Tennessee House OKs wine in supermarkets; Senate must agree to small changes in bill

Tennessee House OKs wine in supermarkets; Senate must agree to small changes in bill

February 21st, 2014 by The Commercial Appeal in Local Regional News

Rep. Richard Floyd, R-Chattanooga, reads documents during a House floor session In Nashville on Thursday. The chamber later passed a bill to allow local governments to hold referendums on allowing supermarkets and convenience stores to sell wine. Floyd was among the members voting against the bill.

Photo by Associated Press/Times Free Press.

NASHVILLE - Tennessee Senate leaders said their chamber will likely go along with the relatively minor changes the House of Representatives made Thursday in the bill allowing food stores to sell wine, signaling its virtually certain passage.

The bill won House approval by a surprisingly large margin, 71-15, given that it never made it out of House committee in the past seven consecutive years of efforts. But even if it becomes law as expected, Tennesseans must wait at least another two years before buying wine in food stores.

The bill allows towns, cities and counties with liquor stores or liquor by the drink to start holding public referendums this November in which voters can decide whether to permit local food stores to sell wine.

But wine sales can't begin in food stores in the state before July 1, 2016, and food stores within 500 feet of a liquor store can't sell wine until July 1, 2017, unless the liquor store owner gives written permission.

"Members have heard from their constituents, and the constituents overwhelmingly wanted the opportunity to buy wine in grocery stores," House Speaker Beth Harwell, R-Nashville, and a key proponent of the bill, said after the vote. "But members really wanted to protect local businesses as well."

Sen. Bill Ketron, R-Murfreesboro, the Senate sponsor, said after the House vote he believes the Senate will go along with the House changes. The Senate version requires food stores to pay an annual state licensing fee of $850 to sell wine, the same fee that liquor stores pay; the House set the annual fee at $1,250. The House also allowed new liquor wholesalers to open in any county with liquor stores or liquor by the drink.

"I think we're content with all the amendments and I think the Senate will approve," Ketron said. The Senate initially approved the bill 23-8 on Jan. 30. Ketron said it may vote on the House amendments March 3.

The House tabled attempts to remove a mandatory 20 percent markup from the wholesale to retail price of wine, to allow "high-gravity" beer sales in grocery stores, and to move up wine in food stores to 2015.

Rep. Jon Lundberg, R-Bristol, the House sponsor, opened the 75-minute debate with a short history of legal liquor sales in Tennessee since Prohibition ended. "In 1939, this body approved referendums for package stores. In 1967, this body allowed referendums on liquor by the drink. Hopefully this body this year will allow referendums on wine sales in food stores. If we pass this bill, not one bottle of wine can be sold on a grocery store shelf without local voters approving it."

House Democratic Minority Leader Craig Fitzhugh of Ripley, who voted for it, said lawmakers have "spent years on this issue ... but we haven't done a thing to extend health care to 330,000 Tennesseans," a reference to his efforts to expand Medicaid in the state.

Rep. G.A. Hardaway, D-Memphis, said his vote for the bill "is in support of the right of my community to determine its own socioeconomic destiny," but he said he's not sure yet whether he would vote for food store wine sales in a Memphis referendum.

Rep. Andy Holt, R-Dresden, who voted against the bill, may have swayed some colleagues to voting in favor with a long, rambling, scattershot argument against the bill, including its referendums.

"We participate in the form of government called a democratic republic so we can make decisions on behalf of people we represent, but we're not doing that in this case." Holt called the bill "crony capitalism" for giving some parts of the liquor industry advantages over other parts.

"I don't want to see wine on grocery shelves in my hometown but I do believe the people in my district have enough sense to decide for themselves whether they want it there or not," said Rep. David Alexander, R-Winchester.

Rep. Ryan Haynes, R-Knoxville, said, "Some of the members would take us back to Prohibition if they could." He said the arguments against the mandatory minimum 20 percent markup is to prevent stores using wine as a "loss leader" to sell other products.

Melissa Eads, a spokeswoman for the Nashville division of the Kroger supermarket chain called it a "huge day," even though supporters of wide wine sales aren't necessarily happy with every aspect of the bill.

"We knew it was going to be about compromise, and we're fine with where we are," Eads said.

The Associated Press contributed to this story.