Booze, Convenience, and Consumer Choice

I’m generally not a big wine drinker, but somewhere along the way, I signed up for an e-mail distribution from a local wine store.  In the last few days, the store sent an e-mail to its distribution list urging  readers to read what appears on the TWSRA (Tennessee Wine & Spirits Retailers Association) web page and take action.  Specifically, we were being asked to contact state legislators to urge rejection of a bill that would allow wines to be sold in grocery stores and convenience stores in Tennessee; currently these are only sold in wine/liquor stores.  I found some of the claims very interesting. 

• “Hurts small businesses. All of Tennessee’s 525+ alcohol retail stores are small businesses owned by Tennessee residents.” 

As a small business owner, I like the concept of helping small businesses.  But not at the expense of customer choice and certainly not via a government mandate.  Wine/liquor stores can compete on any number of things including selection, staff expertise and recommendations, and potentially even price on certain items.  On convenience, they’ll likely lose with once-every-so-often drinkers like me.  But either they can compete and win on their value-adds, or they can’t.  Can it really be argued that consumers are benefiting by these small businesses if the store’s owners believe a government-protection approach is needed for them to stay in business?

• “Means fewer jobs. Tennessee’s alcohol retail stores employ more than 3,000 men and women who hold special permits from the state authorizing them to distribute alcohol. This legislation would jeopardize the jobs of these people, many who have devoted their careers to the responsible sale of alcohol. Those jobs would not be replaced by convenience and grocery stores which already employ staff to sell their array of goods.”

I like jobs.  It’s good when people are employed.  But the last sentence of that bullet is very telling… “[The lost jobs of wine/liquor store employees] would not be repleaced by convenience and grocery stores which already employ staff to sell their array of goods.”  I’ll attempt to put it differently: a given product could still be sold to the public with a lower cost of labor input.  So here’s the question: are the wine and liquor store employees adding value or not?  Any government mandate can create jobs.  Here’s one that we could try: we should outlaw self-service gas pumps because they take jobs away from gas station attendants.  Here’s another: all elevators should require an elevator operator.  Are these examples farfetched or do they parallel the case being made here for the wine/liquor store employees?  Creating or preserving jobs should not be an end unto itself for governments.  A job is only worthwhile to the degree it adds value in the marketplace.  If the wine/liquor store employees are adding value, then consumers will reward them with business. 

• “Sends profits to out-of-state businesses. This legislation would take business away from small Tennessee stores and turn it over to mega corporations like Wal-mart, Kroger and Publix, all headquartered out of state. “

It is interesting that the wine/liquor stores have so little confidence in their ability to competitively retain customers that they automatically assume their profits will take a hit.  I think they are right that it will, but imposing what amounts to a “convenience tariff” on consumers isn’t the right answer.  Incidentally, as far as out-of-state companies profiting, Publix, Kroger, and Wal-Mart are publicly traded companies, so Tennesseans investing in their stocks can profit by this too. 

• “Motive is money, not public interest. The grocery and convenience store industry says it’s backing this legislation to make life easier on Tennesseans. It doesn’t mention how much it stands to profit. At a time when the industry is feeling a financial pinch, it wants to use alcohol to push sales – at the cost of regulation and control.”

I admit, I actually laughed out loud when I read this bullet.  The fact that the wine/liquor stores, who have enjoyed decades of state-enforced non-competition from grocery stores, impugn the grocery stores for having money as their motive rather than public interest is actually hysterical.  Yeah, money’s the motive and it’s a pretty good one too.  I suspect money might have just a little bit to do with the TWSRA’s lobbying efforts too.

Here are a few final thoughts for my friends at the TWSRA: you just might find that there are benefits for you IF you are good at what you do.  Consumers like me might actually start buying wine more regularly if it is available at grocery stores.  We might find that sometimes we want/need recommendations from experts.  If you’re adding value to the equation, customers will still be drawn to you.  Or here’s another idea: since the convenience stores and groceries are entering your stronghold by selling wine, perhaps you could fight fire with fire and go into the unregulated grocery business and compete with them on their turf (that’s actually a joke).  Just do us all a favor and quit pretending that you are somehow holier-than-thou and your cause isn’t all about money too.  If you’re adding value, I’ll buy wine from you.  If not, I’ll get my wine when I’m already stopping for groceries, thank you.