Tennessee Voters Put Wine in Supermarkets

Ballot measures in 78 municipalities—covering 70 percent of the population—passed
Nov 7, 2014

After a seven-year fight in the state legislature, Tennessee voters decided whether they should be able to buy wine with their groceries. Thanks to a law passed this year, voters in 78 different municipalities approved ballot proposals allowing wine sales in grocery stores. Those areas are home to approximately 70 percent of the population. "I never thought I'd see this day," said Rob Ikard, president and CEO of the Tennessee Grocers & Convenience Store Association (TGCSA).

After years of legislative wrangling that pitted grocers against liquor store owners and wholesalers (and lobbyists representing all sides), in March lawmakers in both chambers passed Senate Bill 837 and Gov. Bill Haslam signed it, allowing wine sales in grocery stores—theoretically. Under the law, each municipality in the state had until August to collect signatures from at least 10 percent of their populations to get a proposal to allow wine in grocery stores on their local ballot on Nov. 4.

Ultimately, 78 municipalities held a vote and all 78 passed the measure. The localities include population centers like Nashville, Memphis and Knoxville but, as State Sen. Bill Ketron, the initiative's primary supporter put it, "even little cities. I used to represent Mount Pleasant down in Maury County. They only have one grocery store, and they passed it." Ketron estimated about 4.5 million people in a state of around 6.5 million would be able to buy a bottle of wine at a supermarket beginning in July 2016.

"We'd run it up the flagpole one year and it wouldn't get very far, but then the next year our effort would get a little farther and so on because the people wanted it," said Ikard. "The thought behind the movement all along was that Tennesseans want to be able to buy wine where they buy food. And now a mother who is preparing a nice meal for her family who wants a bottle of red for her and her husband does not have to go to two different stores."

The key to getting supermarket sales out of the senate chamber and onto the shelves, said Ketron, was the ballot maneuver. "I finally changed the language in the bill and said, 'OK let's just put it on a ballot and let the people decide.' So it took some pressure off of the legislators who didn't want to be perceived as voting for wine." From there, TGCSA's get-out-the-vote organization worked to fill ballot petitions and lobby voters.

Small wine retailers got concessions as well, and those went into effect this past July. Retailers can now sell beer, mixers, cigarettes, snacks and ice as well as wine and liquor. They may now open multiple locations and apply for licenses to serve, meaning they could open a restaurant next to their store.

New markup requirements in the law are designed to prevent large stores from undercutting small ones through sheer purchasing power. " I think it's a win-win," said Ketron. "For those [small] retailers who embrace this change, they'll do very well. For those who don't have that entrepreneurial spirit, they may perish." Wholesalers, whose premises were previously restricted to municipalities with populations over 100,000, may now expand their premises into some less populous areas.

How will this affect the local wine industry? "There's absolutely an interest [among] Tennessee grocers to have Tennessee wines represented on their shelves," said Ikard. But not many Tennessee wineries are big enough to be competitive at supermarket prices, according to Tennessee Farm Winegrowers Alliance president Don Collier.

But there are incidental benefits. "We feel the [increased] availability of wine, the ease for the consumer, is going to increase wine consumption," said Collier. "As most wine people are adventurous, these new converted wine drinkers are going to expand out into trying some of the local wines. That's where the Tennessee wine industry will benefit."

Tennessee's path to wine in supermarkets has been a laborious one, but provides a potential template for the remaining states that still prohibit it. "I know New York and some other states have been watching us to see if we could pass this legislation, and I think we showed them the way now," said Ketron.

Legal and Legislative Issues United States News

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