Arkansas Senate panel backs grocery-wine bill

Legislation to allow grocery stores, including Wal-Mart Stores Inc. and Kroger Co., to obtain permits to sell wine from any winery cleared an Arkansas Senate committee on Tuesday.

Under existing law, grocery stores can sell wines from only "small-farm wineries" that produce less than 250,000 gallons a year, according to the Alcoholic Beverage Control Board.

In a voice vote with Sen. Missy Irvin, R-Mountain View, dissenting, the Senate State Agencies and Governmental Affairs Committee recommended approval of Senate Bill 284 by Sen. Bart Hester, R-Cave Springs -- less than 24 hours after the bill was introduced.

"This just allows the grocery stores to carry the wine that best suits their business model, and that their customers are asking for," Hester said.

Under SB284, a grocery store may apply to the Alcoholic Beverage Control Board for a wine permit that would allow the store to purchase and sell wine for off-premises consumption at a single location.

Wine inventory orders or purchases, or both, are required to be made by the store for delivery to a single permitted location. Under the bill, an order for an inventory of wine is barred from being combined with an order for another location in a way that would result in a cumulative discount or quantity discount, or both.

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The grocery store wine permit fee under SB284 would range from $1,000 for permitted building space of less than 35,001 square feet -- about the size of two Walgreens stores -- to $5,000 for permitted building space containing more than 75,000 square feet. The fees would be paid into the Arkansas Wine Grants Fund.

Hester said 50 percent of the fees paid for the permits would go to the Department of Parks and Tourism to promote wineries, and the other 50 percent would go into a grant program for Arkansas wineries, adding that "this ought to be beneficial to Arkansas wineries."

Thomas Wilson Smith Jr. told the Senate committee that he, his wife and mother-in-law own the Spirits Fine Wines liquor store at 2516 Cantrell Road in Little Rock. They purchased the store about two years ago.

"We bought this store with the idea that we would differentiate ourselves with our service and our selection of wines, and we have a nice clientele and we have grown the business," he said. "We are in the Wal-Mart parking lot. We are 100 yards from Wal-Mart.

"This bill is a dagger in the heart of the independent liquor stores," Smith said. "They are going to put us out of business. ... We just cannot compete with the big guys."

Smith worried that Wal-Mart will want to sell liquor next.

John Kelly, owner of Longhills Wine and Spirits liquor store in Benton, said wines comprise about 25 percent of his sales.

"I agree this is going to provide better consumer access, but consumer access does not increase demand and, therefore, it does not increase revenue," he said. "This bill favors big business. No doubt about it."

The bill is likely to force him to lay off employees and possibly shut down his liquor store, Kelly said.

Michael Lindsey, director of public affairs and government relations for Wal-Mart, said the Bentonville-based company employs 54,000 people in Arkansas.

"This is a free enterprise, fair play, equal opportunity bill," he told the Senate committee. "We don't think that the data suggests that this bill will close a liquor store."

The bill is good for the company's customers and adds to their convenience, Lindsey said.

Lindsey also said Wal-Mart won't return to the Legislature in 2019 to ask for the authority to sell liquor.

Information for this article was contributed by John Moritz of the Arkansas Democrat-Gazette.

Business on 02/08/2017