Wine bill flows past senators

Nathan Baker • Jan 31, 2014 at 8:59 AM

A bill to allow wine sales in Tennessee’s grocery, convenience and big box stores easily vaulted another hurdle Thursday in its sprint to being signed into law during this session of the General Assembly.

The state Senate approved the so-called wine-in-grocery-stores legislation by a 23-8 vote, leaving the bill in the hands of the House.

Similar bills, aiming to allow supermarkets to sell wine, have been proposed for more than a dozen years in the legislature but has yet to succeed, a laborious trial alluded to by the bill’s sponsor, Sen. Bill Ketron.

“For seven years, three weeks and four days, in some form or another, I have had this bill before this body,” Ketron, R-Murfreesboro, said Thursday, advocating a final amendment from the Senate floor. “There has been a lot of discussion from people coming from inside and outside the state. ... We have had all of those parties around the table affected by this bill, and Amendment 9 is the compromise that’s come out of this.”

In the form passed by the body, counties that currently allow either liquor by the drink or retail liquor sales can be petitioned to hold a referendum deciding whether to allow retail food stores to sell wine.

The bill defines those stores as those with retail floor space of 1,200 square feet or more that derives at least 20 percent of its taxable sales from food and food ingredients.

That definition has been confirmed to include traditional supermarkets, convenience stores and big box retailers with grocery components.

As concessions for the potential for lost sales, liquor stores were granted concessions in the bill, and starting in July will be allowed to sell a litany of new items if the bill passes, regardless of whether a community holds a wine referendum.

If the referendum does pass, properly licensed food stores can begin selling wine in July 2016, unless that store is within 500 feet of a liquor store.

The nearby liquor store can grant the food store permission to begin selling wine, but if it doesn’t, neither store can begin selling the new product lines until July 2017.

In Johnson City, one notable location will have to seek the special permission if it intends to sell wine: the Earth Fare supermarket on West State of Franklin Road, which shares a wall with One Stop Wines and Spirits.

A few subtle differences between the Senate and House versions of the bill will have to be reconciled before it becomes law.

The House version defines retail food store as having 2,000 square feet, 800 square feet larger than the Senate’s, and the House bill also sets up a $2,000 fee for the new wine license, more expensive than the Senate’s $850.

Both bills propose changes to Tennessee’s wholesaler law, which could bring new business into the Tri-Cities.

By current law, businesses wishing to sell or deal in alcoholic spirituous beverages at wholesale, selling exclusively to restaurants and package stores, can only be located in cities in the state with populations more than 100,000.

Under that law, the closest wine and liquor wholesaler to the Tri-Cities is limited to being based in Knoxville, but the bill passed Thursday would allow liquor and wine wholesalers to be licensed in counties with a population higher than 120,000, which adds five new locations, including Sullivan and Washington counties.

Beer wholesalers, which are governed by a different set of laws, already have distribution centers in all three of the Tri-Cities.

If the new statute remains in the bill and is signed into law, Washington and Sullivan counties could see wholesalers expand into the area, bringing with them new jobs and investment.

If wine in food stores is to be a reality in the Tri-Cities, the House bill must first be approved by the Finance Committee then pass a full floor vote.

Only then could a referendum be held locally, and if passed, bring wine to the first new retailers in 2016.

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