While Chattanooga grocery stores will be able to sell wine starting July 1, prices may not be better than at your local liquor store, and they might even be worse.
Because of the way the law was written, each grocery store must operate independently when buying wine, so chains such as Food City, Publix and Wal-Mart can't use their bulk purchasing power to bargain for lower prices.
In fact, some local wine sellers believe they will still have an edge on buying in bulk.
"We probably have an advantage because the individual grocery store will buy one case at a time," said Josh Carter, owner of Imbibe on South Broad Street, one of the city's largest wine, beer and spirits stores. "We buy a lot of times at 10 cases at a time."
Liquor stores have opposed allowing grocery stores to sell wine for many years, but a compromise was reached in the General Assembly that included the provision that each store must order its own inventory.
"The liquor stores were very afraid of having to go up against giant corporations and wanted to split up their efforts as much as they possibly could," said Rob Ikard, the president and CEO of the Tennessee Grocers and Convenience Store Association.
In addition, state lawmakers passed a provision requiring anyone selling wine to set the retail price at least 20 percent above the wholesale price.
Officials at Food City, the Abingdon, Va.-based chain that owns 10 stores in Chattanooga, did not dispute Carter's view that he may be able to compete on price.
"He speaks the truth," said Steven C. Smith, president and chief executive officer for K-VA-T Food Stores, which owns the Food City chain. "It's not exactly the free enterprise system I grew up with. Sausage gets made and it's not pretty."
Smith noted wine and tobacco are the only products in his store where he is required to set a minimum price.
"We can't use our volume to lower the price to make the [liquor stores] uncompetitive," he said. "We can't get a better deal for the consumer. We do it for cheese and milk and bread."
Stores will be able to offer a discount price on the sale of cases of wine, however, Smith said.
For consumers, the choice between a grocery store and wine or liquor stores may mean comparing convenience and variety.
"We're not worried about the impact of grocery sales on our personal sales because of the variety of wines we offer," said Imbibe's Carter, who also owns the St. Johns and Meeting Place restaurants. "We'll continue to offer small producers and little value wines and gems. We have a staff of 12 people who are all very knowledgeable."
But Food City's Smith believes consumers will appreciate the convenience of not having to make a separate stop to purchase wine.
"Folks who want to have a nice meal and would like to have a bottle of wine with it, now they can buy that at the supermarket and don't have to go out of their way," he said.
While each store will order its own wine, they will do so from a list of distributors provided by Food City headquarters, Smith said. The selection will vary somewhat from store to store, depending on the location and amount of space available. In certain areas such as St. Elmo, for example, which is the closest Food City store to upscale Lookout Mountain, the selection may be more diverse than in stores in more rural areas where the demand for wine is not as high.
Only grocery stores in incorporated areas of Hamilton County, such as Chattanooga, East Ridge and Red Bank, will be allowed to sell wine. The county commission has not approved wine sales for stores in unincorporated parts of the county, which means the Food City stores on Ooltewah-Ringgold Road and in Harrison Bay are not eligible, Smith said.
So if a store adds wine, what does it replace? That is not a concern in most stores, Smith said, but if it is, consumers will continue to see the same number of items overall, but some of them may have less shelf space.
"If we have 48 feet for our Hallmark greeting cards display, that may get cut to 40 feet," he said, and there may be less room for other non-food items.
Consumers won't know for certain how prices and selection compare until July 1, when most Chattanooga groceries hope to have their wine aisles stocked and open.
For now, some of the stores are racing the clock to get everything in order. Getting approved to sell wine is a complicated process, with multiple steps, and stores in Chattanooga are among the last in the state to win approval from the Tennessee Alcoholic Beverages Commission.
Smith blames that on a less-than-speedy performance by city officials.
"We have 10 stores we don't have approved yet and they are all in Chattanooga," he said.
Food City is not the only grocery chain awaiting approval.
The Tennessee Alcoholic Beverage Commission has approved 251 stores, according to a list published on its website, including stores in East Ridge, Cleveland and Red Bank, but not a single store on the list is in Chattanooga.
Stores must first obtain a certificate of compliance from their local mayor's office that certifies the store owner has not been arrested in the past 10 years and that the store meets local zoning requirements.
The city attorney's office prepares those certificates and sends them to the city council for a vote. Then the forms go to the local office of the Alcoholic Beverage Commission, and an agent goes out to each store to confirm that it meets the minimum size required by law. The application then goes to the state ABC office for approval on a probationary basis. That will allow stores to begin stocking their shelves in advance of July 1, by which date they will need the final approval for a license.
The Chattanooga City Council voted last week to approve several applications, including those from Wal-Mart's Neighborhood Market stores and Sam's Club, according to assistant city attorney Keith Reisman. Seventeen more are on the council agenda for Tuesday, including 10 Food City stores, and others including four Publix stores, Earth Fare, Whole Foods and Fresh Market.
The local Alcoholic Beverage Commission has inspected about 20 store applications and has another 30 on tap that should be completed within a few days, according to a staffer.
Assuming those applications are quickly approved by the state ABC, staffers will still need to be trained on the rules for selling alcoholic beverages, including how to check IDs and determine if a customer is too intoxicated to purchase wine.
Food City's Smith believes most stores will be ready in time.
"I think we're finally to the point where we see the light at the end of the tunnel," he said. "I think we can have it on the shelf and have it ready to sell by July 1."
Contact staff writer Steve Johnson at 423-757-6673, sjohnson@timesfreepress.com, on Twitter @stevejohnsonTFP, and on Facebook, www.facebook.com/noogahealth.