Groceries seeking ways around wine sales ban

Efforts draw pushback from liquor lobby, package stores

  • Melinda Goodman, left, buys beer from Tonya Williams, wine consultant at The Cellars, a liquor store in McHenry Row. Then she goes to Harris Teeter through the entryway from the liquor store (background) to do some grocery shopping. Goodman thinks the opening that joins the stores is "great, very convenient."
Melinda Goodman, left, buys beer from Tonya Williams, wine… (Algerina Perna/Baltimore…)
May 05, 2012|By Lorraine Mirabella and Jean Marbella, The Baltimore Sun

Unlike most other states, Maryland shoppers have to make one extra stop for a cabernet to go with that steak they bought on sale at the supermarket —grocery stores in the state generally are banned from selling alcohol.

Increasingly, though, grocery chains like Wegmans and Harris Teeter are trying to find ways around the prohibition, drawing pushback from Maryland's powerful liquor lobby and package goods stores but support from consumers hoping for easier food-and-wine pairings.

"This issue is clearly the next fight," said Adam Borden, president of Marylanders for Better Beer & Wine Laws, an advocacy group that fought successfully to get direct shipments of wine to Maryland residents. "It's clear that consumers are aching to be able to buy their groceries and a bottle of wine in the same place."

The battle is currently being fought in Columbia, where a new Wegmans plans to open in June. Developers envisioned a large liquor store, but that's unlikely, at least initially. After a heated, 4 1/2-hour hearing last week that was dominated by opponents, the Howard County Alcohol Beverage Hearing Board decided not to vote on the liquor license application but to re-convene on June 14, just three days before the store's grand opening.

Similar skirmishes have occurred recently, to different outcomes, in South Baltimore and Bowie. The new Harris Teeter on McHenry Row survived a challenge to The Cellar, the liquor store that's connected to it. But in Bowie, city officials tried unsuccessfully to get permission for alcohol sales at a vacant site in a shopping center in the hopes that it would help attract a Trader Joe's.

"It died in legislative session," Bowie Mayor G. Frederick Robinson said of the proposal. "I understand it's a bill not without controversy, but to me, it's an economic development issue. I've got a couple of shopping centers with vacant grocery stores that have moved on. When I talk to grocery stores, to a person, they tell me the modern business plan is, they want to sell beer and wine."

Under current law, liquor licenses cannot be issued to or used in conjunction with or on the premises of grocery store chains. Exceptions seem to abound, though, as do interpretations of those standards, with some grocery store licenses apparently "grandfathered" in and others allowed when the liquor business is owned by a separate entity.

Opponents say that allowing Wegmans to have a liquor store would lead to other grocery chains angling for one, and that would be the death of small, family-owned liquor stores. In arguments reminiscent of those used by mom-and-pop shops when Walmart and other big-box stores come to town, the merchants say they cannot compete with the prices and selection that the chains can offer.

"It would open the doors to the Giants and the Safeways and the Harris Teeters," said Bill Harrison, owner of the 27-year-old Kings Contrivance Liquor and Smoke shop in Columbia. "It opens up the whole bag of worms."

The independent liquor stores are backed by the Maryland State Licensed Beverage Association, a powerful group that remains formidable despite some recent losses — the state raised the alcohol tax after decades of it remaining unchanged, and now allows wineries to ship directly to consumers.

Wegmans has had to deal with bans on beer and wine sales in other states. In New York, it has rented space to liquor stores for decades at shopping centers it has developed and anchors. In New Jersey, it has subleased space to liquor stores owned by members of the Wegman family.

Each of the liquor stores Wegmans leases space to in New York and New Jersey is independently operated, a company spokeswoman said via email.

"Wegmans receives none of the profits from these stores," Jeanne Colleluori said. "However they do provide one-stop shopping to Wegmans' customers, which is our true goal with these types of arrangements."

That's the goal of the "Upstairs Spirits" shop, a 9,800-square-foot shop planned for a second-floor space in the building housing Wegmans off McGaw Road and Snowden River Parkway. While not part of Wegmans, shoppers would be able to walk through doors between them. But the proposal has drawn controversy partly because of the shop's ownership.

Ninety percent of Upstairs Spirits would be owned by Christopher O'Donnell, who is married to Colleen Wegman, president of the grocery chain. The other 10 percent would be held by a local partner, Mike Smith, an Ellicott City attorney who has handled labor issues for Wegmans in the past.

Opponents charge that such arrangements are a way of getting around the state law banning chains from holding licenses to sell alcohol. Harrison, the Kings Contrivance liquor store owner, echoed the views of other business owners who see Smith as "a frontman."

"Ninety percent of the money is coming indirectly from the husband of the owner of Wegmans," Harrison said. "They are trying to go around the law to get this liquor license."

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