214 permits issued for wine sales at Arkansas grocery and convenience stores

Grocers and convenience stores across Arkansas will begin stocking their shelves with an expanded assortment of wines today, after a quick vote by the Alcoholic Beverage Control Board on Wednesday issued 214 new permits to stores in "wet" counties.

The vote -- finished within minutes of the board's 9 a.m. call to order -- ended an effort by several of the state's liquor stores to block expanded wine sales by their competitors, including big-name sellers such as Kroger and Wal-Mart.

Previously, grocery and convenience stores were limited to selling only small-batch farm wines, but lawmakers voted earlier this year to allow grocers to expand their selections.

Proprietors of smaller liquor stores argued that the change unfairly allowed their competitors to increase their alcohol sales without having to abide by the same rules as liquor stores. Among those rules is restrictions on how close liquor stores can be to schools and churches.

Alcoholic Beverage Control Director Mary Robin Casteel said Wednesday's vote allows the newly permitted stores to begin expanded wine sales today. Earlier, she had given the go-ahead to stores, allowing them to stock up on wines in anticipation of the vote, but they were not allowed to place bottles on shelves.

None of the board members opposed issuing the new permits.

On Tuesday, a U.S. district judge in Little Rock declined to issue a preliminary injunction against the permitting process. That cleared the way for Wednesday morning's vote. The injunction had been sought by several liquor store owners, who argued that discrepancies in the rules the different types of stores must follow violated the Equal Protection Clause of the 14th Amendment of the U.S. Constitution.

Grocers and convenience store owners began lining up to obtain the new wine sales permits as soon as Act 508 of 2017 went into effect on Oct. 1. The Alcoholic Beverage Control board received 216 applications within 17 days, and all but two were approved Wednesday.

None of the applications was rejected outright, but two were scheduled for a later administrative hearing, said Department of Finance and Administration spokesman Scott Hardin. In addition to the first batch of applications considered, Hardin said another 22 stores have applied and will be considered at a later board meeting.

Of the permits approved by the board Wednesday, more than three-quarters were issued to five retailers: Wal-Mart, Harps, Kum & Go, Walgreens and Kroger. Wal-Mart and Sam's Club led the pack with 73 permits, according to a list provided by Hardin.

"We're stocked and ready to go," said Teresa Dickerson, corporate affairs manager for Kroger's Memphis-based Delta division, which includes the company's 34 stores in Arkansas.

All 19 Kroger stores in Arkansas counties where alcohol sales are legal have applied for the permits, Dickerson said. Individual store managers, she said, made decisions on varieties and vintners.

Liquor store owners fear that the new permits will cut into their profits. During this year's legislative session, when lawmakers in both chambers passed Act 508 by slim margins, a lobbying group for liquor stores predicted that the law would cause as many as 40 stores to close and 100-150 people to lose their jobs.

In Mountain Home, Judicious Spirits owner Eve Isbell said she had already lowered the prices of all the wines she expected to be sold by the Wal-Mart Supercenter in town. In order to do so, she said she had to start buying in bulk.

"I don't think it's fair to punish my customers for being loyal," Isbell said. "I'm not going to quit."

Neither Isbell nor her store were one of the four plaintiffs in the federal lawsuit decided Tuesday, though she said she and other owners were looking at their legal options. As for the decision Wednesday to grant the permits, Isbell said the Alcoholic Beverage Control board is bound by the rules lawmakers make and that the courts uphold.

"It's difficult to fight the largest [retail] corporation in the world," Isbell said, referring to Wal-Mart.

In a statement Wednesday, Anne Hatfield, a spokesman for Bentonville-based Wal-Mart, said: "We are happy to offer the expanded wine assortment that our customers tell us they want. Customers will find the new wine selection in our stores and clubs in the coming days."

Wal-Mart estimated that it already has spent $1.5 million in preparation for expanded wine sales.

Not all of the stores granted permits by Alcoholic Beverage Control will immediately begin selling more wines.

Edwards Food Giant, based in Marianna, has 11 supermarkets in the state, including Cash Saver outlets. All but three of the stores have applied for the wine permits, Paul Rowton, the company's vice president, said Wednesday.

"I'd love to get all deliveries this week, but I don't really think that's going to work," Rowton said, citing an expected logjam of permit-holders placing their orders today and distributors making their deliveries. Rowton said he has high hopes that the Edwards store on Cantrell Road in Little Rock would be stocked today and ready for sales.

Edwards stores in Marianna, Little Rock, North Little Rock, Forrest City, Bryant and Harrisburg have applied for the permits. Store shelves have been cleared, ready for the shipments, he said.

The Edwards store in Beebe is in White County, which is dry. A Jacksonville store is in a precinct where such sales are prohibited, although voters approved a measure Tuesday allowing by-the-drink sales of alcohol. The Edwards store on Baseline Road in southwest Little Rock won't seek a permit because of its small size, Rowton said.

Grocery stores in Tennessee began selling wine about a year ago after similar legislation there.

"We haven't had any issues," Kroger's Dickerson said of the Memphis sales. "Our customers love it, and they express their gratitude for one-stop shopping."

She said today will be the first day of expanded wine sales at Kroger.

Information for this article was contributed by Robbie Neiswanger of the Arkansas Democrat-Gazette.

A Section on 11/16/2017