Wine sales in supermarkets: Renewed push has package stores primed for battle

Connecticut is one of eight states in the country that prohibits grocery stores and supermarkets from selling wine. But that could soon change, much to the chagrin of Northwest Corner package store  owners.  A decades-long battle over the sale of wine in grocery stores has resurfaced with renewed vigor and aggressive lobbying on both sides of the aisle.

A bill pending before the state legislature’s General Law Committee is seeking to expand existing grocery store permits to include sales of wine manufactured by small wineries. It also provides that no food store within 1,000 feet of an existing package store would be allowed to sell wine, and that all wine in supermarkets must be from vineyards producing 100,000 gallons a year or less, or about 43,000 cases.

Advocates said current laws limiting wine sales to independent package stores are arcane and shield them from the reality of modern commerce at the expense of consumer convenience; that 42 out of 50 states allow grocery stores to sell wine and that Connecticut state taxes, in the case of cooperative marketing, would net $1.7 million a year in 2023-2044, increasing to $3.6 million per year in 2045-2080.

The state’s 1,250 package stores, including many in the Northwest Corner, argue that the competition with major supermarkets will severely cut profits and threaten their livelihood.

Contentious public hearing

A public hearing on H.B. 5918 held on Feb. 2 drew hundreds of people to the state Capitol who gave more than six hours of testimony for and against the proposal, and hundreds more filled the Capitol’s atrium during the hearing.

Jean Cronin, chief lobbyist and executive director of the Connecticut Package Store Association (CPSA), gave testimony on behalf of package stores in the state, something she has done many times since the mid-1980’s, when the push for wine sales in food stores was first proposed.

“I commented how it’s not lost on me that this is Groundhog Day, because we’ve done this so many times before,” she said in a recent interview.

“The food stores are pushing it hard this year. They’re putting in a huge effort, and revving up consumers with massive marketing and media campaigns. But we also have a media campaign, so we are pushing back. The battle is on.”

State Rep. Maria Horn (D-64) said the latest debate, “seems just as heated as in past years, which, for me, pits local small business package stores, with at least one in every town I represent, against the Connecticut wineries.”

“The grocery chains, who are also fighting hard for this change, tend to be large, out of state and even international companies, so their interests are distinct,” Horn explained.

“We do have a number of Connecticut farm wineries in the district, however, and if there were a way to favor them explicitly, I would be pushing for that,” she said, “but the interstate commerce clause pretty much shuts down our ability to favor in-state businesses, so we cannot do that.”

Horn further noted that the General Law Committee has tried to express that concern by favoring smaller wineries, but, she said, “It’s an imperfect device as many large national wineries also own small brands that they can use to get around these restrictions.”

CPSA’s Cronin said Connecticut wineries are hoping that exposure in grocery stores will boost their profits. “They are putting a big push on products that don’t sell as well as they had hoped.” She said the

CPSA would be “ready and willing” to work with the wineries to help them better market their products.

Poll: consumers want convenience

Written testimony presented by Wayne Pesce, president of the Connecticut Food Association (CFA), which represents the state’s supermarkets including small, independently-owned stores to larger regional grocery chains, noted that a voter poll recently released from the University of Connecticut shows that 84% of the state’s consumers “overwhelmingly” support the option to buy wine where they purchase groceries.

“Customers continue to make their priorities and needs clear to the industry: consumers want choice and convenience when shopping. These dramatic shifts in customer shopping patterns and consumer demand are driving the need for grocers to adapt and offer the assortment and variety that today’s customer requires,” according to Pesce.

“You may hear the argument that every bottle of wine sold in a grocery store is a bottle not sold in a package store. This claim is patently false,” the CFA president wrote.

“If the law is amended, a fair portion of supermarket wine sales will be incremental, as wine in grocery stores in other states has shown.

“An amended law should allow package stores to sell a variety of highly consumable food products in order to recoup the potential wine sales lost to them,” Pesce said.

CPSA’s Cronin said change is unnecessary. It’s a “very convenient process” to get wine from one of state’s package stores, which are located in 162 of 169 towns and are open seven days a week for a total of 92 hours a week, she noted.

The CPSA lobbyist said small package stores are often the last of the stable, small businesses in their respective towns.

“They are supporters of local events, and part of the fabric of their communities. In many small towns they are the last small business left on Main Street. But this legislation will change all of that.”

Should the proposal pass, said Cronin, it would allow the over 850 grocery beer permit outlets to expand to sell wine, representing a 68% increase in the venues that can sell the most profitable product in a package store: wine.

“This is a game changer that will completely upend business plans and result in serious financial difficulties for many package stores,” said Cronin.

Déjà vu for Northwest Corner businesses

“Every year it comes up,” said Richard Bramley, who has owned and operated the Cornwall Package Store for the past 45 years.

Referring to the most recent battle over wine sales, he predicts that half of the state’s package stores “would be out of business in five years” if the new law passes.

“Wine is readily available in almost every town in the state in numerous locations, and there is no need to expand it. The grocery stores are not going to offer anything that is not already offered. I think Connecticut satisfies its consumers,” he said.

“Package stores are one of the last privately owned entities still on Main Street in every community and that is one of the crucial factors,” particularly in rural Northwest Connecticut, noted Bramley. If the only package store in a small town closes, he said, customers would be inconvenienced by having to drive 10 or 15 minutes to the next town over.

“The state does have the legislative power to prevent the demise of one of the last small businesses on Main Street,” said the Cornwall business owner. “How much do I have to lose before it’s not a viable business, 10 percent, 15 percent? But it’s not about losing my business, although certainly that’s concerning. The community loses, that’s who loses.”

Dan Chaves, who manages Stateline Wine and Spirits in North Canaan, which is located only a few steps away from Stop & Shop, said while his store is protected under the 1,000-foot distance clause in the proposed legislation, he still has concerns, because it could always be amended at a future time.

“If it ends up passing it could affect one-third of our business, and I have a lot of friends who own package stores and I’m worried for them. Wine is money.”

According to the CPSA, wine accounts for 30 to 60 percent of the overall sales of a package store.

On a recent Friday evening, Stateline customer Laura Babcock of Salisbury carefully placed two bottles of Pinot Grigio into her shopping cart. Babcock said she treasures the camaraderie of staff as well as their wine knowledge.

She said if wine sales are allowed in grocery stores, while she might occasionally pick up a bottle as she shops for food items, her loyalty lies with the small package stores.

“I am concerned for the small business owners and prefer to give them the business if the prices are the same.”

‘Consumerism is a nasty thing’

For Gregory Brick, Jr., owner of Goshen Wine and Spirits, wine is his livelihood.

In his written testimony, he explained that he worked two or three jobs for the better part of a decade just to have enough for a down payment on his package store, which he bought six years ago after his 26th birthday.

“When I bought my store I bought into a system that had a set of laws, not rules, laws. You can’t just change those laws due to pressure from outside groups,” he said in written testimony in opposition to H.B. 5918.

“Consumerism is a nasty thing that we are all guilty of, it’s wiped so many small businesses off the map and out of our lives.”

Brick said he didn’t get into the package store business to get rich.

“I’m far from it. I got into this work to be a small business owner in a small town, to span a generation, to ask how’s your day going? How are the kids? To talk football, to talk wine, whether you’re buying a bottle or cru champagne.”

He said he doesn’t blame wineries “for thinking their wine would sell better at a grocer than the liquor store next door. I don’t blame grocers for seeking new revenue streams. I don’t blame the consumer who could care less where they get something as long as they can. The problem is, all of that comes at the cost of someone else, someone else’s livelihood, someone else’s business, someone else’s family, someone else’s community.

The ruse of “customer convenience” and the statement “they do it in other states,” Brick said in his testimony, “is not a reason to change it in ours.”

The small business owner said he could never compete with the volume of a grocer.

“I exist based on the good will of my customers, my slightly isolated location and a state system that allows the sales of a few controlled substances in limited, regulated and approved locations. I shouldn’t have to lose sleep thinking the legislation, grocer’s association and local wineries who we’ve partnered with for decades is going to take that away.”

In the Northwest Corner, it is not unusual for grocery stores and package stores to co-exist in strip malls.

Such is the case in Sharon, where Sharon Farm Market owner Kim Choe said she would not be able to sell wine at her grocery store because it is located within 1,000 feet of a package store.

The owner of Davis IGA in Kent declined to comment, and the owner of LaBonne’s Market in Salisbury could not be reached for comment.

The 23-member General Law Committee has until 5 p.m. on Tuesday, March 21, to either move the proposal forward or vote it out of committee.