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Tennessee House approves wine in food stores bill, sends it back to Senate to resolve differences

Richard Locker, The Commercial Appeal, Memphis • Dec 17, 2015 at 6:01 PM

NASHVILLE — The state House of Representatives on Thursday approved a bill allowing Tennessee food stores to sell wine, but lawmakers must work out relatively minor differences with the version approved by the Senate in January before it can become law.

The bill won House approval, 71-15, with six members abstaining.

Under both versions, towns, cities and counties with retail liquor stores or liquor by the drink in bars and restaurants can start holding public referendums this November in which voters can decide whether to permit local food stores to sell wine.

But wine sales can’t begin in food stores before July 1, 2016, and food stores within 500 feet of a liquor store can’t start selling wine until July 1, 2017, unless the nearby liquor store owner gives written permission to the Tennessee Alcoholic Beverage Commission.

The differences between the two versions are relatively minor and the Senate sponsor, Sen. Bill Ketron, R-Murfreesboro, told reporters after the House vote he believes the Senate will go along with the House changes. The Senate version requires food stores to have at least 1,200 square feet of retail space and pay an annual state licensing fee of $850 to sell wine, the same fee that liquor stores pay. The House bill requires a minimum 1,200 square feet of space and an annual fee of $1,250, and also expands number of counties where beer retailers can locate.

"I think we're content with all the amendments and I think the Senate will approve," Ketron said.

The House tabled an amendment that would have removed a mandatory 20 percent markup from the wholesale price of wine to the retail price. House members also tabled amendments that would have allowed “high-gravity” beer sales in grocery stores and that would have moved up wine sales in food stores to 2015.

Rep. Jon Lundberg, R-Bristol, the prime House sponsor, opened the debate by listing the history of legal liquor sales in Tennessee since Prohibition ended. “In 1939, this body approved referendums for package stores. In 1967, this body allowed referendums on liquor by the drink. Hopefully this body will this year allow referendums on wine sales in food stores.”

He later argued, “If we pass this bill, not one bottle of wine can be sold on a grocery store shelf without local voters approving it.”

House Democratic Minority Leader Craig Fitzhugh of Ripley, who voted for the measure, said lawmakers have “spent years on this issue. It’s gotten more press than any other issue this year. It’s only the second major bill we’ve debated on this floor. But we haven’t done a thing to extend health care to 330,000 Tennesseans.”

Rep. G.A. Hardaway, D-Memphis, said his vote for the bill “is in support of the right of my community to determine its own socioeconomic destiny,” but he said he’s not sure yet whether he would vote for food store wine sales in a Memphis referendum.

Rep. Andy Holt, R-Dresden, carried on a one-man tirade against the bill and voted no after criticizing the referendums. “We participate in the form of government called a democratic republic so we can make decisions on behalf of people we represent but we’re not doing that in this case.”

Holt called the bill “crony capitalism” for giving some parts of the liquor industry advantages over other parts and argued that it was a “non-typical passage” through the House committee system.

Rep. Ryan Haynes, R-Knoxville, said, “Some of the members would take us back to Prohibition if they could.” He said the arguments against the mandatory minimum 20 percent markup is to prevent stores using wine as a “loss leader” to sell other products.

“I don’t want to see wine on grocery store shelves in my hometown but I do believe the people in my district have enough sense to decide for themselves whether they want it there or not,” said Rep. David Alexander, R-Winchester. But Alexander argued that the bill could be a “detriment” to Jack Daniels Distillery, which employs hundreds in his district.

After more than an hour of debate, Rep. Richard Floyd, R-Chattanooga, raised the specter of increased drunk driving for the first time and said lawmakers are “sticking it to 600 small business owners,” the state’s liquor retailers.

West Tennessee House members who voted No on the wine bill: Reps. Andy Holt, R-Dresden; Ron Lollar, R-Bartlett; Steve McDaniel, R-Lexington; Debra Moody, R-Covington; Barrett Rich, R-Somerville; Joe Towns, D-Memphis.

In addition, Rep. John DeBerry, D-Memphis; Jimmy Eldridge, R-Jackson, and Bill Sanderson, R-Dyersburg, "blue-lighted" the bill, which means they were present but abstained. Rep. Johnnie Turner, D-Memphis, did not vote at all. Rep. Steve McManus, R-Memphis, had an excused absence from the chamber Thursday and did not vote.

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