Roy Exum: The Whine Over Wine

Wednesday, January 22, 2014 - by Roy Exum
Roy Exum
Roy Exum

It is beginning to look like the whine over Tennessee wine is finally over and that soon the state legislature will allow grocery stores across the state to sell wine in much the same way shoppers buy beer with their milk and soft drinks. But with the proposed bill comes a crummy caveat that to me is almost as bad as banning wine itself because it will hurt too many people.

It is no secret that the overwhelming majority of adults in Tennessee want wine in grocery stores. You can buy wine in a grocery store in 36 other states and in six of the eight states closest to Tennessee’s border. Not only is it a matter of convenience but when Tennessee grocers start selling wine, the tax revenues remain in the state. But if the proposed bill is passed like it is being written, the lobbyists want the legislators to prohibit the big-box stores from selling wine, which hampers a Walmart or Sam’s Club or, more specifically, a Costco.

Every day scores of Tennesseans drive down I-75 to Fort Oglethorpe and buy wine from Costco, along with buggy loads of everything else you can think of from groceries to dry goods. Costco is the No. 1 seller of wine in the world with sales over 1 billion dollars. The store is also the No. 1 seller of toilet paper (over 1 billion rolls a year of those, too.)

For the record, Costco has 64 million people who pay for a membership and who appreciate the fact Costco doesn’t mark up any item more than 15 percent. They don’t even advertise but, don’t worry, they had $93 billion in sales at more than 600 stores. If our state lawmakers make Costco, Sam’s, and Walmart play by different rules than our other grocery stores, they’ll be tempted to build stores in states other than Tennessee. That hurts the Tennessee consumer. It denies us a choice and it denies us a possible savings in our spendable dollar. That’s not right.

The logic a rural lawmaker uses is obvious; too many have seen the big-box stores open in a small town and quickly demolish the mom-and-pop shops with their corporate ability to buy merchandise and products cheaper than their competition. For years the cry has been grocery-store wine would kill small whiskey stores but in other states this simply hasn’t happened.

The new proposal will allow whiskey stores to start selling beer, soft drinks and tobacco products in a win-win situation for the owners and customers alike but to close out the big-box stores and the smaller convenience/gasoline quick-stops is not the right thing to do. Not only does it smack free enterprise in the face but – once again – people who buy wine by the case will cross the state’s border to ramp in the savings. When that happens, those tax dollars will be lost.

The legislature has wasted untold hours debating the wine question when it should have happened long ago. When President Obama came out and said he doesn’t think marijuana is any more harmful than alcohol it was a clear indication that the new playing field will be over legalized marijuana and, in Tennessee, there is a movement towards medicinal cannabis.

In the year ahead the state of Washington will legalize marijuana and several other states, such as California and Vermont, will put the question on November ballots. Right now 22 states, as well as the District of Columbia, have made medicinal marijuana legal and there is a bill in the Tennessee legislature that will draw a lot of attention this session. And just so you’ll know, in Florida there are already over a million signatures urging medicinal marijuana.

Marijuana is big business in Colorado where it is estimated that there will be $600 million in sales this year. Translated, that is $67 million in new taxes with the schools getting the first $20 million. A Gallup poll showed that 58 percent of Americans favor its use and, according to ArcView Market Research, the current market of $1.4 billion will increase to $2.4 billion by the end of 2014 and $10.2 billion within five years.

And you are worried that wine in supermarkets may affect a mom-and-pop whiskey store? Wake up and smell the smoke, baby! And quit worrying -- even the president says it's okay.

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