Arkansas liquor stores, grocery chains at odds on expanded wine sales
Right now in Texarkana and other Arkansas “wet” areas, grocery and convenience stores are allowed to sell what are termed “small-farm” wines, Those come from wineries that make no more than 250,000 gallons of wine annually.
That may sound like a lot but it’s nothing compared to some of the big producers, which turn out millions to several-hundred million gallons each year.
In order to get any wine from those wineries, which produce some of the most popular brands on the market, Arkansas residents and visitors have to go to a package store. That’s pretty good for liquor stores. The number of license available is limited by population under state law, and that means they have what amounts to a monopoly on such wines.
A new law would change that and allow grocery and convenience stores to start selling those wines, and big-chain groceries have sunk a bunch of money into stores in anticipation, But whether that money goes down the drain is up to a federal judge.
As soon as Thursday, U.S. Chief District Judge Brian Miller is expected to make a ruling in a lawsuit that would block implementation of Act 508 of 2017—at least for a while. And package store owners and grocers alike are on pins and needles waiting for his decision.
Liquor store owners say the act is unfair because it allows grocery and convenience stores to operate without the stringent requirements placed on package stores. They are also worried about the competition and the chains’ ability to buy in bulk, undercut prices and make up the difference with all the other items they are allowed to stock.
Attorneys for the grocery chains say that unlike their clients—who are limited to beer and wine sales— package stores can sell hard liquor, which merits the greater scrutiny. They also point out that under the new law they cannot have more than 20 percent of their profits from alcohol and that they cannot group together to buy wine at a discount. The same wholesale price applies to both package and grocery stores, and each individual store can only buy for its location. So, what will the judge decide? If the act is upheld it will be a blow to liquor stores—especially here in Texarkana, where their long-held monopoly on most booze has been gutted over the years by legalization in formerly dry counties on both sides of the state line.
But the act was clearly meant to allow grocery and convenience stores to start selling all sorts of wines. The time to fight it was before it was passed. Now the deed is done.
We understand the plight of the package store industry. But in truth its monopoly all those years was a product of attitudes about alcohol that have greatly changed. The law hasn’t kept up.
Perhaps the best course would be to allow the act to go into force as intended—and for the Legislature to consider loosening restrictions on the package stores so they can better compete.