Wine in grocery stores split into two bills, clears two House committees

Proponents of legalizing wine sales in grocery stores unveiled a new compromise with the liquor store lobby Tuesday, then deployed a new strategy to bypass a potentially hostile House committee.

At least on its debut day, the somewhat convoluted plan worked.

After years of failure for similar legislation, both the House and Senate are now positioned for final approval of permitting retail wine sales outside of liquor stores within a week.

The proposed compromise, negotiated by lobbyists for the opposing sides with prodding from House Speaker Beth Harwell and Senate Speaker Ron Ramsey, was packaged into a bill sponsored by Rep. Ryan Haynes, R-Knoxville, then approved by the House State Government Committee that he chairs.

Meanwhile, last year’s wine-in-grocery-stores bill was whittled down to do nothing except allow city and county governments in areas that now permit liquor sales to hold referendums on grocery store wine sales within their jurisdictions. In that form, it passed the House Local Government Committee which had killed broader bill last year.

Among key provisions of the compromise proposal:

–Wine sales would be allowed in stores with at least 2,000 square feet of floor space, provided at least 20 percent of the facility’s gross sales is in food products, defined as items treated as food for state sales tax purposes.

–Wine would have to be sold at 20 percent more than wholesale cost, a provision that would block large-volume stores from cutting prices below those of competing liquor stores.

–Local referendums could be held as early as the November election, but actual wine sales in grocery stores would not become legal until July 1, 2016. The prohibition on wine sales would continue for stores located within 500 feet of an existing liquor store – unless the existing liquor store approves – until July 1, 2017.

–Sunday sales of wine would be prohibited in the grocery stores. State law requiring liquor stores to close on Sundays would remain in effect.

–Liquor stores, now banned from selling anything but wine and liquor, would be authorized to sell beer, cigarettes, non-alcoholic beverages, party supplies, gift cards and other products “related to or incidental to the use of” alcoholic beverages. There is a wide-ranging list of the latter, ranging from snack foods and corkscrews to cheese and books on beverage topics.

-Liquor stores would be allowed to make deliveries to their customers.

“I think it creates an environment were my client can continue to prosper,” said David McMahan, lobbyist for a retail liquor store association.
Haynes, who has previously opposed wine in grocery stores legislation, said he is responding to constituents and the new legislation the “best balancing of interests of businesses and consumers.”

The compromise was adopted as an amendment to a Haynes bill (HB47) that, as introduced and passed by a subcommittee, that reduced the length of time one must be a Tennessee resident to obtain a liquor sales license. The 30-page amendment completely rewrites the bill and deletes the original provisions –a move Rep. Kent Williams of Elizabethton, the Legislature’s only independent member, called “deceptive.”

Still, it was approved on voice vote by the House State Government Committee with just three members having themselves recorded as voting no.
Meanwhile, the original wine-in-grocery stores bill (HB610) was amended to strip all provisions except those dealing with rules for a local referendum – over protests of a handful of House Local Government Committee members.

The committee had killed the bill in its original format last year, but sponsor Rep. Jon Lundberg, R-Bristol, arguing that it now simply gives citizens the right to vote and decide an issue. The committee’s chairman, Rep. Matthew Hill, R-Jonesborough, was among those who voted against the bill last year but voted for it in the referndum-only form. The final committee vote was 13-3.

Rep. Steve Hall, R-Knoxville, voted against a preliminary motion to allow reconsideration of last year’s rejection of the measure. But once it had been amended only deal with a referendum, Hall joined in voting for it.

Both bills now go to the House Finance Committee, where Lundberg said they likely will be combined into one bill before being sent on toward a House floor vote. The Senate is expected to amend the compromise into the original wine bill on Thursday, when the measure is scheduled for a floor vote.

Williams contended the legislation is “opening a can of worms” and raising the question of “where do we stop” in making alcohol and intoxicants more available, predicting the next step would be liquor sales in all types of stores and noting that Colorado has legalized marijuana.

Haynes said the bill actually “strengthens” control over alcohol by requiring all sellers – liquor stores as well grocery stores – to check identification of all purchasers.

Note: The proposed compromise on wine and grocery stores is in the form of an amendment to HB47, sponsored by Rep. Ryan Haynes, R-Knoxville. Text of the amendment is HERE.

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