Professor Bainbridge...on law, politics, religion, culture & food

Prof,

As a lifelong Tennessean, I wrote a long rant about this a few years ago.  Basically you learn to stock up, make connections, and find ways to bring bottles back home with you after trips.  If you find yourself in Memphis drop me a line. 

I’m getting to travel a lot these days, and am in Ohio at the moment.  Weird thing here: wine is easy to get in stores or by having it shipped to you, but it’s a tough state for liquor.  The grocery stores and wine shops carry these odd off-brands that are diluted, e.g. cheap vodka that’s only 20% alcohol.  To get real liquor you have to go through a state operated shop a la Pennsylvania. 

Cheers,
Benito

First, good choice of restaurants; your hosts did well.

I was at the hearing on this bill yesterday.  The same Senate Committee also heard testimony on allowing wine in grocery stores.  Committee ended up punting both bills to the last meeting of the session--and from the “questions” asked by various committee members, neither is likely to pass out of committee--even though the committee chair is strongly in favor of at least the grocery store sales.

“Wouldn’t allowing internet wine sales allow college fraternities to buy alcohol?”

“Why can’t you just get your liquor store owner to order it for you?”

“I can’t believe that any wine would be unavailable under the current law if you just asked the retailer to order it--why don’t you give me a sample list of such wines?” (Said with a smirk and a long glance at the liquor store owners seated in the audience.)

Pure and simple rent seeking on the part of the retailers and wholesalers--and plenty of evidence of regulatory capture, albeit of the senate, as opposed to the alcohol administrators.  (The industry lobbyist has been known for well over a decade as the “golden goose.")

In short, the paucity of the arguments against change and the buffoonery of many of the committee members were not uplifting.

Luckily, I can have cases shipped to my out of state relatives, but many people don’t have that option.  Moreover, it would be difficult to develop a taste for nice wines under the present system (I’m a transplant and became addicted in more wine-friendly locations!).

Not going to be fun stocking my cellar when I finish construction later this year.

If you absolutely have to buy wine on the East Coast, far and away the best state to buy it in is Massachusetts, which has really low alcohol taxes (and really low gas taxes too). New York is probably second, mainly because the selection is better than the surrounding states.

I’ll admit, up front, to being schizophrenic about this issue: I am a part-time, retail liquor-store employee, but also a long-time private wine enthusiast, by which I got the former gig --
Here’s the other side of the story, from the retail point of view:
Retailers are no more fans of the monopolistic Tennessee liquor distributors than consumers are. We’re all in the same boat: we have to pay the prices they deem ‘adequate’, which are often higher than states which allow direct shipment. We don’t like it that we can’t sell even a corkscrew, or non-alchoholic mixer. But, that’s the rules under which we went into business, so what are we to do?
Now, you propose to let grocery stores peel off our most-profitable sales (wine sells at c. 49% markup, liquor only 29%)?! Why not just tell us to go away?! We won’t stay in business long, at those rates. ‘Sell premium wine’, you say! Hell, premium wineries don’t do business in Tennessee, because the state ‘franchise’ law allows the distributors to “own” the brand—the winery can’t contract with a different distributor till the previous distributor allows it.
The liquor/wine store I work for employs 5 part-time employees. That number will necessarily be smaller if groceries are allowed to sell wine. It’s doubtful that Kroger will require any extra staff to sell Kendall-Jackson—at about the same price, by the way, as you bought it at the dedicated wine/liquor store.
Hey, if current proposed law passes, I’ll be able to by generic wine cheaper. I’ll also likely be out of a job, because my wine/liquor store can no longer afford me. Kroger and Publix will benefit—anyone else?

I must put in a shout out for my Favorite TN winery. It’s located in Clarksville, very near the KY border. Its named Beachaven. I vacation in TN quite a bit and always make a trip to Beachaven to pick up a case or two.

If you are in the Nashville area and don’t mind a minor side trip (50 miles or so north) stop in at Beachaven, well worth the trip.

Old Rip points out why this law *should* be passed, along with others: The wholesalers are trying to protect their profits on the backs of consumers. They know they can’t compete, so they’re prepared to use the government to force people to support their business.

New York suffered under similar laws and nonsense until the Supreme Court smacked it down. We fell under the Supreme Court’s ruling while Tennessee didn’t qualify. It’s funny now because New York residents suffer more because of the Byzantine wholesaler and distributor rules while out of state drinks just call up the winery and get their product direct.

BTW Old Rip: While NY has lost some revenue from out of state wines, they have gained revenue from the *growing* wine industry. Your arguments are full of it. And even if they were true, so what?
There is no right to a profit. If you can’t compete then it’s time for your business to fold.

When growing up in Mitchell County in western North Carolina (one of the few dry counties) I remember seeing an unholy alliance every 4 years when taking the county wet owuld be on the ballot. Out campaigning in the same car you could often see the county sheriff, the most successful local bootlegger, and a Baptist preacher or 3.

RE: Beachaven Winery

John wrote above about Beachaven....Duchess & I drive our motor home thru that area enroute to Illinois and kids/grandkids & always stop for a couple of cases.

RVing is a good way to gather wines. On our last trip thru Illinois, Michigan UP, NY Fingerlakes and Adirondacks we hit Beachaven; Bully Hill & Wagner Estate wineries (NY near Watkins Glen)....brought home a bunch. The interesting thing is now you can find wineries in almost every state East of the Mississippi....We’ll be testing the West this Summer.

Duke

The only thing we have to worry about in KY is the eeeeevil Bourbon-industrial complex....

Actually, it’s easier here than a lot of other places.  There’s a Liquor Barn nearby which is like the Wal-Mart of alcohol.  (Although sadly, they do not have Yuengling lager.)

For wine, make friends with owners of wine shops, who usually know enough distributors that they can get anything.  If you have a favorite, convince him to sell it in his store.

Old Rip said: “Kroger and Publix will benefit—anyone else?”

Yes, I will benefit! I will have more choice as a consumer, there will be more competition, it will be easier for me to purchase wine, and prices will be lower. Your employer will either adjust or be replaced by someone who can. I bet that the wine market will grow. I can go two blocks to Publix to get some decent beer, but the nearest wine store has shorter hours and is several miles away.

Competition is frightening at first.

Trey

We have all the same frustrations here in Georgia.  Although I think I heard that a current bill allowing internet/mail-order wine buying has a better chance of passing this time.  Last I checked there were even a couple of liquor distributors in the GA General Assembly (which is a part-time job).

Here in my town in Ohio, it used to be just the state liquor stores. Then a nice wine store opened up, although it was vaguely creepy because the creepy patrons of the state liquor stores went there, too.

Then the grocery stores and beer barns started operating, so the nice wine store got nicer and less creepy. It expanded. Then Trader Joe came in, with Two Buck Chuck and wine tastings. The nice wine store now has several nice wine stores, and there are other nice wine stores owned by other people.

The more people have access to ordinary decent beer, wine, and liquor (as opposed to creepy stuff meant for winos), the more people learn to appreciate the better stuff. As long as people are drinking Sterno, they can’t imagine that a better product is possible.

Okay, I understand what y’all are saying: You want the convenience, you hope for lower prices—and you don’t care who gets hurt as long as you benefit.
My intended point apparently just doesn’t matter to anyone not a current wine retailer: current wine-sellers went into business by agreeing to abide by Tennessee’s pretty Draconian liquor-sales rules. Now, because some deep-pocketed supermarket chains have a vocal clientele which wants different rules, the legislature is going to change them for the NEW wine-sellers. You may well be pleased for yourself with the result, but surely even you wouldn’t argue that that’s fair to existing wine retailers. Or, do Americans/Tennesseans now feel that changing the rules while the game’s being played is just the ‘modern way of life’?

Old Rip:

When did you get the idea business is “fair”? Why should businesses be treated “fairly”? They should all be treated equally under the law, but not “fairly”. As it stands *right now* you are advocating a system that supports your retailers at the cost of the producers and consumers. How is that fair?

You’re not concerned with fairness, you’re concerned with protecting what you have at all costs. The world has changed, but you refuse to. I have no sympathy for you and those you’re defending. Much like the RIAA and MPAA you want to protect your monopolies by sticking it to everyone else. A pox upon your house.

It is interesting to me that the wine retailers see this as a zero sum game.  Allowing internet sales is not going to make much difference in your business--those of us who have cellars and a desire for wines not available in this state are already obtaining that wine, albeit through very inconvenient and circuitous means.  I still will make the “convenient” 25 mile drive to purchase wines that I need for the weekend or that are more of the nature of the “Kendall Jackson” referred to earlier--after all, as observed at the senate hearing, the shipping costs work to make internet sales the realm of the higher end wines.

As for grocery store sales, there appear to be far more liquor stores per capita in my previous home states (IL and MO), despite grocers (and convenience stores/gas stations) selling both wine and distilled spirits.  As observed by the poster from Ohio, the grocers will help to grow the market. 

Removal of the wholesaler protection laws of TN (including the idiotic single location rule for retailers) might be a necessity, but clearly if that were done, the liquor store owners would not be hurt by grocery sales.  Ideally, it would lead to knowledgeable liquor store employees who would tend to a higher quality selection than would be present in the grocers.  In fact, I long for the day when I can enter a random TN liquor store and not be looked at in shocked disbelief when I mention the cellar worthiness of certain white wines.

Steve (from near nashville)