Grocery store wine sales ‘shelved’ for now

By MEGAN PHILLIPS,

Last year, many local wine and spirits store owners were concerned about big box grocery stores having license to sell wine and liquor on their shelves.

However, Silver Leaf Wine and Spirits owner Victor Pittman said politicians have “shelved” the issue for the time being.

Currently stores like these already have wine on their shelves, but with restrictions. In stores like SAM’s, Whole Foods, McDade’s, and even in a Winn Dixie on the coast, wine and spirits are sold to shoppers.

However, each store must have a separate entrance to that portion of the market.

Pittman said wine and liquor sales are at the bottom of the alcohol sales industry, with beer taking up a much larger portion.

“People just don’t consume a lot of wine and spirits in this state. Our population is so small…  If you want to increase sales in Mississippi, have to increase the population.”

According to Pittman, the state’s population increases by approximately 100,000 to 125,000 every ten years.

“If you look at census every ten years, there are about 100,000 to 125,000 people that come to the state every ten years and we attract into economy.”

Grocery stores obtaining a single license to sell beer is not an issue for local wine and spirit store owners, Pittman said. The real issue comes with stores also wanting to sell wine and liquor.

“(Stores) have a license, so they’re not excluded. When they want a multiple license, that’s the real crux.”

Pittman said that if large-chain grocers were to obtain a multiple-license for selling alcohol, more money would be taken out of the state.

“When you look at $100 million scenario, $78 million stays in the state (with local wine and liquor stores). Money has a recirculation rate of 1.5 to 1.6 times.”

If big-box grocery stores were to sell those items, however, only $28 million to $38 million would stay in the state out of the postulated $100 million. That amount includes wages.

“The market is a small one and serves a small amount of stores. If you open it up to other box stores, it’s only going to divide the pie and put hometown businesses out.”

 

IN 2016, big box stores began backing a lobby called Looking for Wine?.

“It’s not like [selling wine in grocery stores] is brand new,” Nathan McHardy, Briarwood Mart Wines and Spirits owner, said in a previous Sun article. “The store has to have a separate entrance to that side of the building.”

What would be different, however, is selling wine on shelves next to everyday produce. This could put local wine and spirits shop owners out of business across the state.

This would not only have an effect on the local economy, but wine aficionados could suffer as well.

“The consumer stands to lose the availability of nice products,” said McHardy. 

According to Tasho Katsaboulas of Kats Wine and Spirits, the portion of wine that chains would put on their shelves comprises 91 percent of wine sales, because that percent of sales comes from bottles costing $15 or less.

That portion and type of wine that would move to big box stores is the wine that generates revenue to carry hard-to-find products in local wine stores, said McHardy. Taking away nice selections will push wine consumers to leave the state to find better selections elsewhere.

“If they take that revenue away from local stores, they’re not going to be able to buy the nice products. The consumer will be forced to go out of state to seek out those products, taking tax revenue with them because they want nicer wine. The erosion of the local economy is kind of the biggest issue,” McHardy said.

“If the state’s Alcohol Business Model changes overnight, the majority of local wine and spirits shop owners will be out of business within a couple of years,” Pittman said.

CONSUMERS might be under the impression that buying wine from grocery stores would be less expensive than buying alcohol from locally-owned shops.

However, chains will have to buy wine at the same price as local shop owners, according to Katsaboulas.

“Because the state distributes wine, the state requires that Kroger and WalMart pay equal prices as local businesses,” he said. “The state is simply moving the revenue,” he said.

Mississippi’s system is an open system, meaning a store owner can order anything available, and the state marks the price and sends it to the store.

“The only limitation with this is that hard-to-find wine makers send their wine to stores they’re familiar with,” said Katsaboulas, making each store unique in selection even from state to state.  “No two state’s wine selections are the same, because each hard-to-obtain winery has different relationships with different states.”

According to Katsaboulas, grocers would leave this system of purchasing hard-to-obtain wine unutilized and sell bulk, co-op, and tank wines.

“In short, because there’s not a price advantage, consumers who want nice wines will be punished for consumers who want massed-produced wines” said Katsaboulas.

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