Tennessee liquor stores foresee business uptick; change in law permits grocery sales

Tennessee liquor stores foresee business uptick; change in law permits grocery sales

July 2nd, 2014 by Shelly Bradbury in Business Around the Region

Bob Monroe, general sales manager for Carter Distributing Co., unpacks and shelves beer at Riley's Wine & Spirits on Tuesday, the first day that liquor stores can sell other goods besides liquor, wine and high gravity beer.

Photo by Shawn Paik /Times Free Press.


July 1, 2014 - Liquor and wine stores can sell groceries, accessories and low-gravity beer

July 1, 2016 - Grocery stores can sell wine

Jan. 1, 2017 - Grocery stores can sell high-gravity beer

Source: Times Free Press archives

Like a slowly breaking dam, the floodgates of Tennessee alcohol sales opened Tuesday with just a trickle.

After years of statewide regulations that required liquor stores to sell only liquor, wine or high-gravity beer, a new state law took effect Tuesday that allows liquor stores to sell groceries and other items too -- like low-gravity beers, corkscrews, gift bags, soft drinks, potato chips or ice.

"It's pretty phenomenal," said Bob Monroe, general sales manager for Carter Distributing. "They in effect are going to be the same as a Pantry or a Mapco, only with wine and liquor."

It's the first stage of new state legislation that will eventually let grocery stores sell wine. The law, passed in March, includes a compromise aimed at helping liquor and wine merchants stay competitive once wine hits the shelves of grocery stores. So on Tuesday -- two years before grocers can even start selling wine -- the bill granted wine and spirits merchants the right to expand their inventory.

Many liquor store owners are thrilled. Vickie Hurley is adding all sorts of new beer to her shop, Riley's Wine and Spirits in Hixson.

"We're planning on it increasing business," she said. "I think when people are here to buy wine or liquor, they'll see the beer and they'll buy some of that too, like a one stop shop."

Eventually she'll add tonic water, glassware and gift bags to the store as well.

But whether the new selection will be enough to keep consumers coming to liquor stores even after wine hits grocery stores remains to be seen. The soonest grocers can start selling wine is July 1, 2016, and that's only if such sales are approved by a referendum in each of the authorized 156 communities.

Those votes aren't automatic; supporters of expanded wine sales must get the signatures of at least 10 percent of the voters in each community to get the measure on the ballot. The issue could be on the ballot in Chattanooga as soon as November.

In the meantime, liquor merchants are figuring how to use their new freedom. Charlie Modi, a manager at Hamilton Liquors, said he's considering adding soft drinks, juices and cigars. But while he's happy about the initial boost to business, he's still worried about losing wine sales in the future.

"It'll impact us initially," he said. "But in two years we'll lose a lot of business when the wine goes into grocery stores. It's all about convenience."

Some wine and spirits stores aren't making any changes.

"For over 100 years we've been controlled on what we could sell - we couldn't sell anything but this -- so we're set up to run this way," said Robert Cox, a manager at East Brainerd Wine & Spirits. "There is a beer and tobacco mart right next door to us, and he sells beer, cigarettes, chips and drinks. I'd be in direct competition with him and Bi-Lo if I started selling that stuff."

And while the laws have been long-set, now that the changes have started, they won't stop anytime soon. In addition to wine in 2016, Tennessee grocers will be allowed to sell high-gravity beers in 2017, which up to now have been relegated to liquor stores. That move will open the shelves to craft and local brewers alike.

"It's going to expand their beer selection," Monroe said. "When all the smoke clears the first day in January of 2017 you'll be able to buy low- and high-gravity beer on both sides of the fence."

Just like groceries and wine.

Contact staff writer Shelly Bradbury at 423-757-6525 or sbradbury@timesfreepress.com with tips or story ideas.

Staff writer Kevin Hardy contributed to this report. The Tennessean contributed to this report.