All we’ve asked over the years is for them to come to the table and discuss it.”



For Scharfstein, however, allowing package stores to sell a few additional items won’t make up for the losses he expects from changes to the wine business.



“Unless it’s a really C-grade store that sells very little wine, I don’t see how you’re going to make up for it with a couple of bags of ice or a corkscrew here and there,” Scharfstein said.



Although it’s been on the legislative agenda for eight consecutive years, Springer said approval of what’s often referred to as the “wine in grocery stores bill” is now closer than ever.



During the last session, the bill reached the floor of the state Senate, but forward momentum was stalled on the House’s side when Jonesborough Rep. Matthew Hill cast a surprise vote in the Local Government Committee to keep it from advancing.



At the time, Hill said he cast the deciding vote because the bill’s sponsors were unwilling to discuss proposed amendments, but in September said he was open to reconsidering his vote when the General Assembly reconvenes in January.



Springer said the easiest and quickest way for approval would be if one of the committee’s “no” votes asked to reconsider the bill and then a majority of the committee approved the request.



It would allow the representatives to pick up where they left off instead of restarting the entire process in both houses.



“We’d prefer to just start where we left off, because that took a lot of work to get there and we’d obviously like to not have to trudge through that again, although we could and we have and we will if we have to,” Springer said. “As far as predicting what will happen with the Legislature, I won’t be here predicting what’s going to happen and if there will be reconsideration, but there could be, and I’ve read about that as a possibility.”



Both House Speaker Beth Harwell and Lt. Gov. Ron Ramsey have voiced support for the legislation to move forward.



Two months ago, Ramsey predicted the passage of the bill into law during the upcoming session



“We have great assets in our House speaker and our lieutenant governor, and we want to see how they want to proceed at this point,” Springer said. “We’re going to hit the ground running no matter what, so we’re pre paring ourselves and talking to those leaders. I can’t predict what’s going to happen, but think the committee is going to reconsider the bill, and I think they’re going to do it pretty quick.”

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