When you get right down to it, the state’s recent decision to allow grocers to hold additional liquor licenses is really a tale of two customers.
The first customer is a regular client of The Urban Grape. This past Saturday he came to the store and bought a thousand dollars worth of wine.
The second is a woman from Vermont who was in town and stopped into our store because “the grocery stores down here don’t sell wine and I need a bottle for tonight.” She bought $15 worth of wine.
Which do you think is more valuable to us?
The answer is, they both are. We love and value our regular big spenders. They show us loyalty and Lord knows it’s a lot of fun to work with them on a weekly or monthly basis. But the reality is that they are just the icing on our cake. The cake itself is made $15 dollars at a time, day in, day out, over and over and over again.
You can imagine our dismay when we woke up on Sunday morning to the news that a “compromise” had been reached between the Massachusetts Food Association and the Retailers Association of Massachusetts that would allow grocery stores to increase the number of liquor licenses grocery stores can hold from three to nine (in a sliding scale from 2012 to 2020). The compromise means that this question will not make it to the ballot next year, as was expected, and the voters of Massachusetts will not have an opportunity to express THEIR opinion on this matter as they did in 2006.
What happened in 2006? The ballot measure that would have allowed grocers to sell beer and wine at more locations was soundly defeated. This time around both sides remarked that they wanted to avoid a “costly” battle meant to sway voters. Forgetting, of course, that the real cost of their back room deal is in the small boutique liquor stores that can be found in neighborhoods across Massachusetts. Forgetting, of course, that the real cost will be the Walmart-ization of our state’s wine, beer and spirit choices in the future. Meaning, of course, that it was cheaper for one side to pay a little money or political capital to the other in order to make this problem go away.
Here’s how it will hurt us and here’s how it will hurt you.
When a store decides to pick up a certain sku of wine, the price depends on how much of it they buy. One bottle costs more than a case, a case costs more than a palette, and so on. Let’s say The Urban Grape decides to buy a case of Kendall Jackson Chardonnay. Our price would be vastly different from Shaw’s, as they would be buying in bulk for all of their stores. We would have to compete on price, however, so it would be on our shelves for roughly the same price as theirs. But they will be making several times profit on it compared to very little profit for us. Multiply this by every wine over time and we will slowly go out of business.
How will this effect you? Wine buyers at supermarkets buy for the biggest common denominator. They also need wine that will sell itself so that they don’t have to staff the section and hand sell. Looking for that super-esoteric wine that you read about in the New York Times? Yeah, don’t bother. The supermarkets aren’t going to pick it up because they it won’t make sense to buy by the palette. They’ll buy recognizable brands and labels, and mostly likely will have nation-wide price deals for ones they buy in every state. Have you been to the food section at Target lately? Do you see a lot of cool, interesting food products there? Exactly my point. You could ask your cool local wine shop to get you that wine, but it won’t be in business any more. Even if it is still in business, the state’s distributors will have less reason to bring that wine into Massachusetts because they won’t have a lot of retail buyers for it…and down the drain it all goes.
Here’s the real kicker though and the piece of this deal that they are trying to frame in a super-positive light. The total number of liquor licenses available in the state will not increase! Hooray – this means that our children will not be surrounded by liquor stores! Not exactly. What this actually means is that when it comes time to buy a liquor license in Newton, or Cambridge or any other town where the licenses are all fulfilled, any license that becomes available will go to the highest bidder. Who do you think is going to win that bidding war? Hadley and TJ Douglas from Boston with their two kids and dwindling savings account, or Supervalu in California who owns chains of supermarkets in every region of the country? That means that new owner-operated stores will have a nearly impossible time getting a license and that established stores like UG, Central Bottle, Wine Bottega, Ball Square and all of the other stores that you love will be hard-pressed to expand their businesses.
So a back room deal between politically motivated associations was reached late last week, the story broken over the weekend, and the MA legislature voting “early this week” to ratify the new law. All of this done after months of being promised that a comprise would be reached through a ballot measure, not through a back room deal. All of this done expertly to keep us and more importantly, YOU, from having any sort of say. No ballot measure on this one, everybody. Let’s raise a glass of Yellowtail and cheers this short-sighted decision.