WIGS Passes Tennessee House 71 to 15

WIGS Passes Tennessee House 71 to 15

Looks like Tennesseans will be Krogering for wine starting summer of 2016. Wine in Grocery Stores, affectionately known as WIGS on Capital Hill, sailed through the Tennessee House this morning, February 20, 2014.  WIGS has already been approved by the state Senate.

1977 Styx mega-hit "Come Sail Away" is stuck in our heads:

I thought that they were angels, but to my surprise,
We climbed aboard their starship, we headed for the skies
Singing come sail away, come sail away, come sail away with me lads
Although there are some differences between the House and Senate version of WIGS, rumor has it that the Senate will adopt the House bill and WIGS will become law, once signed by the Governor.  Given the sweeping changes to the liquor laws in WIGS, the differences between the House and Senate bills are relatively minor.

Convenience stores and pharmacies are the big losers.  WIGS requires that 20 percent of the facility's gross sales be from food products, defined as items treated as food for state sales tax purposes.

We credit David McMahan, lobbyist for Tennessee retail liquor stores, for wining some major deal terms as the WIGS train barreled forward to passage.  WIGS is obviously a game changer for retail liquor stores, but McMahan scored a number of victories that will help liquor store owners adapt.

Our resident WIGS expert, Rob Pinson, lays out the differences between the two laws here.

• License fees: SB is $850; HB is $1,250

• HB allows grocery stores to enter into franchise or management agreements to sell wine on premises

• HB restricts ownership of a grocery store and a direct-shipper or non-resident seller in addition to SB restrictions

• HB explicitly states that certificates of compliance for grocery stores cannot be conditioned on residency within a city or county or contain other conditions not listed in state law (no distance restrictions?!?)

• HB allows deliveries of wine to grocery stores via common carrier or contract carrier in addition to company-owned trucks

• SB has provision regarding surplus license fees from grocery stores going into general fund with "surplus" defined as expenses attributable to such licenses form the prior year plus 20%

• HB authorizes ABC to enforce beer laws for retail package stores; SB does not expressly state this

• HB adds prohibition on under sales and intoxicated person sales for beer for liquor stores

• HB imposes quantity discount prohibition on grocery stores; SB imposes on all stores (liquor and grocery)

• HB expands areas eligible for liquor wholesalers to any county where either retail liquor stores or LBD have been approved (74 counties); SB only allows for counties with populations of or greater than 120,000 (11 counties)

• HB restriction on liquor stores within 1500 feet of existing stores only applies to new stores and clarifies it does not apply to purchase of existing stores or relocations of existing stores within the same jurisdiction

• HB 20% mandatory mark-up on wine does not apply to closeouts, case discounts and other occasional discounts as determined by the ABC, while SB does not contain these exceptions (but both bills except business liquidations and fiduciary or court-ordered sales)

• HB changes effective dates to make most provisions effective 7/1/14 except for:

o Referendum provisions – immediately!!

o Mandatory 20% mark-up – 7/1/16

• SB make everything effective immediately


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