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Tennessee wine-in-grocery-stores advocates say chances for passage better

NASHVILLE — For the seventh year in a row, the Tennessee legislature will consider allowing wine sales in grocery stores, and supporters say they believe it has its best chance of approval.

But that doesn’t mean passage is a certainty, or possibly even likely, in the 2013 legislature that opens Jan. 8. Both sides have powerful backers and agree it will be an uphill battle for approval.

A consensus is building among wine-in-grocery supporters for a bill to allow voters in local communities to decide the issue through referendums, rather than a blanket statewide approval. The bill is sponsored by Sen. Bill Ketron, R-Murfreesboro, and Rep. Jon Lundberg, R-Bristol.

Referendums could only be held in towns, cities and counties with retail liquor stores or liquor by the drink. That approach mirrors Tennessee laws that let local voters decide whether to allow the sale of liquor in package stores and by the drink in restaurants and bars.

Polls indicate a majority of Tennesseans favor wine in grocery stores. Separate statewide polls in 2011 by Vanderbilt and Middle Tennessee State universities showed 65 percent (Vanderbilt) to 69 percent (MTSU) of those surveyed favor the change. Even when the Vanderbilt Poll asked a second question noting that “opponents argue it would benefit large chain stores while hurting locally owned businesses,” 59.6 percent still said grocery stores should be allowed to sell wine.

“The public wants wine in grocery stores no matter how you frame the question,” VU political science professor John G. Geer, co-director of the Vanderbilt Poll, said this month.

Tennessee is among 14 states that prohibit wine in grocery stores.

Ketron, who has sponsored similar bills for several years, said the reasons why its chances are improved include the referendum clause, the non-election year session and the new backing of the legislature’s top two leaders.

“I’ve made it quite clear I believe it’s time for grocery stores to be allowed to sell wine — and I believe Tennesseans want that — but we want to do it in a way that creates an equal playing field for the mom-and-pop stores as well,” said House Speaker Beth Harwell, R-Nashville.

Senate Speaker Ron Ramsey told The Associated Press the issue is “one of those we’ve battled forever. And I think the opponents have held it off for about as long as they can hold it off.”

Both legislative chambers now have Republican majorities big enough to conduct business, change rules and approve bills with no Democratic votes. And one GOP mantra has been free markets.

“Is it fair for the government to guarantee their liquor stores’ freedom from competition,” said Nashville lawyer Dan Heiskell, a former administrator at the Tennessee Alcoholic Beverage Commission now lobbying for the Tennessee Grocers & Convenience Stores Association, which supports the bill. “We have created a government-imposed monopoly.”

Heiskell, a Memphis native, said the chances of the bill passing “are clearly better this year because of the open and visible support of leadership.”

But not all leadership.

Gov. Bill Haslam and both the House and Senate Democratic leaders express reservations about changing the rules governing liquor stores after their owners have invested thousands, sometimes millions, of dollars in them.

“If it went to a vote, I think it would probably pass,” said Haslam, whose administration will not take a position on the bill. “The flip side is those 500 or so liquor store owners all made an investment based on a certain set of rules. I do think … they have a seat at the table in this argument.”

Liquor wholesalers and retailers oppose the bill. Josh Hammond, owner of Busters’ Liquors & Wines in Memphis and president of the Tennessee Wine & Spirits Retailers Association, called it a “jobs and small business killer.

“Wine and spirits retailers will have to lay employees off and many will have to close. Where will the jobs come from? Certainly not the grocers. They’re not adding square footage or shelf space. They won’t need to hire one extra person.”

Hammond said “corporate grocers like Kroger, Wal-Mart and Publix” are pushing the bill. “One of the things we’ve noticed the bill sponsors say this year is that this is a free-market issue. But we’re not talking about bread and toothpaste. We’re talking about high-proof alcohol. Wine has three times the amount of alcohol than beer. That’s why it’s sold in liquor stores where it should be. Some products must be tightly controlled and regulated.”

Hammond rejected the argument that liquor stores hold a monopoly. “Wine and spirits retailers are highly competitive. Any notion that there’s a monopoly in Tennessee’s wine and spirits industry is patently false.”

Senate Democratic Leader Jim Kyle of Memphis said that while the bill may be popular, he’s against it because he believes big-box retailers and grocery chains will drive small liquor stores out of business.

“In smaller towns, their owners are part of the fabric of the community. Just as 20 years ago we used to have independent service stations operating all over and we allowed them to be run out and they are no longer part of the fabric of the community, that’s what will happen here,” Kyle said.

House Democratic Leader Craig Fitzhugh of Ripley said he’s also concerned about underage drinking when wine is sold in grocery and convenience stores. “I think my caucus has been pretty much against it,” he said.