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Tennessee's liquor laws
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The study also finds the state would generate an additional $19 million to $38 million in new revenue without having to raise taxes and fees. This is money the state desperately needs as it faces a budget shortfall.
The new jobs would generate $59 million to $130 million in new wages that would be spent in Tennessee communities.
| Small wine market increase | Large wine market increase | |
| New jobs created | 1,597 | 3,513 |
| New wages | $59 million | $130 million |
| New state and local revenue | $19 million | $38 million |
| Net new jobs* | 1,000 | 2,916 |
* Assuming a worst-case scenario of 597 job losses by liquor stores
Show me the numbers
The supporters of Red White and Food have always believed that consumers should have more choices about where they buy wine.
Right now, state law limits those sales to liquor stores. This creates an artificially small market that benefits liquor store owners and the wholesalers who supply them.
The total wine market is always larger in states that allow wine sales in food stores.
The first question then is what is the range of potential growth in Tennessee’s wine market if food stores are allowed to sell wine? Researchers believe the market will grow at least 25% and up to 55%. Here’s how they arrived at that number.
The report looked at surrounding states that allow wine sales in food stores. The following table shows per capita wine consumption.
| Per capita wine consumption |
|
Tennessee |
.20 |
Georgia |
.25 |
Missouri |
.30 |
North Carolina |
.34 |
Virginia |
.42 |
Average for U.S. Southern States |
.31 |
Average for entire U.S. |
.38 |
If Tennessee’s wine market increased to the same as Georgia, wine sales in the state would increase 25%. That’s the low end of projected growth.
The high end would be Tennessee's market growing to the average for U.S. Southern states. In that case, Tennessee’s market would grow 55%.
Who’s creating the jobs?
A significant growth in the wine market will create jobs in a number of industries, including:
- Licensed wine wholesalers
- Wine brokers and sellers
- Transportation
- Construction companies to build new warehousing and facilities
- Specialized equipment providers
- Advertising and marketing service providers
Food stores will also add jobs because customers who purchase wine tend to purchase more items and better quality items than other customers.
What’s the impact on liquor stores?
The report expects this change to have an impact on liquor stores.
Between 104 and 597 jobs are at risk, according to the report. This number is far less than what the liquor store industry has claimed would happen and far less than the number of jobs created by the new legislation.
The report notes that not all liquor stores are created equal. Those jobs most at risk are in stores with a high volume of wine sales but very little customer service or distinctive inventory. Well run liquor stores with a good selection and excellent customer service may feel little impact and even could benefit from the additional exposure of customers to wine.
The legislation to allow wine sales in food stores recommends some benefits for liquor stores:
- Owning multiple stores to build a valuable franchise and purchase in bulk at lower prices
- Selling their stores to out-of-state companies
- Having wine tastings in store to serve customers better
- Allowing liquor stores to donate to charities for marketing sponsorships
- Allowing liquors stores to sell additional items