Senate approves bill to expand sales of grocery store wine, liquor store owners say they will lose millions of dollars

After more than a month of fierce debate that brought dozens of liquor store owners across the state to Little Rock, the Arkansas Senate on Wednesday quietly approved a controversial measure that will allow Wal-Mart and other grocery chains to sell a wider selection of wines.

Sen. Joyce Elliott, D-Little Rock, stood out as the lone voice to speak against Senate Bill 284 on the floor. The bill, sponsored by Sen. Bart Hester, R-Cave Springs, was passed over on the Senate calendar for several days as supporters and opponents camped around the Senate chamber to lobby votes.

In speaking against SB284, Elliott said the Legislature was building a brand-new business model that would help Wal-Mart and larger corporations and put smaller Arkansas businesses at risk.

“I just can’t sit there and knowing on balance that one side is going to be OK and the other is not,” Elliott said.

The Little Rock senator mentioned specific liquor stores owners in Central Arkansas who have put “thousands of dollars” of investment and retirement savings into their businesses, but lawmakers now have a distinct competitive disadvantage. According to estimates from There Performance Group, a Little Rock data analytics firms, the bill will cause more than 1,000 liquor store owners across the state to see annual revenue losses of more than $80 million and put more than 2,000 jobs at risk.

“I just think and I feel that all of us have an obligation to really be about the small business owners that we say are the backbone of our economy without breaking their backs,” Elliott said, adding that her district has more than 30 liquor stores.

After Elliott’s speech, the Senate approved the controversial measure by a vote of 18-14, with three members not voting. Of all the bills passed during the 91st General Assembly, SB284 has taken the most unusual route – needing approval twice from both chambers. It was first approved in the Senate a month ago by a vote of 18-11, with two members not voting and three present.

The original bill by Hester would have enabled grocery stores to obtain permits to sell wines of all types in local grocery stores. Grocery store chains operating in Arkansas, such as Walmart U.S., Kroger’s, Edwards Food Giant and Brookshire’s, now can only sell Arkansas and other small farm wines that produce less than 250,000 gallons of wine a year.

That earlier Senate bill also spelled out potential revenue the state would generate from increased wine sales. For example, a grocery store seeking a wine permit would pay $1,000 for building space of less than 35,001 square feet. Larger stores with space over 75,000 square feet would pay $5,000 for wine permits. That version also allowed fees from the wine permits to be equally divided between the “Arkansas Wine Grant” program and the Tourism Development Trust Fund, which would be designated to the Department of Parks and Tourism to promote the state’s wine industry.

Once the proposal got to the House Rules Committees, things went sideways. On Feb. 22, during a contentious two-hour meeting, a last-minute pact attached a six-page amendment with eight new provisions to the engrossed bill. Those new provisions included allowing liquor store owners to sell consumable and edible products that complement alcoholic beverages, giving incentives to Arkansas-bonded wineries operating in state more than five years, preventing dry counties from getting into the wine business, and adding language that grocery stores with a wine permit cannot derive more than 20% of their gross sales from the sale of alcoholic beverages.

Then on Feb. 27, one of the busiest days of the session, the bill fell two votes short of passing the House, 48-34, with 12 voting present and six not voting. During that floor debate, House Speaker Jeremy Gillam, R-Judsonia, took the rare step of speaking in support of the losing legislation as Rep. Greg Leding, D-Fayetteville, who voted no, served notice that he will move to reconsider the vote.

A few days later, after opponents of SB284 had celebrated victory, Leding kept his promise and brought the bill back to the House floor for a second time. The Fayetteville Democrat’s motion to reconsider the contentious legislation was approved by 48-34, with six members not voting and 12 present. Immediately afterward, the bill was approved by a vote of 53-34. Eight members did not participate and four voted present.

A week ago, it was re-referred back to the Senate State Agencies and Governmental Affairs Committee and came back to the Senate floor on March 2 with a “do pass” recommendation. After Wednesday’s vote, it is now headed to the governor’s desk, where it will be signed and enacted into law.