Archive for the ‘Massachusetts Alcohol News’ Category

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Massachusetts: Chains renew effort to sell beer, wine in supermarkets, stores

Source: Boston Herald
By Colleen Quinn
Tuesday, May 10, 2011

Grocery store owners are planning another push to make it easier for them to sell beer and wine in stores.

Under current law, grocery store owners can only sell beer and wine once they receive an alcohol permit from their local communities, but they are not allowed to hold more than three permits in the state – making it difficult for chain grocery stores to sell alcohol.

Lawmakers will hear testimony to change that restriction Tuesday during a Joint Committee on Consumer Protection and Professional Licensure hearing. A bill (S 1851) filed by Sen. Michael Rodrigues (D-Westport) would allow stores to hold up to 20 licenses in the state, but not more than one in any city or town.

Grocery store owners say they need the licenses to boost store sales, especially in smaller stores trying to compete with large chains, according to Jon Hurst, president of the Massachusetts’ Retailers Association.

The package store industry, which could face more competition under the bill, has battled against changes in the past. In 2008, grocery stores took the idea to voters in a ballot referendum that failed.

Massachusetts has some of the toughest laws in the nation surrounding alcohol sales that date back to Prohibition, Hurst said.

“I understand the position of the package stores. They don’t want to see alcohol in grocery stores,” he said. “They want to keep what is essentially a monopoly.”

But the Retailers’ Association wants to see the law loosened up, and called it a “common sense expansion,” Hurst said. Alcohol licenses are overseen by the state’s Alcohol Beverage Control Commission, which is under the oversight of state Treasurer Steven Grossman. Under the law, no one person or entity can have more than three “off-premise” licenses – meaning the alcohol is not consumed where it is sold, according to the Treasurer’s office.

“It would be a great thing for consumers,” Hurst said. “It brings people into your store, and creates impulse buys. If you are getting steaks for the night, then you pick up a bottle of wine as an impulse. It is a sales driver.”

More than a third of all retail purchases are impulse buys, according to Hurst.

Committee co-chairman Rep. Theodore Speliotis said that after the ballot initiative failed, other bills have come up asking lawmakers to increase the number of permits allowed. Speliotis said he has been reluctant to make any changes because “if the public voted no, you have to respect that.”

Speliotis (D-Danvers) said he expects his committee to look at the issue very seriously this week, He said he worries about the effect on the small grocery store owners and independently-owned package stores if more than three alcohol permits are allowed for any one chain. The large chains, if they sold alcohol, could put their smaller counterparts out of business, he said. In his district, a small grocery store, McKinnon’s Market, recently received a license from Danvers town officials to sell beer and wine.

“We have a vibrant and extensive network of small, independently owned package stores that could be potentially hurt by having every major supermarket now sell alcohol,” Speliotis said. “The bottom line is you want to make it as fair as possible to the consumers without destroying any one industry.”

The bill’s other House supporters include Reps. Steven Walsh (D-Lynn), John Rogers (D-Norwood), Paul McMurtry (D-Dedham), Sean Garballey (D-Arlington) and Lowell Democrats Kevin Murphy and David Nangle.


Why Is Congress So Afraid of Mail Order Wine?

Source: Fox News

By: Angela Logomasini

Date: September 29, 2010

The quest by wine and beer wholesalers to maintain their “middleman” role within the liquor industry is simply bad news. A bill making its way through the House (H.R. 5034) sponsored by Bill Delahunt (D-Mass.) supports wholesalers’ promises to limit consumer choice and disadvantage retailers, wineries, breweries, distilleries, and importers.

The topic is the subject of hearings before the U.S. House Judiciary Committee today. Not surprisingly, wholesalers hope this legislation will protect the “three-tier system” for distribution of alcohol, which nearly all states impose. The system requires that alcohol producers (wineries, distillers, brewers, and importers) sell only to wholesalers, who in turn market the products to retailers. It thereby bans any mutually beneficial sales between retailers (wine shops, restaurants, etc) and wineries or other producers that could enhance product selection and save money for consumers.

H.R. 5034 strikes back against market liberalization that the Supreme Court fostered with its ruling in Granholm v. Heald. In that case, the Court ruled that laws in Michigan and New York violated the Constitution’s Commerce Clause. The laws essentially banned shipments from out-of-state wineries to New York and Michigan residents, but allowed the wineries in those states to ship wine. The court held that any such regulations must apply equally to in-state and out-of-state businesses.

Since then, many states have begun allowing direct-to-consumer wine shipping. Richard Mendelson, wine lawyer and author of “From Demon to Darling: A Legal History of Wine in America,” notes: “Within two and half years of ‘Granholm,’ eleven states had leveled up, and none had leveled down completely. Those states had to open their borders to all direct shipping or close them entirely.” This increased freedom has been a boon to consumers who otherwise would have fewer options. It also helps wineries who have trouble marketing specialty products in a world of increasing competition and consolidation among wholesalers.

But the logic of “Granholm” should also apply to retailers, who are now fighting in federal courts for the right to skip the wholesaler tier. The nation’s largest wine retailer-Costco-has gained a partial victory in Washington state and is helping advance a ballot initiative there that would basically break Washington state’s three-tier mandates.

Wholesalers fear the spread of such deregulation. “Direct-to-consumer shipments will never drive a wholesaler out of business, but the deregulation it is fostering will,” noted Craig Wolf of the Wine and Spirit Wholesalers of America in a 2007 issue of The American. Accordingly, wholesalers have been spending millions in PAC donations to members of Congress, pushing them to pass H.R. 5034. The bill would exercise Congress’s constitutional power to regulate commerce by explicitly allowing states to impose regulations would otherwise violate the Commerce Clause.

As introduced, the bill would have allowed states to pass pretty much any regulation they desired, but a scaled-down substitute version that Rep. Delahunt is expected to offer today remains problematic. Tom Wark of the Specialty Wine Retailers Association points out that this draft opens the door to a host of directly discriminatory state regulations focused on retailers, which could ultimately limit consumers’ online buying options.

But consumers who buy direct from wineries or breweries should remain concerned. In addition to curbing freedoms for retailers, the new draft could also bolster state laws that indirectly discriminate against producers. In other words, it might allow discriminatory tax policies or other regulations that would make direct shipping less viable.

Not only is this legislation bad for consumer freedom, it isn’t necessary to “save” the wholesaler business. Wholesalers will not disappear without a mandated three-tier system. In fact, wholesalers do well in places like California and Washington, D.C. where there are no such mandates. Wholesalers exist because they provide a valuable service in getting products to market-but they should have to compete for their place like everyone else.

A key reason the founders drafted the Constitution was to prevent trade impediments between states and maximize individual freedom. Using Congress’s authority under the Commerce Clause to impede commerce simply to serve one-special interest is pure folly.

Angela Logomasini, Ph.D. in American Politics, is a Senior Fellow at the Competitive Enterprise Institute.

Learn more about state alcohol laws here.

States and Cities’ New Stimulus Strategy: Booze Sales

Source: CNBC

Date: Sept. 28, 2010

Thanks to new laws, restaurant patrons in Massachusetts can now start ordering cocktails at 10 a.m. on Sundays, instead of noon. In Arizona they can start hitting the bottle at 6 a.m.-four hours earlier than previously allowed.

Fans of the new rules can clink their glasses and toast the recession, which has state and county leaders looking to revise their alcohol sales laws in order to give small businesses in their borders more sales and also increase tax revenue as they face large budget deficits.

Other law revisions are in the works. City and state politicians in Connecticut and Virginia are leading efforts to modify alcohol laws in their states.

“I have followed the ebb and flow of blue laws for 30 years, and in my opinion the pattern is that repeal efforts tick upward every time there’s a downturn in the economy,” said David Laband, economics and policy professor at Auburn University, who wrote a book on the laws that restrict alcohol sales on Sundays.

In the case of Massachusetts, the extra two hours of alcohol sales are meant to give small businesses a needed boost, officials in the state said, but it will also give some added revenue to the state.

“We have noticed a definite increase in our liquor sales and overall traffic on Sunday mornings,” says Alexa Demarco, the general manager of Mooo., a restaurant within the XV Beacon Hotel in Boston. “This has been also an added luxury to our Sunday morning brunch guests who are looking to order a bloody Mary, mimosa or one of our signature cocktails we now have listed on our brunch menu.”

Expanding alcohol sales hours also keeps residents to stay and spend money within a municipality’s borders, rather than leaving to buy alcohol from a neighboring state or county, says Laband. That was the case in Zephyrhills, Fla. The city passed legislation this year that allowed alcohol to be sold starting at 11 a.m. on Sundays instead of 1 p.m. because local restaurants and convenience stores were losing customers to surrounding counties that were selling alcohol at earlier hours, says Linda Boan, the Zephyrhills city clerk.

In Arizona, allowing alcohol sales to start at 6 a.m. on Sundays is expected to give added revenue to businesses around the state and especially to resorts in Phoenix and Scottsdale, says Representative Matt Heinz (D) who backed the amendment after a resident complained about not being able to buy a bottle of wine while doing her Sunday morning shopping for the week. “It’s common-sense, pro-business legislature,” says Heinz.

In Virginia, the governor is proposing to change the entire alcohol sales structure altogether.

In that state, residents can buy alcohol only from government-owned stores. Governor Bob McDonnell (R) proposed a plan in early September to privatize the alcohol system by selling 1,000 alcohol licenses. The sale is expected to give the state $500 million that would be used to improve its transportation systems.

And in Connecticut, the mayors of the three largest cities-Bridgeport, Hartford and New Haven-are pushing the governor to repeal the state’s blue laws, which ban alcohol sales on Sunday altogether. The mayor’s are saying the state could reap in $8 million in tax revenue after the repeal.

Experts say that with states and cities continuing to face large deficits, more of them will move to relax their laws.

“The economy is definitely a factor,” says Lisa Hawkins, spokesperson at the Distilled Spirits Council of the United States. “States are realizing they’re missing out on much needed revenue.”

Learn more about your state’s alcohol-related laws.

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