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Wine: Where & Why
Connecticut package stores are family-owned and operated in the communities in which we live. It’s vitally important to support our local small businesses. When they do well – we all do well.
Connecticut is home to one of the best wine marketplaces in the country. We have strong pro-consumer laws that promote price transparency, and yield consistently low prices. The focus has always been customer service.
We’re glad you’re interested in learning more about wine sales in Connecticut, and the importance of keeping it exclusively available in package stores.
It’s no mystery why supermarkets want to get into the wine business – it’s the most profitable product in adult beverages. Wine sales yield double the earnings of beer and 50% more than liquor. Wine sales represent approximately 35% of an average package store’s annual sales. Make no mistake, the loss of exclusive wine sales will decimate the small, family-owned package stores in our neighborhoods.
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Why keep wine out of supermarkets?
Here is why you should care.
Wine customers in Connecticut will end up losing out in the long run if deep-pocketed grocery stores take over small family-run package stores’ core business by selling wine.
Loss of selection means you’ll have less wine to choose from...a lot less
- Thanks to Connecticut’s thriving wine marketplace, there are over 1,000 product buyers and decision makers across the state, each one trying to make their customers happy.
- Approximately 12 well-financed supermarket brands are pushing for wine in grocery stores, most of which are based out of state. Wine selections would no longer be made by what the community package store’s customers demand; wines would be stocked based on information provided to them from corporate wineries. Say good-bye to small family wineries.
- Supermarket wine selections would be limited to 20% of the average package store, yet it would be the highest volume wine products in the market place.
- Package stores would immediately lose 30% of their business with all of it coming from their most profitable product mix, Wine. Their ability to keep a healthy mix of big national brands & small family brands would be dramatically hurt, resulting in a reduced selection.
- A fitting example of this is Florida and it’s population of 21+ million residents. Connecticut has double (yes, 2 times) the amount of wine selections available than Florida, yet we’re just 16% of their population.
- Most wine sales are on bottles under $15, but it’s certainly not all wine sales. Gift bottles, special occasions and holidays celebrations are all reasons to splurge on something special. Supermarkets would offer a token number of labels over $25. That special bottle would certainly not be found next to a box of cereal or can of soup. Rather, it would be found at a package store – if there are still any in business if the deep pocketed, corporate-focused supermarkets get their wish and start selling wine.
Pricing: Over-priced wine anyone?
- Don’t be fooled by supermarkets’ argument that they’d sell the wines you know and love at a lower price. Based on other states’ experiences, supermarkets would fill their shelves with their own private label wines.
- Trustworthy name brands offer 20-30% profit to the retailer, which is more than enough for small family-owned package stores to survive on, but far from what a supermarket would demand. They’ll bait and switch consumers with private labels generating them 75%+ in profit. Meaning the $10 bottle you’re grabbing on the go – would have been a $4 bottle in the neighborhood package store.
Convenience: Where’s the Bourbon?
- Florida permits supermarkets and package stores to sell wine and beer. Thanks to the monopolistic power of their supermarkets, there’s an average of 1 store for every 12,000 people with approximately 1,800 stores in the state. In a short time, Connecticut would end up looking similar to Florida.
- Instead of 1,200 stores, Connecticut could end up with just 300 with most towns having just 1. So, getting your wine would be very convenient, but what about the Bourbon, Tequila, or Vodka?
Jobs: Losses and a lot of them
- It is estimated approximately 4,000 direct jobs are created by the 1200+ package stores in Connecticut. Depending on the store, they provide a range of positions from entry level to higher income, with a majority being upper middle incomes. These jobs support families.
- Given well-financed supermarkets’ drive toward robotics and automation, it’s hard to believe new supermarket jobs would be created if they were allowed to sell wine.
- While supermarkets claim they’ll add 196 direct new jobs, if half of the family-run package stores go out of business, a direct job loss of 1804 would result.
- Adjacent industries would feel the ripple effect of lost profits in package stores, including but not limited to distributors, suppliers, importers, commercial real estate, building trades and more.
Economic Impact: Serious contractions
- There is a considerable taxable investment into each Package Store for fixtures, fittings & equipment. Moreover, each store represents a tenant in a commercial real estate development or building. Wine sales in supermarkets presents a direct threat to the local and state revenue due to loss of taxes paid by package stores.
- Charitable giving will also suffer. Package stores are some of the very few businesses left representing Main Street. We are connected to the towns in which we live and operate We have a proven track record of giving back to communities who support us.
Service: Help yourself wine sales
- Make no mistake, the convenience of wine sales in supermarkets comes at a cost. They’re only looking to take advantage of the fact you’re already there and you brought your wallet. Special orders, food pairing suggestions, Specialized stock is the foundation of your local package store and none of this will exist in a supermarket.
- Supermarkets will take away 30% of package stores’ business when they start selling wine. The math here is easy ... lower profits for family-owned package stores will mean fewer jobs, leading to less service.
Encourage Entrepreneurship, Don’t Discourage It.
In the end, Wine in Supermarkets means a big LOSS for Connecticut Wine Customers & the communities they live in.
WINE: WHERE & WHY...A CLOSER LOOK
FREQUENTLY ASKED QUESTIONS
Why are grocery stores only allowed to sell beer and not wine or spirits?
- After the end of prohibition, states were given the authority by the 21st Amendment to the U.S. Constitution to decide for themselves all matters related to the sale and distribution of alcoholic beverages within its borders. Connecticut law treats beer differently than wine and spirits in a variety of ways. One difference is where they can be sold. Since beer typically has a much lower alcohol content than wine or spirits, it can be sold in grocery stores. Wine and spirits, because of their higher alcohol content, are required to be sold in a much more controlled and safe venue than alongside everyday food and produce.
Wouldn’t allowing wine to be sold in grocery stores be more convenient for the Connecticut consumer?
- Not really. As the COVID-19 pandemic experience has shown us, Connecticut enjoys a plentiful, diverse and strong alcohol beverage delivery system. You rarely hear anyone complain they have trouble getting their beer, wine or spirits. Connecticut has over 1,200 mostly small, family-owned, package stores throughout the state. That’s approximately 1 store for every 2,500 people. In addition, many, if not most of these stores, offer curbside and/or delivery services, either by their own employees or a third party. It has never been easier to have the beer, wine or spirits of your choice delivered to your door.
With all those package stores, what’s wrong with a few more stores selling wine?
- A lot! Data from other states shows that allowing big, mega, out-of-state owned, supermarkets to sell wine has a direct negative effect on those small, local, family-owned, package stores, forcing many—especially those near a supermarket—to close. This means eroding jobs and lost business. In fact, beginning in 2016, a change in Tennessee, that permitted wine to be sold in supermarkets, reduced package store sales by 8.6 percent across all products during a 12 month period. That’s an $88 million loss to local, family owned package stores.
- Data from other states also shows that NO MORE WINE IS GETTING SOLD—it’s just the same amount of wine sold at a different place. This means NO increased revenue to the state—only extra profit to the supermarket chains at the expense of family-owned package stores.
Some Connecticut wineries are supportive of wine being sold in grocery stores. Won’t it help them if wine is allowed to be sold in supermarkets?
- Absolutely NOT! The bill the legislature could pass can’t require any store to carry or make available Connecticut wines. Supermarkets sell thousands of products. The shelf space they can devote to the sale of wine, like beer, will be limited. Experience tells us that with limited space, supermarkets will only sell a limited number of national brands. They cannot—and will not—offer the variety of products provided by our family-owned package stores and most probably will not be selling Connecticut made wines. The brands that supermarkets are most likely to sell are the best-selling, popular national brands that they know will move off the shelves.
- It is the small, family-owned, local package stores—if they can remain in business—that will continue to sell Connecticut products including beer, mead, cider, wine and spirits made from Connecticut wineries, breweries and distilleries. Without a vibrant package store industry, Connecticut products will have few if any venues to sell their products.
- Further , data from the Tennessee experience shows that wine being sold in supermarkets is causing less foot traffic in package stores and decreasing spirit sales. Lost spirit sales means lost tax revenue. The decrease in spirit sales in Tennessee resulted in a drop of an estimated $3.0 to $3.6 million in revenue from tax collection.
Wouldn’t allowing supermarkets to sell wine expand the variety of products available?
- Quite the contrary. Currently, because of Connecticut’s unique network of over 1,200 package stores, the variety of wine and spirits products exceeds 50,000 individual products and sizes. As for wine alone, some of our larger package stores in Connecticut will carry up to 10,000 varieties. The average Connecticut store carries about 3,000 wine varieties. Compare that to a state like Florida—which is 5 times the size and population of Connecticut and allows wine to be sold in supermarkets. Florida’s total wine and spirits variety is less than 25,000 products and their wine selection is somewhere between 500 and 1,500 wine varieties that are primarily just the most popular national brands.
- Experience tells us that allowing wine in supermarkets will assuredly result in the closure of many small, family-owned package stores. This will constrict the venues selling the vast variety that is currently available for the Connecticut consumer, and the Connecticut wine market will suffer.
Didn’t package stores do very well financially during the pandemic?
- Package stores did realize an increase in business during the pandemic. The increase in sales was temporary and declined when we began to return to normal and restaurants began to re-open. The supermarket sector also recognized a huge increase in business throughout the pandemic. The difference is that the profits realized by small family-owned package stores stays local. The profits realized by large, national supermarket chains are mostly spent outside of Connecticut.
Is allowing wine to be sold in supermarkets a fair and equitable policy to the package stores?
- Absolutely not! Supermarkets, by definition, are allowed to sell thousands of products from produce, meat, fish and canned goods to prepared food, beer, etc. Package stores are only allowed to sell mainly wine, beer and spirits. Allowing the large national supermarket companies to sell what is already sold in package stores (wine) would add yet another profit center to their business while severely eroding one of the few profit centers allowed to Connecticut’s package stores.
- Package stores survive by the incidental and impulse purchase of other products while customers purchase wine. Take away the foot traffic into the package store and you jeopardize their entire business and survival.
Is there any concern that the sale of alcohol to minors could increase if wine was allowed to be sold in supermarkets?
- That is certainly a possibility. Package stores are regulated environments where the proprietors and employees (all over the age of 21) are trained to spot under-age or intoxicated consumers. This same level of scrutiny is not present in a supermarket where many of the cashiers are under age 21. Some are as young as 16 years old and not trained nor mature enough to confront an underage or intoxicated purchaser of alcoholic beverages. There’s even less supervision in the supermarket self-check-out lanes. In fact, one study conducted by UCLA found that about 20 % of self-checkout alcohol purchases were able to bypass the required ID check.
Conclusion
Connecticut enjoys a convenient, vibrant, diverse, efficient and safe alcohol beverage system. Experience shows that shifting wine sales to supermarkets will NOT increase wine sales or revenue to the state, but it WILL:
- Siphon customers, sales, business and jobs away from Connecticut’s 1,200 small, family-owned local businesses in favor of big, mega, out-of-state owned supermarket chains.
- Favor popular, national wine brands over Connecticut-grown wines.
- Erode consumer choice, family-owned local businesses, jobs and public safety.