Liquor retailers will be limited to two stores, according to a plan approved by Tennessee lawmakers that re-imposes ownership restrictions lifted just two years ago.
The state House of Representatives voted 72-16 Monday night to protect liquor store owners from competition with out-of-state chains preparing to move into Tennessee.
The ownership rule was part of a broader piece of legislation, House Bill 2586, meant to smooth the way for grocery stores to begin selling wine this summer.
Liquor store owners asked for the limit, making it clear they hoped to ward away competition from superstore retailers. Some lawmakers expressed qualms about interfering, but others, including state Rep. Bud Hulsey, R-Kingsport, say they deserve protection.
"I do understand this thing about limiting free enterprise," he said before Monday's vote. "But I think we owe it to these small folks who want this two-store limit."
The move represented a reversal for liquor retailers, which in 2014 approved of lifting a decades-old rule that let them own only one store. That was part of the wine-in-grocery stores law — the most dramatic rewriting of Tennessee's liquor laws in generations.
But since 2014, the courts have struck down another rule that said liquor store owners had to be residents of Tennessee. That opened the way for out-of-state competitors, including Total Wine, a liquor retailer with locations in 18 states.
Tennessee lawmakers say it'd be unfair to force small liquor store owners to deal with such sellers at the same time they're trying to adjust to grocery stores taking a share of wine sales. Especially since liquor retailers built their businesses under the old regulations, which determined where their businesses would be placed and what products they'd stock.
Many of those restrictions are no longer in effect. But Tennessee lawmakers say that unless some limits are placed, it's only a matter of time before chain stores completely dominate the liquor market in the state.
"We don't want to strip away their very livelihood and put them up against the big-box retailers who can literally open 100 liquor stores tomorrow if they wanted to," says state Rep. William Lamberth, R-Cottowntown. "I trust our small business owners. I trust our family-owned businesses better than I trust some big-box retailer financed out of China to come into our communities to sell this to our families and our neighbors."
The vote sends the measure on to Gov. Bill Haslam for approval.
The liquor store ownership rule won't be his only consideration. Much of the bill deals with a different matter — grocery stores' preparations to begin selling wine at long last on July 1.
Perhaps its most important provision is letting grocery stores order wine and stock it on their shelves before sales officially begin. Supporters say that unless the governor signs the measure quickly, there could be delays, and many grocery stores won't be able to offer wine on the day sales begin.
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