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Grocery Stores Snag More Wine Sales, Liquor Store Sales Fall

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Legislation passed in 2017 allows grocery stores in Arkansas to carry more wine options. Since then, Arkansans have been purchasing more wine at the same place they get groceries, instead of a local liquor store.

Prior to the passing of Act 508, which went into effect in October 2017, grocery stores were only allowed to sell wine from small Arkansas wineries that produce less than 250,000 gallons per year. Up to that point, liquor stores were able to carry far more variety when it comes to wine than a grocer could, legally. Now, large grocery stores like Walmart, Kroger, and even CVS and Walgreens can provide almost as many options as a specialized liquor store.

Arkansas State Senator Bart Hester was the lead sponsor of SB284 which led to Act 508, and according to him, it came down to his core values. “It did not change anything as far as what stores could supply,” Sen. Hester explains. “Because they could already sell wine, it did not make sense to me that it had to be made by a particular person or from a particular area. Bottom line – it was a free market bill.”

After facing some roadblocks when brought to the floor, the bill eventually passed by a narrow margin, after Walmart worked out a deal with county-line liquor stores. This agreement stated that if the grocery wine bill should pass, Walmart would not support legislation to turn a dry county wet for 8 years, and in turn the county-line stores would not oppose the grocery wine bill.

Prior to signing the bill into law, Governor Asa Hutchinson said that he “took a balanced view toward SB284, and in the end I was moved to sign the bill by its positive considerations for the consumer. I believe, in the end, this bill is a compromise solution and represents the best path forward.”

This has drastically increased the wine sales at grocery stores in wet counties and has provided consumers with a more convenient means to buy their favorite wines. For the past year, Arkansans have taken advantage of this convenience, treating grocery store trips as one-stop-shops for stocking up on their home wine inventory.

But this consumer convenience has come at a cost to liquor stores across the Natural State.

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David Bevans, owner of Legacy Wine and Spirits in Little Rock (which is right across the street from a Kroger), has fought back against the new law.

“There are a record number of [liquor] stores for sale and closing across the state,” Bevans says. “It has turned the whole industry on its ear.”

Bevans notes that liquor stores were offered some consolation, in that they are now allowed to sell some consumables, but he says that this is not enough to make up for 20-50 percent loss in wine sales.

“We are having to re-adjust our business models just to pick up as many extra points as we can,” Bevans says. “We still have to operate within the same set of laws that have pretty much been in effect since the end of Prohibition, while they are writing new laws to accommodate for wine in grocery stores. They don’t have to abide by the 1,000 foot setbacks from churches and schools, they can have teenagers working there, we can only employ 21 and up, we are only allowed one liquor permit per person, they have stores all across the state.  It’s just not apples to apples.”

It is for those reasons that Bevans contends that the bill was not in fact “free market,” because alcohol is one of the most regulated markets. In his mind, it is the opposite of a free market.

Bevans and other liquor store owners are also worried that this is just a toe-hole, and that eventually similar legislation may be passed regarding hard liquors in grocery stores, or allowing Sunday liquor sales.

A study by the United Beverage Retailers of Arkansas came out earlier this year that showed an average decline of liquor store sales of 5.5 percent following the passage of Act 508. This decline was even larger among liquor stores where wine made up more than 40 percent of sales. According to the study, those stores reported 15 to 28 percent total sales declines.

Although, this same UBRA report did note that hard liquor sales have increased, which has helped to soften the blow of the wine losses for some businesses, although not enough for most.

Liquor stores across the state of Arkansas are trying to find their way in this changing landscape.

RELATED: Arkansas Brewers Guild Grows Alongside Industry

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