It’s Time for Wine in Connecticut Grocery Stores. Allowing Wine Sales in Local Grocery Stores Benefits the State’s Economy

 

Expanding wine sales to local grocery stores will create jobs, protect farmland, and inspire the production of more locally sourced wines.  Connecticut remains one of only a handful of states that still prohibit wine sales in food stores. There is plenty of evidence in neighboring states that suggests allowing the sale of wine in grocery stores will have little to no negative impact on Connecticut businesses. In fact, allowing the sale of wine in grocery stores is likely to yield significant benefits to Connecticut consumers and the state’s economy.

Selling wine in grocery stores creates jobs and revenue. According to a recent study by Stonebridge Research Group, LLC, allowing the sale of wine in Connecticut’s food stores will create an estimated:

1,018 new jobs

Representing $47.5 million in wages

$23.9 million

in additional state revenue in the first year

$21.9 million

in additional state revenue in subsequent years

$189.6 million

Total economic impact new wages, sales + tax revenue

Grocery store wine sales will have no significant impact on local package stores. The Stonebridge Research Group study analyzed the 34 (now 36) states (and District of Columbia) that allow grocery stores to sell wine and found that package stores continue to operate successfully in states where wine is sold in food stores. In many cases, the number of package stores increase with the expansion of wine sales in grocery stores. According to research, the wine sold in grocery stores does not represent a full replacement of wine sales for local package stores, but, rather, these sales represent an expansion of overall sales.

Over a five-year period, 22 states saw an increase in the number of package stores when wine sales were introduced to supermarkets; one state’s package store count remained stable; and 12 states saw a decline in package stores. It is worth noting, however, in many of the states where package stores declined, the number of food stores also decreased, suggesting broader economic factors — other than wine sales — may have been involved.

Package Store Counts 2005-09 

Arizona: +27

D.C.: -4

Florida: +205

Illinois: +147

Iowa: +6*

Missouri: -18

Nebraska: -14*

Texas: +60

The study’s findings negate the concerns that allowing food stores to sell wine will severely damage the business of existing package stores and will cause many to go out of business. These facts do not support that argument.

Acknowledging wine sales by grocery retailers could have some negligible impact to smaller package store owners, we agree that it is important to have a plan to protect small businesses. Solutions that allow package stores to maintain current profitability by expanding their portfolio of products levels the playing field for them. Highly consumable items such as salty snacks, various cheeses, chocolates, and gift baskets give consumers the option to purchase additional items when shopping for their beer, wine, and liquor and will make up for lost revenue.

*Decline in number of food stores during the same period.

Increasing wine sales promotes local wine producers and protects farmland

Allowing wine sales in grocery stores will ultimately lead to an increase in the volume of grapes and fruits grown in Connecticut, allowing for the growth of wine production by Connecticut wineries and vineyards. This will create more jobs in the agriculture sector, protect farmland by incentivizing the growth of higher value crops, and inspire new growers.

No disruption to the three-tier system

Grocery store wine sales do not negatively impact distributors; in fact, the state’s distributors stand to benefit from increased wine sales. Furthermore, distributors also benefit from the decreased cost to serve (CTS), as grocery retailers are more efficient receiving products through industry-specific routines and productivity. Increased sales at a lower cost to serve is a winning formula for any business.