POSTED ON JANUARY 25, 2012:
Consequences of Convenience
Legislation to allow wine in grocery stores not as simple as it looks at first blush
In the past year, legislation to allow wine and stronger beer to be sold in grocery stores has been noisily wending its way through the state legislature. The pros and cons have been dissected, rehashed and analyzed by state senators and casual consumers alike.
The vote seems simple: give us our booze already. Many Okies want easier, more convenient access to a selection of wines and beers at our local grocery store or convenience stores.
But it's not as simple as it looks at first blush (rosé?).
Mary Stewart is quick to answer the phone at Ranch Acres Wine & Spirits, where she's been the owner and operator for 30 years. Ranch Acres, 3324 E. 31st St., opened its doors in 1959, the same year the Oklahoma constitution was changed to allow sole proprietors to start their own retail liquor businesses.
Changing Oklahoma's liquor laws "is not as easy as just passing one piece of legislation," Stewart said.
"Quite a few of Oklahoma's liquor laws are included in the constitution," she said.
Stewart wasn't sure what might happen if legislation allowing wine and beer in grocery and convenience stores passed. "It depends on how it's passed and they're going to have to change regulations, which will be a long process anyway."
Even if there's an amendment to Oklahoma's constitution and laws change, it may take years before you see a selection of wines and beers in your local Reasor's or QuikTrip. Stewart thinks any changes will probably "hurt the smaller stores more and grocery stores won't carry the same number of [beers, wines and spirits] that liquor stores do," she said.
Bigger chain stores may buy certain items in bulk, which would lower prices but also limit selection. Big box stores "buy huge quantities of certain things to get that item down really low," she said. And mom and pop liquor stores can't compete with bulk pricing though their selections may always be more diverse.
She's also concerned that rules and regulations that apply to small liquor stores may not apply to grocery or convenience stores. "We can't have any refrigeration, we have to be closed on certain holidays," Stewart said. "It would be so unfair to allow that in another setting."
Currently, cash registers in grocery stores like Reasor's won't allow sale of 3.2-point beer between the hours of 2 and 6am.
At the heart of Stewart's concern is also at the heart of the Oklahoma way: that of small business owners. About 82 percent of Oklahoma's businesses are small, local businesses.
Under current regulation, you must be a sole proprietor of only one liquor store and an Oklahoma resident for 10 years before you can get a retail liquor license.
"I would hate to see us that have done business for so long be completely ignored," she said.
We "funnel our money right back into the community too," she added. "We have put all of our tax dollars into this business, and we keep our money in the state."
A Sense of Place
Don Neal accidentally fell into the winemaking business. After retirement, he had a dreamy, relaxed ideal of what owning a vineyard would be like. After a hell-bent tornado blew through Stroud in 1999, Neal and his wife Annetta fixed their house up again and bought the piece of abandoned land next door.
He figured he'd plant 300 vines "just to relax," he laughed.
After three years, he and his wife had a big crop of Oklahoma grapes on their hands. Annetta went back to school to study the chemistry of winemaking, and they've been working and growing and bottling their very own Oklahoma wine ever since.
The Neals' winery, StableRidge, is right off Route 66 smack-dab in the middle between Oklahoma City and Tulsa. But you can find their selection of wines in liquor stores all over the state, including Tulsa.
For the Neals, the issue of allowing wine to be sold in grocery stores boils down to one of production. "We're not major producers like Gallo," Don said.
"We only have [a certain] amount of production. They allocate about a third of their wine inventory to wholesale, he said.
Oklahoma's first wine and liquor distributor is Jarboe Sales Company in Tulsa. As it stands now, Neal said, Jarboe sends him purchase orders for, say, three to 10 cases of wine at a time, whereas a big-box store may require more like 30 cases at a time.
"Where's the wine supposed to come from when demand increases?" Neal asked.
"There's only so much here, and we still have to take care of our mom and pop places. They've been good to us," he said.
Of small liquor stores, Neal said, "They brought us where we are now."
Aside from his loyalty to small retail liquor stores, Neal said another sticky issue is that of ownership. "The state law that we're operating under states that no entity can have two [retail liquor] licenses," Neal explained.
The 1959 laws governing proprietorship were designed to make sure liquor store owners are actual people who can be located and held accountable. "Everyone's overlooking the background" of the wine and beer legislation issue, Neal said.
When you add national chains and big box stores from out-of-state with multiple levels of management, things get a little cloudy.
A Strong Brew of Interests
During Oklahoma's hot and heavy Indian summer in September and October, a Joint Legislative Task Force met twice to discuss the possibility of changing Oklahoma's wine and beer legislation.
As far as task force meetings go, their Sept. 19 discussion was popular. Health and public safety officials, alcoholic beverage industry reps, convenience and grocery store owners, average Okies, and three Oklahoma State Senators and three Oklahoma State Representatives were all in attendance to give their opinions.
As Ranch Acres owner, Stewart, said, changing the way Oklahoma sells beer and wine isn't as easy as passing a simple law. The change would require tinkering with our state constitution, and possibly putting a few different issues to a popular vote.
The task force speculated on the possible economic and social effects of changing up our current rules.
At the task force meeting on Sept. 19, Edmond State Senator Clark Jolley (R) opened the meeting and stated that more than 300 pages of state law could be affected by allowing grocery stores to sell wine and beer.
Brad Naifeh, a partner with Central Liquor Co., said that big, cosmopolitan cities like Denver, Boston and New York City are all thriving without wine in their grocery stores. "So you can be a cosmopolitan city without" this legislation, Naifeh said.
Naifeh, along with George Trilikis (a broker with Trilikis Reliance Wine and Spirits), Danny Shadid (a beer wholesaler and attorney), J.P. Richard (Lawton liquor store owner and president of Retail Liquor Association of Oklahoma), Dale Pound (from the Oklahoma Winemakers Association), and several other liquor industry heavy hitters all expressed their disdain for new wine and beer legislation. But that's to be expected.
A turning point in the meeting was when Terry White, from the Oklahoma Department of Mental Health and Substance Abuse Services, stepped forward with some stark statistics. White said that grocery stores and convenience stores sell to minors in one of three incidents, while liquor stores sell to minors in one out of seven incidents.
"We have 600 to 900 Oklahomans per day calling for residential substance abuse treatment," White said. "It doesn't make sense for our youths, families or economy to increase outlet density."
Jeff Reasor, on behalf of Reasor's, also stood up and spoke at the task force meeting. "Now I know how David felt in the lion's den," he said.
"I think there's an opportunity for people of Oklahoma to enjoy something they haven't in the past," Reasor continued.
He also asked, "Where were all these people when Walmart was coming in and our sales were going away?"
Reasor said, "I really believe there is something to be worked out. I don't believe everyone will be harmed. Yes, some of the weaker stores will go away, but isn't that competition?"
Reasor also said that many of Reasor's customers ask about a wine selection at his grocery stores. "People are looking for it and want it," he said.
Sen. Jolley later asked White more questions about possible negative consequences. "Is it your suggestion that we reduce the current number of liquor stores?" he asked.
White answered, "The more outlets you have, the more negative consequences there are ... So if we're going to have more retailers selling, how do we determine the right density?"
Currently, there aren't any limitations on licenses. If you're interested in opening a little retail liquor store, the ABLE Commission--the state agency that enforces Oklahoma's liquor laws--hands you a 14-page application with detailed questions about your finances, residence and tax status.
At the task force meeting, no one was sure how licensing and judging density would change if grocery and convenience stores, not to mention out-of-state chain stores are added to the mix. Right now in Oklahoma, there are about 600 grocery stores and 5,000 convenience stores.
Ready and ABLE
In December, ABLE Commission Director A. Keith Burt released a statement outlining the state agency's views on new wine and beer legislation. ABLE enforces Oklahoma's state liquor laws.
In his December statement, Burt wrote about his concerns that greater access to alcohol by Oklahoma's youth would increase if our state allowed wine sales in grocery stores.
Studies conducted in other cities may bear out some concerns over social ills. According to a Feb. 2000 study on alcoholism by Dr. Richard Scribner, a "wetter" neighborhood has a higher level of drinking, accidents and violence.
The number of alcohol outlets is related to violent assaults, according to a 1995 study of assaultive violence and alcohol availability in Los Angeles. Each additional alcohol outlet was associated with 3.4 additional assaults per year, the study found. Scribner was also involved in that study.
One other L.A.-centric study (also involving Scribner) in 1994 found a greater number of alcohol-related injury crashes in cities with higher outlet densities.
According to Burt, expanded sales and more outlets would cause an "exponential growth of licensees," which would "certainly strain our existing manpower," he wrote.
"I know that 35 other states allow the sale of wine in grocery stores and 33 of those allow convenience stores to sell wine," Burt wrote. "Because other states allow it does not mean it is right or wrong for Oklahomans."
The task force's report must be sent to the Oklahoma Legislature no later than Feb. 1.
Striking a Balance
Despite possible drawbacks, many Okies want the added convenience of buying wine and strong beer at their local grocery stores. Some people, like Brian Howe, were so fed up with the state's competing interests and confusing regulations that they started a petition to allow expanded wine and beer sales. Oklahomans for Modern Laws is an organization circulating a petition that would put this decision to rest with a majority vote on November's ballot.
Supporters of the petition maintain that wine sales in grocery stores may: increase tax receipts on both the state and local level; help balance the state's budget; retain young talent; strengthen Oklahoma's companies by making them more competitive and attractive; and improve Oklahoma's image.
"If you don't want to purchase wine in grocery stores, simply stated: Don't. But for those of us who do, allow us the opportunity," the group's website stated. Find it at okmodernlaws.org.
Supporters of new legislation also point to neighboring states like Texas and Missouri, who do allow sales of wine and strong beer in their grocery and convenience stores. In Texas, the wine, wine grape and related industries produced an estimated $1.35 billion boon to its state economy.
A balance could be within our reach. Rather than continued restrictions on small liquor stores, new legislation could make way for our mom and pop establishments to expand their horizons, too.
New state laws could allow liquor stores to refrigerate their beer and mixers, or to sell a variety of goods like snacks, deli sandwiches, ice and desserts.
As Burt wrote in his statement on behalf of ABLE, "I want to ensure that Oklahomans have the right to enjoy alcoholic beverages responsibly without harming themselves or others, while at the same time allowing a business friendly environment," Burt wrote. "It's about striking a balance."
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