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Saturday, March 24, 2007
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Legislation would allow wine sales in grocery stores
Associate Editor A loaf of bread. A jug of wine. And just one trip through the grocery cashier's line.
That's the idea behind a bill introduced in the Legislature that would allow cities, counties and towns to issue off-sale wine licenses to supermarkets with at least 8,000 square feet of space.
Those who run grocery stores say it's a good idea that would translate into more convenience and lower prices. Those who run liquor stores say it would dramatically change the playing field and would hurt municipal liquor stores and their contributions to the tax coffers.
Wayne Van Vliet, director of liquor operations for the city of Nisswa, said 100 percent of the profits from the Spirits of Nisswa (off sale) and the Pickle Factory (off sale/on sale) go toward the reduction of city property taxes. In 2006 Nisswa's net gain from its municipal liquor outlets totaled about $300,000.
"To lose that advantage is going to hurt," he said
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Racks and shelves filled with wine fill Spirits of Nisswa, a city-owned liquor store. The liquor store and the Pickle Factory generated an estimated net revenue of $300,000 for the city of Nisswa in 2006, city officials said. Brainerd Dispatch/Nels Norquist
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Van Vliet, who started working at the Pickle in 1981, also voiced concerns about the increased access underage customers and employees would have to wine. He said his liquor outlets could hire employees as young as 18 but the city policy is to hire only those who are 21 and older.
He and Ginny Bergersen, co-manager of Spirits of Nisswa, said they think the current law, which allows liquor stores under the same roof as grocery stores as long as they have a separate entrance and a separate cashier, works just fine.
"That's about as convenient as you want it to be," she said. "Why make a controlled substance convenient?"
Since wine is Nisswa's biggest profit maker, Van Vliet said it would have a significant impact on profits.
Bergersen, who noted that liquor stores can't sell any food that's not part of a drink recipe, predicted grocery stores would soon ask to sell hard liquor if their request to sell wine were granted. She also emphasized the quality service liquor stores provide customers and their ability to carry hard to find wines.
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Steve Quisberg, president of the firm that owns Cub Foods stores in Brainerd and Baxter, said he'd make room for wine in his beverage aisles and in other select store aisles if the Legislature approves grocery store sales of wine. Brainerd Dispatch/Steve Kohls
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"The service we provide is so much better," she said. "They (grocers) have a tendency to stick with the industry best sellers. We pride ourselves on being able to help people."
Nisswa's municipal outlets employ five full-time and 10 part-time employees.
"It works well," Van Vliet said of the current situation. "It produces millions statewide."
Steve Quisberg, president of S & R Quisberg Inc., which owns Cub Foods stores in Brainerd and Baxter, agreed that grocery stores probably wouldn't try to compete with liquor stores by selling the higher-end wines.
"We're going to be in more the volume wines," he said.
Customer convenience and lower prices are the two main reasons Quisberg favors the legislation. He expects grocery stores would offer loss leader wines similar to the way his stores sometimes lose 20 cents a pound on turkeys in order to get customers in the door.
"The pricing (of wine) is going to come down," he said.
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Ginny Bergersen, co-manager of Spirits of Nisswa, and Wayne Van Vliet, co-manager and Nisswa's director of liquor operations recently discussed how a bill to allow the sale of wine in grocery stores might affect municipal revenues. Brainerd Dispatch/Nels Norquist
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Customer habits change over the years, Quisberg said, noting that baking aisles used to offer more goods when people had more time and inclination to cook. Picking up a bottle of wine for dinner while grocery shopping is a convenience that's customer-driven.
"It's just something that's long overdue," he said. "It's going to come in the near future."
He attributes the grocery industry's failure to pass similar bills during the past 20 years to the strength of the liquor distributors' lobby. Quisberg expressed confidence his stores could maintain proper security. His Baxter store, he said, has 32 cameras. When cigarettes or beer are scanned at his store a message comes up to remind cashiers to ask for identification.
He said that asking the state for the right to sell hard liquor was not in his plans. Expanding beyond wine sales would require considerably more shelf space than would be needed for just wine, he said.
"And, I don't know anything about it," he said of the liquor industry.
Wine in grocery stores?
How area legislators plan to vote:
Rep. Al Doty, DFL-Royalton - No.
Rep. Larry Howes, R-Walker - No.
Sen. Paul Koering, R-Fort Ripley - No.
Sen. Mary Olson, DFL-Bemidji - No.
Rep. John Ward, DFL-Brainerd - Undecided.
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Thirty-three other states allow grocery stores to sell wine, according to the Minnesota Grocers Association.
Convenience is one of the big issues, Quisberg said, noting that a parent who is shopping with children might be reluctant to make a separate trip to the liquor store.
"For some people there's a little stigma about going to the liquor store," he said.
A spokesman for the company that owns Super One in Baxter could not be reached for comment.
Gary Bethke, owner of Esser's Warehouse Liquors stores in Baxter and Brainerd, is a strong opponent of the legislation.
"The biggest thing about wine in grocery stores is that it changes the playing field," said the 42-year veteran of the liquor business. "A very large part of our income is derived from the sale of wines. This will dramatically effect incomes and jobs, the people we hire."
He predicted many small liquor stores will go out of business and said liquor stores are very competitive in their prices.
"Our pricing in this state is extremely competitive," he said. "Yeah, the mark-up on wines is a little bit higher. We run our loss leaders just as the grocery stores do on some items."
Bethke expressed concerns about under-age cashiers who work in grocery stores and the temptation they might have to look the other way if other young people try to buy illegally.
The law, he said, would hurt municipal liquor stores.
"I can't think of a legislator from any community that has a municipal liquor store who would vote to have the profits from the municipal store be greatly curtailed," Bethke said.
The liquor store owner said he was one of the founders of the Liquor Store Retailers Association.
"All these small owners, myself included, have their life savings tied up in these stores," Bethke said.
The Senate bill that would allow the issuance of off-sale wine licenses is scheduled for a hearing before the Commerce Committee on Tuesday. Testimony was heard on the House bill in February and it was not included in the current version of the House's omnibus liquor bill.
MIKE O'ROURKE may be reached at mike.orourke@brainerddispatch.com or 855-5860.
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