It’s inconceivable to them that consumers who are not buying wine in a liquor store today would buy a bottle at a food store tomorrow if it were more available.
Yes, liquor stores capture 100% of Tennessee’s wine sales today. But they don’t capture 100% of potential wine purchases by Tennesseans. Here are two reasons:
Half of all wine sold in the U.S. is sold with the weekly grocery shopping. This option is not available to Tennessee consumers.
Residents who live near the Virginia, North Carolina, Georgia, and Alabama often shop in those states. One of the reasons is they can buy wine in a single trip.
And, here’s a big one. Food stores will have a vested stake in increasing demand for wine. They will have tastings*, recommend food pairings*, advertise wine in their circulars, etc. The amount of marketing power that food stores put behind wine in a single week will likely far exceed the combined efforts of all liquor stores in a year.
And what happens when the food store’s selection is no longer good enough? They shop more often at their favorite liquor store.
Food stores will create demand for wine that liquor stores can’t right now. That’s why Tennessee’s wine market will grow 25% to 55% if our legislation passes.
You know that Tennessee won’t be the first state to sell wine in food stores. There are 33 other states that support consumer choice and allow their residents of legal drinking age to purchase wine in retail food stores.
We want your help getting photos of wine in food stores in all of those states. And, you’re photo could win you a $150 gift certificate to the food store of your choice.
The contest ends on Christmas. So, if you’re traveling for the holidays, please take a minute to take a photo and send it to us. You don’t even have to take the photo yourself. A relative, a friend, heck, a complete stranger can send it to you and can submit it.
Say “price premium” to CEOs and watch their eyes light up. It’s the holy grail of business to charge a higher price and still have clients beat down your door.
Price premiums rarely come without some investment. Those who reach this point have usually perfected a system, hired better talent, employed new technology, improved customer service, etc. Consumers choose to pay more because the products and services are worth it.
Now contrast that wine sales in heavily regulated states. Minnesota only allows wine sales in liquor stores. Minnesotans pay a price premium for wine. It’s not because of the variety or the service or new technology in the store. They pay 17.5% more for wine than they should because they have to. An American Economics Group study uncovered the roots of this undesirable price premium.
Three elements of distribution and taxation create Minnesota’s significantly higher beverage prices. They are:
The near-monopoly status (and monopoly profits) granted to a handful of wholesalers
The restriction in the number and types of retail outlets
The relatively high excise and sales taxes on alcoholic beverages
In combination, these three elements impose what has been called a monopoly “tax” on consumers in the form of higher prices for liquor, wine and beer.
Liquor and wine retailers argue that more competition will destroy their businesses. That’s interesting, because the Green Hills neighborhood in Nashville seems to refute everything they fear about competing stores and/or lack of market.
There are three liquor stores in the retail area of Green Hills:
Bud’s Discount Wine and Liquors
The Wine Shoppe at Green Hills
yn in the Hill Center (which opened less than a year ago)
Bud’s and The Wine Shoppe are almost in the same block on Abbott Martin. The newly opened yn is no more than .3 miles from the other two stores. That’s less than one mile to complete a round trip to three liquor stores.
Let’s review. It’s OK for liquor stores to open multiple locations within walking distance of another. But if retail food stores are allowed to sell wine, then liquor and wine retailers face an uncertain and bleak future because the competition would be too great or because the market is too small.
Scientists talk about the exception that disproves the rule. Green Hills is that exception to the retailers’ arguments.
Stopteendrinkingtn.org is one of our opponents in this debate. The org’s website presents visitors with the following information as part of an online petition.
• Wine in Grocery Stores – This bill would put wine on the shelves of 6,000 grocery stores and big box stores across the state – and right in the line of sight of any teenager entering their doors. Currently, only 525 retail alcohol establishments are licensed to sell wine in Tennessee.
Because Red White and Food just revealed its legislative strategy on Wednesday, we’ll cut stopteendrinkingtn.org a break and give them the opportunity to correct their facts.
The legislation recommended by the Tennessee Grocers and Convenience Store Association would limit sales to municipalities where citizens have voted for retail package sales. Not every grocery and convenience store in Tennessee would be allowed to sell wine. Here is the map:
Stopteendrinkingtn.org conveniently fails to mention the Responsible Vendor Law and mandatory carding that the grocer and convenience store industry advocated. Retail food stores would extend mandatory carding to anyone purchasing wine if this legislation passes.
What people consider facts at one time can change as more information becomes available. It’s time for stopteendrinkingtn.org to now get its facts correct.
BTW, the Specialty Wine Retailers Association is not too happy with stopteendrinkingtn.org.