Who Won? Liquor Stores in the Short Run, Groceries in Long Run, Consumers Never.

The leaders of the state House and Senate have decided not to appoint a conference committee to try and modify the one-sided wine in grocery stores bill. The bill gives liquor store owners a two-year head start to start selling cigarettes and other items before groceries get wine, and also prevents groceries and big-box stores from selling wine at a discount.

Rather than risk the bill being derailed in an up or down vote, the Senate was set to conform to the House version this week, pass it, and send it to the governor. The thinking is that once wine in groceries is passed, and legal, it can be “fixed” later. No one wanted to have the entire bill derailed at the last minute arguing about changes to “the deal.”

It appears, at first blush, that the liquor lobbyists have won the battle. But they haven’t really. It was a rearguard action that garnered liquor store owners concessions, but in the long run the grocery stores win. It will take funding a referendum and over two years to achieve it, but in the final analysis the grocers will get what they want. The ability to sell wine. They are thinking long-term.

Petition drives for a referendum shouldn’t be too hard. Anyone doing a petition drive usually stands in front of a Walmart or grocery store asking people to sign. How much easier is it if the big-box store or the grocery is doing the asking—with professional solicitors?

The real losers with this bill are the consumers who will not benefit from loss leaders, sales, and the ability of grocery chains to buy in bulk and sell at a cheaper price. A 20 percent markup is required. Six Buck Chuck, anyone?

The history of major legislative compromises being “fixed” later is not good. I remember when the Legislature passed an increase in the gas tax, but exempted diesel fuel. It was said they would get back and equalize the rates later. That was over 20 years ago and it hasn’t happened yet. (The state tax on diesel fuel is 4 cents less than gasoline.)

When the BEP started in the early 1990s there was a prohibition against using student test scores to evaluate teachers. The thinking was to allow three years of testing before using the data, because using one year would not be fair. Scores used as part of teacher evaluations did not appear again until the second term of Gov. Phil Bredesen, spurred by the competition to get Race to the Top money from the feds.

So a “fix” for the liquor bill isn’t likely to happen any time soon, if ever.

As is often the case in the Tennessee Legislature, the lobbyists got in a back room and worked out the terms of a deal. If both sides decide they can live with it, the Legislature decides it must be the correct solution. The only faction not represented in the lobbyist negotiations is the consumer—the taxpayer.

Whether it’s cable regulations, financial institution regulations, or a host of other competing special interests, the final bill will pass as long as the lobbyists have reached a compromise.

The time-honored tradition of letting the lobbyists call the shots is business as usual, does not cause comment and seems to insulate leaders like Lt. Gov. Ron Ramsey and House Speaker Beth Harwell from the charge that powerful lobbyists really run the Legislature. They do not seem offended by the situation in which Tom “Golden Goose” Hensley and David McMahan, the liquor lobbyists, wrote a bill with provisions they didn’t favor and then passed their version through both houses.

The speakers seem to have a lot of power when it comes most legislation, like education or gun laws. But when it comes to business and special-interest money they appear to be powerless.

You can argue about who won the liquor debate. Liquor store owners in the short run, grocery stores in the long run.

But we do know who lost – the consumers.

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Comments » 1

Tess writes:

Good lord! Wine is sold in grocery stores almost everywhere except here. The prices, from my recollection are about the same. If you don't like the price offered at the grocery, then don't buy it there. But, we are joining the rest of the country by offering it for sale along with grocery items.

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