Push resumes to sell wine in grocery stores

For the past several years, grocery store owners have lobbied state lawmakers to let them line some shelves with wine. The Minnesota Grocers Association has launched a massive public relations campaign aimed at shoppers. Stores have prominent displays and are even printing their campaign slogan "wine with dinner" on grocery bags.

The renewed push follows a state study that found Minnesotans pay more for wine. At this point, grocers are only pushing to sell wine, not beer or liquor.

"We're hearing convenience is an issue, so this offers them that convenience to be able to pick up their item as they're getting their dinner items," according to Jamie Pfuhl, with the Minnesota Grocers Association. She says 33 other states allow grocery stores to sell wine. "More and more, one-stop shopping is becoming more and more important."

Diane Henning of St. Paul says she'd like that convenience. As she wheeled her cart through the frozen-food section of Kowalski's Market in St. Paul, she noted she can buy soft drinks at the store, but not wine.

"I'm actually quite used to shopping for wine in grocery stores," she said. "For instance, when I go to Phoenix, I mean everything is there so it's a one-stop shot. It saves gas and saves time."

Others, like Russ Peterson of Fridley, say they don't care if the law is changed. In most instances, Peterson says he would continue to buy his wine at larger, upscale wine stores in the Twin Cities.

"I sit in a groove and I like that kind of thing where I go down to the major place, especially when they have their sales. It would be nice, though, at a place like this, where you come in and looking for something special, to be able to pick up a bottle of this or that. It would be a nice convenient thing," he said.

But that prospect worries some liquor store owners.

"What goes through my mind is my retirement going down the drain," said Bill Cross, who owns Network Liquors in Roseville.

Cross bought his store in 2003 and says he's still trying to make the store profitable. In 2004, Cross says his sales dropped 25 percent when Cub Foods opened a stand-alone liquor store next to the Shoreview grocery store. He says his business would be in even worse shape if grocery stores could sell wine. He says there are two Cub Foods and two Super Targets within driving distance of his store, not to mention the other 11 liquor stores in the area.

"If the grocery stores have wine and they put the margins on the wine like they do their food, will I be able sell? Where will my wine sales go? That probably is somewhere in the neighborhood of 45 percent my business is wine. If I lose that, I will need to raise the prices on my beer and my liquor," he said.

Cities that own municipal liquor stores are also worried that their revenues could drop. Paul Kaspszak, with the Minnesota Municipal Beverage Association, says municipal liquor stores generated combined profits of $20 million for 220 cities last year. He says any drop in sales means less money for roads, parks and general city services.

Kaspszak also worries that grocery stores won't just stop at wine sales.

"They may be sincere in saying they only want wine today but if a legislator or another proposal comes through and says, 'let's allow them to sell strong beer, let's allow them sell spirits,' they're not going to be out front saying 'No, no no. We don't want that.' To them it's all about money," said Kaspszak.

Grocery store owners say they would oppose any efforts to go beyond selling wine in their stores. The grocers also point to a report by the Legislative Auditor that says wine prices are 5 to 7 percent higher in Minnesota than in Wisconsin, which allows wine, beer and liquor to be sold in grocery stores.

Mary Kowalski, who owns Kowalski's Grocery Stores, says allowing wine in grocery stores will drive down prices and improve competition. She doesn't buy the argument that liquor stores would close if the law was changed.

"We, as a small market grocery store, have lots of competition," Kowalski said. "When the Wal-Marts moved and all of the Targets started selling groceries and all of that... You just have to do your business well and you'll survive. Thirty-three other states have this and it hasn't proven to be true in those states: that they have shut down small liquor stores."

While grocery store owners hope that they can get their bill passed this year, it isn't guaranteed. Gov. Pawlenty indicated during his campaign for governor that he would oppose the change.

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