Supermarket Beer/Wine Sales: A Solution in Search of a Problem
For some reason (El Somnambulo suspects just the Usual Poor Editorial Judgement), the News-Journal decided to make today’s lead story the introduction of legislation to permit beer and wine sales in Delaware supermarkets.
The Beast Who Slumbers couldn’t care less whether the bill passes or not. It is clearly an attempt by the large grocery chains to take advantage of Delaware’s precarious financial position:
The bill has the potential to raise $10 million in its first year through the new class of alcohol license it would create — a license with a one-time fee of $100,000 per store. There would be a biennial renewal fee of $5,000.
“It’s projected to raise $10 million without pay cuts, furloughs or layoffs. It’s going to raise money,” Viola said.
In other words, in keeping with the Delaware Way, it’s a one-time-only $10 million gimmick. “Money for Nuthin'”, which might as well have been the State’s motto over the past 30 years. An economy built on usurous credit card rates, ‘incorporation fees’ in a ‘business-friendly’ state, legalized gambling, and the like. All while the manufacturing sector was hemorrhaging jobs and businesses.
What is clear, regardless of whether this bill passes or not, is that it is not consumer-driven.
John Viola, one of Delaware’s least distinguished legislators, (Warning: Shameless Plug Alert. It is indeed possible that Viola will be featured in El Somnambulo’s upcoming series on “Not Just More Democrats, But Better Democrats”, scheduled to debut next week) hails from New Castle. The ratio of package stores to grocery stores in New Castle is, what, something like 15-1? How many grocery stores in the state are ‘stand-alone’, and do not have a package store either in the same shopping center, or within a mile of the grocery store?
In other words, this is really a solution in search of a problem, one that the large retail grocers are pushing to enable them to sell alcohol. And that’s fine as long as people call it what it is.
However, the Beast Who Slumbers has detected at least one problem that this legislation might help solve. With the economy sagging, contributions to legislators are likely sagging as well. What better way to jump-start campaign contributions than by introducing legislation pitting two powerful lobbies, the grocery chains and the package store owners, against each other?
‘Bulo predicts that this bill will not even be voted on this session, and that the most successful legislators will be those who avoid taking a stand while accepting contributions from lobbyists on both sides. Call it a win-win.
Tags: Delaware
First let’s pass a bill taking back the bottle deposits as escheat to the state (actually this is in the GOP budget proposal, so props to the GOP). And require the stores to take back and redeem bottles of any brand they sell. Then let’s see how badly the groceries want this.
Anon has a good idea.
I don’t much care about this, either. But will say that is is incredibly convenient to be in a place that lets you get your groceries and booze in the same spot.
This could be useful if grocery stores are allowed to sell it all — not just beer and wine — in helping neighborhoods who have too many package stores get some of them closed because of competition.
I believe it was Roger Roy who tried this back when he got his Sunday sales bill pushed through. Whether it was Roy or not, I believe the sponser ended up pulling it. I also believe this is not a good situation for our area distributors, because the grocery chains would be able to get it from their own distribution model…I think. That was one of the issues, though, back in Roy’s day.
Lastly…
“Money for Nuthin’”,
will we get our chicks for free, too? 😛
I’m for it. I hate making two stops.
Exactly my thought, J! Meet you at the Super G or ACME! Wooooo!
Another aside to this issue is that the more grocery stores that have beer and wine, the worse it is for independent craft brewers. People will buy beer at the grocery store, and the limited shelf space will be devoured by Miller, Bud & Coors (all foreign-owned at this point).
I’m with FSP. Many small shops will close and niche products — craft-brewed beers, for example — will become hard to find.
Bad idea for the local business community and the consumer. Selection will suffer and a lot (if not all) of mom & pops will go under.
Jason, I hate standing in line,too…
http://www.theonion.com/content/node/33300
Grocery stores will sell what they can move off of the shelf for a profit. Out west grocery stores sell it all (but the selection is quite limited) and places like this thrive. Not exactly Mom and Pop (but there are plenty of wine specialty stores), but places that concentrate on a wide selection of fine beverages can certainly compete against the grocery stores.
Beer glass half full FSP
They sell craft beers in NC supermarkets.
I agree with many of the people above… I’m not for it. I don’t like making two stops either but I think it hurt small business, craft brewers, and there’s also just a certain “ick” factor about having booze everywhere you go to shop.
There’s a time and a place for everything
I’m with FSP. Many small shops will close and niche products — craft-brewed beers, for example — will become hard to find.
Not that I totally disagree with you or FSP, but I would imagine they’d be OK where they are now. I wonder how many of these specialty beers are bought on impulse buys? Yes, I accept that some are, but I wonder how much of the overall sales of those it makes up? Impossible to tell, but I still wonder.
“places that concentrate on a wide selection of fine beverages can certainly compete against the grocery stores. ”
Not many of them can. There will be a few, widely scattered in more heavily populated areas.
I can’t understand what’s progressive about putting mom and pop shops out of business so Wal-Mart can dominate yet another market segment.
Maybe Trader Joe’s could sell just the microbrews. One more reason to shop there.
Oh, and ‘bulo’s favorite, ‘Pilsner Urquel’. They go great w/the Oatmeal Cranberry Dunkers. Not.
Beer glass half full FSP
They sell craft beers in NC supermarkets.
J, I think the point FSP and Geezer make is that the grocery stores here have long packed their space “to the gills” of other stuff, it would take a lot of shoe-horning to be able to get just the product that is guaranteed to move (like Bud, Miller, etc and the wines on top of that). There won’t be any space for the specialties or micro-brews for people like us to seek them out and purchase them. They’d take up valuable space on the shelf in a grocery store.
Honestly, I don’t know if the DE grocery stores would really jump on this right away, anyway, given current space limitations and usage. I would, however, expect places like Super Walmart and the like to hurry on in to the pool.
Oh, and ‘bulo’s favorite, ‘Pilsner Urquel’.
MMMMmmmm!!!!
They go great w/the Oatmeal Cranberry Dunkers.
That’s your fantasy, pal.
I can see places like Kreston’s and Moore Brothers and State Line Liquors being AOK. Walmart isn’t going to sell this stuff from their stores. If you are interested in craft beers or Belgian Ales or interesting wine you aren’t going to get that from most grocery stores anyway.
Cass – bingo. That was my point on the micros and independents. People who buy those know where to look. They may take some hit on the impulse-buy market, but I can’t imagine how much of an impact that’d be.
Additionally, DE is one of what…FIVE states that don’t allow this yet? How’s the microbrew/independent market in those other 45 states? Look, I do have fondness for micros and indies, that is for sure, and I’d hate to even imagine them going away. I just can’t help but to think that’s more fear than fact.
Just an observation – the News Journal story states that this law would only authorize booze to start being sold at places where “At least 90 percent of the sales would have to be food that is not immediately consumable, such as frozen foods and canned goods.”
So this obviously means supermarkets would be in, but I’m not so sure about Wal-Mart. I certainly wouldn’t think the “regular” Wal-Marts (i.e. the ones on Route 40 & near Prices Corner) carry enough food products that it constitutes 90% of their sales. Even with the SuperCenters that have the big food area, I wonder whether with everything else they carry the food could possibly account for 90% of sales.
I would not be at all surprised to see the big guns (Wal-Mart, Target, K-Mart, etc.) lobby to get the percentage of sales restriction slashed from the bill while retaining the square footage requirement so that they could compete with supermarkets while squeezing out convenience stores.
Personally, after recent trips to Ohio & California, my observation was what most have hinted – it’s convenient but the selection kind of sucks.
The other problem I noticed in California was even if they do make an attempt to carry specialty products, they can suffer from a lack of turnover. I was at a Target and bought a craft brew from Hawaii (one of maybe 5-8 non Bud/Miller/Coors beers that was available) to try because I had never seen it in Delaware. Unfortunately in my rush to get out of there I didn’t check the bottles and later realized that they were long expired, and the beer was skunked and basically undrinkable. That’s not to say that sort of thing can’t happen at your local liquor store – but given that people actually go there looking for craft brews I would have to think it’s less common.
JohnnyX makes several interesting points. ‘Bulo will simply say that it’ll be fascinating watching the amendments that get filed with this bill. You can bet that Walmart will be there. Probably the drug stores as well.
‘Bulo reads the intent of the 90% threshold to exclude fast food places and the like, not necessarily the big boxes.
X’s point about specialized product is also on point. It suits the Anheuser-Busches and the Coors of this world as they’ve got the resources to service the stores, rotate the stock, and remove out-of-date product.
‘Bulo bets they’ve got their checkbooks out as well. He encourages readers of DL to treat this issue as a window into the Delaware Way. It’ll be more fun to follow that way.
Craft beer gets shut out or pushed to the side at supermarkets. The big three introduce product after product, and six to seven different packaging styles for the top sellers, just to push craft brews out. There’s a few reasons craft brew only accounts for 4% of the market share, and that’s a big part of it.
You should see http://www.beerwarsmovie.com if you get the chance.
I see this as more competition for Total Wine (good riddance for them if they go). Most smaller liquor stores have better prices for liquor than teh larger stores. The ONLY thing i buy at Total Wine is wine and that is maybe 10 bottles a year. Fairfax liquors is 5-7% lower than Total Wine for their liquors. Plus they are helpful.
Craft beer gets shut out or pushed to the side at supermarkets.
No one is arguing this. Most of us looking for decent beer aren’t going to places that don’t sell craft beer. That means we aren’t buying grocery store beer and we aren’t in the corner package beer joint, either. The other side of that is that is craft beer sold as well as whatever swill was coming from the top sellers it wouldn’t really be craft beer any more (cf Sam Adams)
Interesting that FSP is not for the free market to decide on the fate of craft brews. Just saying.
*Disclaimer, I work for Dogfish Head.
The problem with the grocery stores selling beer and alcohol isn’t so much that they sell more bud, miller, coors as much as it is that they have people from bud, miller, coors doing the product placements in the beer aisles. If you don’t think this is a problem, you are greatly misinformed.
Now, I have lived in Charleston, SC, and it is fucking awesome to be able to scoop up everything in one stop. However, unless you are going to Whole Foods, the beer selection really sucks.
Cassandra,
Just so I understand your argument….
“This could be useful if grocery stores are allowed to sell it all — not just beer and wine — in helping neighborhoods who have too many package stores get some of them closed because of competition.”
So you want some of these small businesses closed?
“Most of us looking for decent beer aren’t going to places that don’t sell craft beer. That means we aren’t buying grocery store beer and we aren’t in the corner package beer joint, either.”
So where are you going to get good craft beer? Are you gonna drive from upstate down to Rehoboth or Milton to get your Dogfish on? Or perhaps across state lines? My guess is the average consumer will either do the latter, or perhaps just forgo craft beer altogether. Either way, the state loses money, jobs, and epic beer.
Sure, there may be one or two “specialty stores,” but the consumer will lack options, and options are the best thing we consumers could ask for.
‘Bulo,
I have to agree that it is all about pitting two lobbies against one another.
So you want some of these small businesses closed?
Yes.
So where are you going to get good craft beer?
Exactly where I go now — Kreston’s and State Line Liquors. Both of whom have really fantastic selections of craft beers and foreign beers. And these two do not intersect with the businesses referred to in the first question.
Why do you want them closed?
There are neighborhoods in the City of Wilmington (and in others in NCCo, I imagine) where the “package goods stores” are thick on the ground and mostly a neighborhood nuisance. In West Center City, they occur about every 4 blocks square and are central to some of the street BS. The closest these stores get to craft beer might be Alize.
A couple of local grocery stores able to sell beer will certainly put some of them out of business.
‘Bulo, have you been to the Czech Republic? I’ve been there – that’s where the original pilsner was invented in Plsen. The beer is so much better there than in the U.S. (Yes, I had the Pilsner Urquell there.)
No, but the Pilsner Urquell he had over here was good enough on its own. He’s a big Dogfish Head fan as well (Complimentary cases, even in bribe form, of 60-Minute IPA, unapologetically accepted…) .
Otherwise, he and the senora would rather drink wine.
cassandra, i was just going to make that point. yes, it is probably a good thing that several stores were to go out of business. however those that specialize in the 40 and a airline bottle will always have their place (and their extremely high prices). While the supermarkets will hurt some, those with good quality selection, good customer service and good pricing will actually do better.
The setup in NYC is interesting. In NYC you can buy beer in groceries, but not wine or spirits. And you cannot buy beer in a liquor store (wine and spirits only).
This works well in NYC since it allows liquor stores to succeed in smaller retail spaces without investing in the infrastructure for handling and chilling cases of beer.
In practice, supermarkets carry cases of mass-market beer, while small groceries sometimes have amazing selections of specialty microbrews and imported beer.
NY state has a different arrangement, anon. Places that sell beer are different than places that sell wine and spirits. So you had to go to one store to get wine or other spirits, but you couldn’t buy beer there. Luckily, if you wanted beer, the local Wegmans had a good selection. But you still had to go to two different places!
“Interesting that FSP is not for the free market to decide on the fate of craft brews. Just saying.”
There’s no free market with a government-mandated middle man. Just saying.
‘Bulo has now read the bill, and it raises at least two more questions:
1. If permitting grocery stores to sell beer and wine is a matter of convenience to the consumers, then why are ‘convenience stores’ prohibited from selling beer and wine? ‘Bulo will simply reiterate that this bill is not being consumer-driven.
2.’Bulo would like to know what this means: “…except that a wine and beer grocery store shall not be permitted within the aforesaid geographical limitation of another wine and beer grocery store.”
Does this mean that, if there are two chain groceries near each other, only one would be entitled to sell beer and wine? If so, how would the winners and losers be determined?
But, FSP, today there is a middle man . . . tomorrow the middle man might be extended. But you seem against that possibility.
“There’s no free market with a government-mandated middle man. Just saying.”
1000000% correct.
Three tier system is bullshit.
Cassandra,
I guess Wilmington is another story. Down here at the beaches, we have package stores at a rate of less than 1 per quarter mile on highway one. Same goes for grocery stores. What happens when these package stores are squeezed out? And trust me, there is no “BS” going on there, just jobs and money reinvested in the community.
Wonder what the folks living near your package stores would say?
In any event — the package stores in Wilmington (the parasite stores) certainly are not reinvesting in their communities or providing jobs to anyone who lives in those communities, either.
“But, FSP, today there is a middle man . . . tomorrow the middle man might be extended. But you seem against that possibility.”
You have confused me here. What are you saying?