Tuesday, September 18, 2012

Trader Joe's in Denver - go next door to get your wine

Trader Joes has now officially announced its Denver location and indicated that it will also operate a wine shop next door. The good news for Trader Joe’s junkies is that they will be able to get their Two-Buck Chuck (really Three-Buck Chuck, it is only $1.99 in California) without driving to New Mexico. The bad news is that they will have to go next door to get it.

Now, it may not seem terribly inconvenient to do your shopping in Trader Joe’s itself, put your purchases in the car and then go to the wine shop for you wine. It may not seem terribly inconvenient but it is pointless.

Colorado is one of only 15 states that prohibit the sale of wine in grocery stores. Wine can only be sold in licensed liquor stores and those stores are restricted to a single location. Interestingly, wine and liquor can be sold in stand-alone individually licensed drug stores – go figure.

Food and Wine Go Together

This makes no sense to me. Food and wine go together. We buy wine to enjoy with our meals, why shouldn’t we be able to buy wine where and when we purchase the food to prepare our meals?

I don’t know what kind of wine selection the new Trader Joe’s will have in its ‘next door’ location and how it will compare with its California and other stores in non-restrictive states but I do know what happens at Costco.

Costco is the largest wine retailer in the United States. And if you go to a Costco in a state that allows wine sales with groceries, you will find a consumer’s paradise in price and selection. I have written before about Costco’s Kirkland brand champagne I bought in Hawaii that was actually Vueve Clicquot. But in Colorado the ‘next door’ rule applies and any liquor or wine sales must occur in a separate entity with it separate entrance, separately licensed. I cannot get any Kirkland branded wines or liquor at my Costco.

Over the years attempts have been made to overturn this prohibition but they have been unsuccessful.

Why? Because those that benefit from the status quo don’t want a change and they continue to wield power at the legislature. This is another example of the few dictating to the many and the few benefiting at the expense of the many. Consumer choice and convenience as well as the consumer benefit of competition should win out, but so far it hasn’t.

Those opposed to change always argue that if grocery stores are allowed to sell wine it will drive traditional liquor stores out of business. That argument just doesn’t hold water, much less wine.

A nation-wide study by Stonebridge Research Group regarding the economic impact of allowing shoppers to purchase wine in food stores demonstrates that the actual impact on liquor stores is only about a 2.5% reduction in overall sales, hardly enough for wholesale bankruptcies.

Moreover, their analysis also shows that in states in which food stores and liquor stores both sell wine the liquor stores can and do successfully continue in business. The analysis also showed that in some of those states the number of liquor stores actually increased.

The study also concluded that if wine was allowed to be sold in food stores in states where it is currently restricted the total economic impact would $14.3 Billion with a net increase of 168,000 jobs. I don’t know what the impact specifically would be to Colorado as they did not break the numbers down, state by state.

Suffice to say, it is time repeal this remnant of the thirties. Let me buy my brie, bread and white wine, or my New York Strip steak, mushrooms, salad and Syrah at the same time in the same place.

No comments: