Gallatin liquor stores brace for wine bill
Gallatin liquor store owners are asking the city to stop permitting of new package stores until the population increases.
Gallatin liquor stores brace for wine bill Gallatin liquor store owners are asking the city to stop permitting of new package stores until the population increases. Check out this story on Tennessean.com: http://tnne.ws/1bjcGL5
By Josh Cross;, jcross@mtcngroup.com; Published 4:28 p.m. CT Feb. 18, 2014
Matthew Parker, manager of Plantation Fine Wine and Spirits, arranges bottles in the store's wine section. Gallatin's liquor store owners want the city to place a moratorium on new establishments.(Photo: Josh Cross / Gallatin News Examiner)
Gallatin liquor store owners are asking the city to place a moratorium on permitting new package stores as the General Assembly debates legislation that would open the door for wine to be sold in grocery stores across the state.
The Tennessee House of Representatives is scheduled to vote on a bill Thursday that would lift the ban, which limits the sale of wine only to liquor stores. The vote comes after the Senate approved a version of the bill in January.
"We sell two items, and it seems the state is in a drag race to eliminate one of them or open it to all of the markets," said Ron Wills, owner of Red Carpet Liquors in Gallatin.
The House Finance Committee approved the bill earlier this month which would let businesses such as supermarkets and convenience stores sell wine beginning in 2016 if communities pass a referendum allowing it. Differences in the House and Senate bills would have to be worked out before the legislation could gain final approval.
Owners and representatives from several of Gallatin's seven liquor stores asked the Gallatin City Council to cap the number of establishments at seven during a Feb. 11 meeting. The council is scheduled to discuss the topic during its next committee meeting on Tuesday.
"Obviously, we don't want to cap it at five and put two of our fellow liquor stores out of business, but we're already over-saturated at seven and we certainly don't want to see that go any higher until the population comes way up," Wills said.
If wine is allowed to be sold outside of liquor stores, it would take away the establishments' most profitable item, said Plantation Fine Wine and Spirits Manager Matthew Parker, whose family owns the store. On average, 30 to 40 percent of a liquor stores' sales are from wine.
"Essentially, the profit margin on wine is almost twice as much as liquor," he said. "(Wine in grocery stores) is definitely going to affect us quite a bit."
Population gain would allow eighth store
While liquor store owners are confronting the possibility of losing their exclusivity on wine sales, they are also faced with a potential eighth store being permitted in the city.
Currently, Gallatin limits the number of liquor stores to one for every 4,000 residents. According to the U.S. Census, in 2010 the city had 30,278 residents, which means that when the population reaches 32,000, another store will be eligible to open in Gallatin.
"At this point, there is no way that we could handle an eighth one with the population we have now," Wills said. "The doors would close — and they may anyway with us losing wine."
By comparison, Hendersonville, which has a population of 51,372, according to the 2010 Census, has only four liquor stores. The city's municipal code limits new stores to one for every 12,000 residents.
Having another liquor store in Gallatin wouldn't take advantage of untapped revenue, Wills said.
"(Having more stores) does not increase the revenue," he said. "You're just cutting up the same size pie into smaller and smaller and smaller pieces, to the point where you can't own a liquor store and earn a living."
Parker said Plantation Fine Wine and Spirits is taking steps to prepare for wine in grocery stores by looking at reducing costs associated with the store.
"We have the luxury where we can cut down the size of the store," he said. "It's disappointing to us, and it's going to be disappointing to all of our clientele."
While he feels wine in grocery stores eventually will be allowed, Parker said he would "be surprised if nobody closes down" as a result.
"They are our competitors and, yes, we like to do better than them, but at the same time we don't want to see anybody go out of business over it," he said.
Tennessean reporter Chas Sisk contributed to this report. Contact reporter Josh Cross at 575-7115.
What: Gallatin City Council committee meeting
When: Feb. 25
Where: 132 W. Main St., Gallatin
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