This story was updated Feb. 21, 2018, at 11:59 p.m.
NASHVILLE — A bill to legalize Sunday wine and liquor bottle sales in Tennessee easily cleared its first legislative hurdle Wednesday after a compromise was reached among grocery stores, retail package store owners and others.
The bill's sponsor, Rep. Gerald McCormick, R-Chattanooga, told House State Subcommittee members the legislation is a follow-up to the landmark 2014 law, which took effect in 2016, that legalized wine sales in grocery stores.
McCormick said he brought the bill after hearing from Chattanoogans, who complained that while they could purchase beer on Sundays in a grocery store, they couldn't get a bottle of wine.
"You've got people who literally go in and have a wine [bottle] in their grocery cart and they have to go back because it's illegal to buy on Sunday," said McCormick, who refers to the bill effect as "seven-day sales."
One of the bill's effects is to align the hours for Sunday sales of wine and spirits with those of beer. Wine and liquor now cannot legally be sold from 11 p.m. on Saturday to 8 a.m. on Monday. Nor can the products be sold on major holidays.
As part of the compromise, package store owners would get a six-month head start with an ability to sell both wine and liquor on Sundays beginning July 1. Grocery stores, which still wouldn't be selling spirits, could begin selling wine on Sundays starting Jan. 1, 2019.
"Some retail package stores want time to get ready," McCormick said, noting it would enable not only those owners but their customers time to adjust to Sunday sales.
Asked by Rep. Bud Hulsey, R-Kingsport, to relate how both sides came to an agreement, McCormick said, "I don't think it's just two sides of a fence, I think it's a number of fences with different sides on it."
That included grocery stores, retail package stores, wine-and-spirit distributors and others.
Retail package stores were initially split over the Sunday sales issues, with some saying they didn't want to open Sundays while others did.
The compromise, adopted as an amendment that rewrote the original bill, seeks to smooth over those and other issues.
One bumps up package stores' profits on sales of whiskey, vodka and other liquor by requiring package stores to charge consumers at least 20 percent over their wholesale price.
Other facets of the agreement include a provision giving package store owners more freedom when they liquidate inventory when they close. Currently, they must sell to the distributors at whatever price the wholesalers wish to pay. Under the proposed revision, stores can have going-out-of-business sales.
Another item under discussion but not yet in the legislation is allowing package store owners to sell their licenses to someone else. That, McCormick said, will need to be looked at and probably require a state attorney general's legal opinion to sort out.
"We want to make sure we get a constitutional bill that makes all sides equally unhappy," McCormick quipped.
The amendment was offered by Rep. Bill Sanderson, R-Kenton, the subcommittee chairman who said he met with all sides in his office Tuesday. McCormick was not there, tending to business as the chairman of the House Finance Subcommittee.
David McMahan, who lobbies for the Tennessee Wine and Spirits Retailers Association, later said retailers wanted the six-month advantage on selling in order "to get a little head start because the public doesn't know that liquor stores are open on Sundays once this bill passes."
He noted there is already a 20 percent markup on wine wholesale prices, a product of the original 2014 wine-in-grocery-store law, and it is extended to spirits.
McMahan said he believes that some lawmakers like it because they "feel that cheaper, more available alcohol is not good public policy. And two, it keeps anyone from using alcohol as a loss leader" in their stores.
He predicted grocery stores' next move will be to come back at some point in the future in an effort to sell liquor, which if successful will put a further squeeze on package-store owners, many of them small businesses. And that is part of the reasoning behind the ability to sell their licenses.