When two special interests clash in the Tennessee Legislature, the usual procedure is for the leadership to tell the lobbyists for both sides to go get in a room and reach a compromise they can live with. It works a lot of the time. The problem comes when the issue has a broad impact on people, because there is one interest missing in the negotiation. That would the consumer. The taxpayer. The voter.
The wine-in-grocery stores bill that passed the state Senate last week was supposedly the result of a negotiation between liquor-store owners and grocery stores. It doesn’t look like much of a negotiation; it appears that the liquor-store owners wrote the bill. They get a two-year head start to transition their business, and consumers have to wait over two years to get wine in the grocery.
The bill still has to go through House committees and a conference committee, where the final provisions will be decided. Given the one-sided nature of the present bill, it’s possible some provisions will be changed. At present, liquor lobbyists Tom “The Golden Goose” Hensley and David McMahan took the grocery boys to school. Hensley has kept the liquor monopoly in place for decades, and McMahan is the Goose for the next generation.
I can’t imagine that liquor-store owners would want anything they don’t already have in the bill, if they accept the fact that wine in grocery stores is inevitable. They get to sell cigarettes, lottery tickets, and a wide variety of products beginning in July. But there will be no wine in groceries until two years later, assuming a referendum passes.
The writers of the bill bent over backward to protect the existing liquor stores. You can’t blame the liquor lobbyists for fighting a rear-guard action to get the best deal they can for their clients. And you can’t blame liquor-store owners for trying to protect and retain a monopoly on a good part of their inventory. But the legislators ought to take some passing notice of what’s good for consumers.
It was, perhaps, a strategic error for proponents of wine in groceries to make the convenience argument—picking up that Merlot to go with the steaks. The proponents haven’t made a public campaign thus far that volume purchases by supermarkets and Walmart could bring down the price substantially, so to now suggest that the legalization won’t give the consumers a price break may be a little late.
But free-market Republicans are voting to set prices. The bill tells the grocery stores they have to have a 20 percent markup over the wholesale price on the wine they sell. No discounts? No price break for the consumer? No loss leaders?
One strange provision in the bill would require a grocery to get a letter from a nearby liquor store giving it permission to sell wine. This is a transition feature that expires in 2017. The argument is that some liquor stores are in shopping centers where the grocery is the anchor tenant. This gives the liquor store some leverage should its rent increase substantially. It sets up a negotiation.
If there are any proposed changes in the Senate bill in the House or in conference committee, there will be an outcry for not sticking to the deal. And if the bill passes in its current form and revisions are proposed next year, the cry will again go up that critics are not sticking to the deal.
And while the deal is a deal between the lobbyists, is it asking too much for the Legislature to look at it and ask if the consumer’s interest is being protected?
Price-conscious wine consumers can continue to drive down to Atlanta and buy cases of wine from Costco. Somehow supermarket wine sales in other states have not put liquor stores out of business. One suspects they will continue to thrive in Tennessee.
Especially if they continue to write the liquor laws.