On March 20, when Governor Bill Haslam signed H610 into law, Tennessee became the first state to expand the sale of wine into food stores since Iowa privatized wine sales in the mid-1980’s. Before any changes can take place, local cities and/or counties that are located in areas that are already “wet” for either on- or off-premise alcohol sales must hold a voter referendum to approve food store sales. Wine Institute expects to see the first of these elections to take place in November of 2014. If approved by the voters, the earliest time at which a food store could begin selling wine is July 1, 2016. The new law has a host of requirements that will govern the new sales channel, but some of the highlights of the law include:
• Stores must be at least 1,200 square feet and must continue to derive at least 20% of its sales from food and food ingredients (not prepared food).
• Stores must be located in a “wet” jurisdiction and be approved by referendum.
• Although a licensee may have more than one food store license, they must make purchases individually for each location and not do any centralized warehousing.
• No wine tastings will be permitted on the food store licensee premise.
Package store operators also gained new privileges as a result of the new law, which include:
• Stores may now sell beer and other retail items related to or incidental to the use, consumption, dispensing, or storage of alcoholic beverages, along with merchandise related to special events and parties.
• Stores must maintain at least 65% of their revenue from the sale of alcoholic beverages to maintain their package store license.
• The prohibition on one person holding more than one package store license has been removed.
Wine Institute will be monitoring the local elections as they occur in order to keep members informed as to where and when food store sales will be legalized.