Wednesday, March 15, 2017

Grocery stores can bulk up wine departments

Posted By on Wed, Mar 15, 2017 at 6:35 PM

WHO HAS THE MUSCLE? Not retail liquor stores. And Arkansas wineries may suffer from the new law that allows more out-of-state wines on grocery shelves.
  • WHO HAS THE MUSCLE? Not retail liquor stores. And Arkansas wineries may suffer from the new law that allows more out-of-state wines on grocery shelves.

Grocery stores with wine permits will be able to expand their selections come Oct. 1 under legislation signed Wednesday by Gov. Asa Hutchinson.

Nobody expected the governor to veto the bill, which broadens wine sales substantially for grocery stores. They are now only able to sell Arkansas and "small farm" wines. Retail liquor stores and the whiskey industry fought the bill. The Distilled Spirits Council had this to say today:

The Distilled Spirits Council today signaled disappointment that Governor Asa Hutchinson signed SB 284 into law, which moves wine into grocery stores and devastates local, Arkansas package stores.

“Instead of picking winners and losers, Arkansas should implement a plan that is consumer-friendly and provides a level playing field for beer, wine and spirits,” said Distilled Spirits Council Vice President Dale Szyndrowski. “We urge Governor Hutchinson and the Arkansas legislature to come back to the table and help retailers that were left out of this deal. We believe there is a fair approach to reforming Arkansas’ outdated alcohol laws that serves all parties.”

SB 284 would allow wine purchases in grocery stores, while spirits sales would remain segregated to package stores. According to an economic analysis, existing package stores are projected to lose an average of $90,000 in revenue annually, or about eight percent of store revenue. As a result, an estimated 35-40 stores would go out of business, costing 100-150 workers their jobs.

“Stakeholders came together in Colorado last year to craft legislation that allowed grocers to purchase the package store licenses of retailers within close proximity to grocery stores, thus not denying consumers access to beer, wine and spirits, while also protecting the value of the existing package stores. We urge Arkansas lawmakers to look to that model legislation in order to strike a compromise that benefits every stakeholder,” Szyndrowski concluded.
The spirits lobby never counted for much in this debate. More interesting now is whether the pushback from retail liquor stores, through several bills to improve their competitive position, will get any traction in the remainder of the session. What if, for example, grocery stores had to abide by the church/school distance rules that liquor stores have to follow to expand their wine sales? Or what about chaining? Or what about competition in the wholesale department? Let a thousand bottles bloom.

Arkansas wineries resisted the bill, too. They get a sop through a grants program and a promise of a wine visitors center in vineyard territory.

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