The Tennessee Attorney General issued an opinion today, May 10, 2016, declaring that retail liquor stores are not bound by the no credit rule for food stores. A copy of the opinion is here.
The industry has been abuzz about a rumor, which we attribute to the wholesalers, that the no credit rule for groceries in WIGS eliminated the long-standing 10 day credit rule for liquor stores.
The 10 day credit rule allows retailers to purchase booze on credit and pay within 10 days of the date of purchase. WIGS requires that food stores pay when wine is delivered. Because the law requires that the same purchase terms be offered to retailers, folks were concerned that the 10 day credit rule was DOA.
As we read it, the opinion applies to both wine and spirits. We see the Attorney General opinion as being the final nail in the coffin on this issue.
Reminds us of the classic Travis Tritt tune “Lord Have Mercy On The Working Man”
Won’t you tell me if you can
‘Cause life’s so hard to understand
Why’s the rich man busy dancing
While the poor man pays the band
Oh, they’re billing me for killing me
Lord, have mercy on the working man.
WIGS has stirred up tons of gossip in the industry. We applaud the Attorney General for swiftly and clearly acting on this issue.
At the Tennessee Alcoholic Beverage Commission meeting today, April 26, 2016, the ABC adopted a seemingly simple rule that will significantly speed up approval of applications for wine in grocery stores (WIGS).
ABC Chair Mary McDaniel cited projections that some 3,103 applications for WIGS were expected to be filed by July 1, 2016. Given the volume of applications, the ABC delegated authority to the ABC Director to do the following:
- conditionally approve licenses
- issue letters of approval to order and stock wine
- issue licenses on or after July 1
Huge numbers of food store applicants for wine were looking at ABC filing deadlines that made it impossible for having wine on the shelves by D Day: July 1, 2016.
Allowing ABC staff to approve applications eliminates the filing deadlines. Suddenly, we see hope that grocers pursuing WIGS licenses will be able to have wine by July 1.
Perhaps a little too optimistic, but we hear the Stones refrain:
Time is on my side, yes it is
The ABC order is effective today through July 1, 2016. Conditionally approved applications will be listed on ABC agendas regularly posted in advance of monthly ABC meetings.
Moments ago, the Senate concurred in a House bill that removes the 500 foot distance requirement between a food store and a liquor store that is not exercising the privilege of selling beer and other items.
We blogged about SB0844, which is a liquor Christmas tree, in legislative parlance. For those that do not regularly haunt the halls of Legislative Plaza, SB0844 has 6 mostly unrelated sections that each revised a specific section of the liquor laws, which is known as a Christmas tree.
Section 6 of SB0844 galvanized the attention of a handful of retail liquor store owners and a few grocers. These liquor store owners did not stock beer, chips, mixers and wine glasses – with the specific goal of preventing a food store located within 500 feet from selling wine until July 1, 2017. Johnson City’s News 11 recently covered the story.
All for naught.
A senate amendment that would have eliminated section 6, having the effect of keeping the 500 foot rule in place, was soundly defeated on the Senate floor, 9-19. The bill heads to the Governor and should become law just in the nick of time for places like the Green Hills Kroger and Trader Joe’s. We see Four Buck Chuck headed to Hillsboro Pike.
We send a very special Hank Williams shout out to our friends that own Grace’s Plaza Wine & Spirits, Bud’s Liquors and Wine and other retail store owners on the losing end of SB0844:
There’s a tear in my beer
’cause I’m cryin’ for you, dear
you are on my lonely mind.
We are of the school of thought that most of the time, one asks for forgiveness and not permission. Hence this post.
We are pleased to announce that liquor lawyer Will Cheek and Top Shelf principal Kim Pouncey have partnered to prepare a designated manager training program called WIGSmanager.com. The live and on-line program will join Top Shelf’s curriculum starting in May.
Our website is still a work in progress.
The WIGSmanager training schedule is here. Designated Manager Class Flyer May 2016.
Top Shelf will arrange for combined manager and responsible vendor training classes for $150. Private classes are available with a ten manger minimum.
Email Michelle at email@example.com to reserve a space or schedule a class.
Online training will available for managers to complete beginning May 23. Inquire about pricing to firstname.lastname@example.org
Our shameless self-promotion conjures up the dreaded Barbie Girl song:
I’m a Barbie girl, in a Barbie world
Life in plastic, it’s fantastic
You can brush my hair, undress me everywhere
Imagination, life is your creation
Come on Barbie, let’s go party!
We consider Top Shelf to be the premier alcoholic beverage training program in Tennessee. Visit Top Shelf here.
Our in box has blown up with e-mails about cumulative discounts and ending the 10 day credit rule for wine sold to retail liquor stores. “Say it ain’t so” seems to be the prevalent sentiment in the industry.
Attached is a letter sent by legal counsel to the wholesalers, our former law partner Hank Hildebrand. WSWT Opinion Letter
Cumulative discounts is a common practice in the retail liquor store business. For example, a wholesaler sells a 100 case discount of George Dickel to a retailer, but the retailer pays for and receives the whisky in 20 case increments over 5 weeks.
Retailers will still be able to receive 100 case discounts, but all of the hooch must be delivered and paid for at the same time. According to the wholesalers, this applies to both wine and spirits.
And speaking of paid for, retailers are going to say goodbye to the 10 day credit rule for wine. The wholesalers say that credit can still be extended for spirits and high gravity beer.
The timing for termination of cumulative discounts and the 10 day credit rule is up for discussion. Once wholesaler has indicated that it will stop offering discounts and credit on May 1, which is roughly when the first WIGS letters of approval are expected to be issued by the ABC to food stores.
Kid Rock’s “Good Times, Cheap Wine” seems appropriate:
I like some good times, cheap wine, back beat rock and roll
I’m like fine wine, sunshine, baby I never get old
If you’re lookin’ for a hot mess, honey well here I am
Hey you can try to change me or love me just the way I am
Tennessee Governor Bill Hallam signed SB2094 into law this week. The controversial bill fixed a technical issue with wine in grocery stores, which we affectionately call WIGS, but also capped ownership of retail liquor stores to 2 stores.
The legislation is now law.
We have already heard some grumbling about the two store limit from a couple of local liquor store owners. We hear that one owner has invested quite a bit in two stores set to open soon, but the ABC refused to put the applications on the ABC agenda because of the two store cap. We expect that other local owners will lament the cap and encourage folks to contact us if you are impacted.
Retail liquor store owners are also following SB0844, which included a provision that removed the 500 foot distance requirement between grocers and retail liquor stores that did not elect to sell beer and other items. An amendment passed this week in the House deleted the section, which has the effect of reimposing the 500 foot restriction.
Although only applicable to a few stores, the 500 foot restriction was an important part of the WIGS compromise. We are watching this with considerable interest.
Bruno Mars tune “Liquor Store Blues” seems timely:
‘Cause my job got me going nowhere,
So I ain’t got a thing to lose.
Take me to a place where I don’t care,
This is me and my liquor store blues.
We have been licensing restaurants, bars, hotels and venues in Tennessee for nearly 25 years. Call us old, but we appreciate predictability.
For years, the ABC has required that landlords with percent rent of 5% or more in leases do limited disclosure in connection with new ABC applications. Until last week, that meant filing a simple ABC questionnaire from the landlord entity.
Last week, we learned that the ABC is now requiring personal questionnaires from the officers of landlords that have percent rent over 5%. This is a huge change.
In our experience, landlords do not like to have anything to do with liquor licenses. The entity questionnaire often met with resistance.
Filing personal disclosures on landlord officers is a much more intrusive requirement. We see this as being unworkable for many landlords.
The solution is to reduce percent rent to 4.99%. But that obviously means giving up money.
We love the classic Dire Straits tune:
Now look at them yo-yo’s that’s the way you do it
You play the guitar on the M.T.V.
That ain’t workin’ that’s the way you do it
Money for nothin’ and your chicks for free.
Anyone working on applications for wine in food stores, which we affectionately call WIGS, understands the difficulties of implementing a completely new licensing system like WIGS.
We sympathize with limited ABC staff as they devise new procedures and forms. Government is not known for innovation, but innovation is exactly what is needed to put wine in food stores by July 1.
The WIGS application process has us humming “Wine Me Up” by Faron Young:
The legislature has passed a new law that clears up a problem in WIGS with landlords. WIGS required that applicants supply an affidavit from their landlord that was, in many instances, contrary to standard commercial leases. We found that most of our shopping center landlords would not sign the affidavit, which was mandatory for a WIGS license.
Much to our pleasure, the ABC has issued a short form that satisfies the requirement. You can download the form here. The change in the law and the new ABC form will simplify the WIGS application process.
The ABC has also posted information about Designated Managers at this link. Although the application and required training for Designated Managers is still pending, we also see this as real progress.
Stay tuned for more developments about WIGS.
Days before Tennessee ABC Director Keith Bell resigned, Assistant Director Ginna Winfree decided to join Nashville law firm Gullett Sanford Robinson & Martin. As far as we can tell, Mr. Bell’s resignation has no connection with Ms. Winfree’s decision to move to the private sector.
Gullett Sanford is home to our friend and alcoholic beverage lobbyist extraordinaire Matt Scanlan, whose bio is here. We expect that Ms. Winfree, an attorney, will assist with liquor licensing and possibly lobbying.
In the wake of Mr. Bell’s untimely departure from the ABC, Ms. Winfree has agreed to serve as interim director for a few weeks. We speculate that Ms. Winfree will stay through the end of April.
We wish Ms. Winfree well as she transitions back to private practice. Donna Summer has some sage advice:
So hard for it, honey.
She works hard for the money.
So you better treat her right.
We will continue to update the news concerning the ABC Director as it breaks.
The Tennessean has more information: TABC
6:31 a.m. 3/25/16. We hear from a reliable source that “Ginna Winfree will serve as the interim director until they find a replacement but she is not interested in serving as the new director.”
Original post 9:13 pm, 3/24/16.
TABC Director Keith Bell resigned today, March 24, 2016. Here is the text of the e-mail sent by Director Bell to key legislators and industry insiders:
To Everyone: Please accept this as my resignation as your Executive Director effective immediately. I have enjoyed my time with each of you and appreciate all your hard work. Keep up the good jobs y’all are doing and thank you. Sincerely, E. Keith Bell.
We wish the Director all the best in his next endeavors. Although we were sometimes summoned to the Director’s office for our differences in construing liquor laws, Director Bell made numerous advances for the alcoholic beverage industry in Tennessee. Our personal favorite is the hiring of SAC Melvin Brown, one of the best law enforcement professionals in the Volunteer state.
The Director, being a tee-totaler, makes AC/DC particularly appropriate:
We gonna make a big noise
So don’t worry ’bout tomorrow
Take it today
Forget about the cheque we’ll get hell to pay
Have a drink on me
Yeah have a drink on me
Yeah have a drink on me
Have a drink on me
We will update as news becomes available.