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A push for liquor sales in markets

Lawmakers might scrap limits on license ownership. Liquor-store operators warn of looming problems.

Would you like a bottle of chardonnay to go with that roast chicken in your grocery cart? How about a pinot noir for your salmon?

New Jersey lawmakers are considering proposals to allow wider sales of liquor in supermarkets, permitting chains such as Acme and Wegmans unfettered access to liquor licenses.

The legislative debate in Trenton pits consumer convenience against underage-drinking enforcement, and liquor-store owners against grocery operators.

The Assembly bill (A. 2892), sponsored by Assemblymen Louis Greenwald (D., Camden) and Thomas Giblin (D., Essex), would eliminate the existing limit on one person or corporation owning more than two retail liquor licenses.

That restriction, created in 1962, was designed to combat corruption, chain ownership, and out-of-state control.

State regulators and liquor-store owners say those concerns are still valid, while supermarket owners argue today's shoppers want to buy their wine and beer where they buy their food.

"It's an unfair trade restriction that bars us from participating in a business that we're very passionate about," said Otto Leuschel, vice president of Whole Foods' northeast region in Edgewater, N.J. Whole Foods has sponsored a petition drive in some of its stores, and Leuschel said customers had been "incredibly enthusiastic" in their support.

Forty-six states permit some beer, wine or liquor sales in grocery stores (only Pennsylvania, Delaware, Rhode Island and Alaska have outright prohibitions). New Jersey's restrictions on liquor licenses mean most supermarket chains have only two stores in the state that sell alcohol; some others franchise their store names to adjacent liquor stores.

Whole Foods, for instance, has nine stores in New Jersey, but sells alcohol only in its Middletown and Madison stores.

Across the state, there are 1,780 retail liquor licenses, according to the state Division of Alcoholic Beverage Control. The number of licenses is governed by population: a municipality may issue one retail license for every 7,500 residents.

Deana Lykins, a lobbyist for the New Jersey Food Council, said supermarkets are not interested in increasing the number of licenses in the state, just in having access to the ones that exist.

Liquor-store owners, though, fear the supermarket chains could eventually outbid them for licenses that can sell for as much as $500,000.

Fred Leighton, president of the New Jersey Liquor Store Alliance and owner of Bayway World of Liquor in Elizabeth, said broader access to liquor licenses could push locally owned liquor stores the way of local hardware stores or stationery stores that couldn't compete with "big box" retailers.

"A lot people say such is capitalism in America these days, but there are other issues, too," Leighton said. "Liquor should be sold in a liquor store. We don't sell cereal. We don't sell candy. If a 17-year-old is in a liquor store, a red flag goes up. The same thing can't hold true in a supermarket."

Committee hearings were held last week on a similar bill in the Senate (S. 1691), but no vote was taken to move the bill out of committee. No hearing has been scheduled on the Assembly bill, and it is not clear whether either bill will be considered before the end of the current legislative session on Jan. 8.

Supporters say they expect the legislation to be reintroduced early next year if no action is taken this session.

Jerry Fischer, director of the state Division of Alcoholic Beverage Control, said it would be harder to police sales to minors or intoxicated persons if supermarket sales were broadened, and he said state public policy could be "subordinated to the economic interests of out-of-state corporations."

And Fischer warned of supermarkets' driving local liquor stores out of business.

"This administration has always been concerned about small businesses," he said. "You want small businesses that have a tie-in to the community."

Supporters of the measure argue that not only would consumers benefit from one-stop shopping, but poor cities like Camden would be better able to attract supermarkets.

"Grocery stores can be disincentivized to enter inner cities because of increased costs for things such as security," Lykins told the Senate Economic Growth Committee. "The addition of liquor sales to their bottom line could be the thing to change the equation."

Greenwald, the sponsor of the Assembly bill, said his primary motivation was convenience for consumers. And he said supermarkets could increase employment, with good-paying union jobs that provide health benefits and pensions for workers.

"I know people fear change, but 90 percent of the country has this to some degree," Greenwald said. "Is there some level of compromise? I think we should try to find out."

In Pennsylvania, liquor control officials said they were unconcerned that broader supermarket sales in New Jersey could siphon off customers from their state.

"There are 10 Wine & Spirits stores in metropolitan Philadelphia groceries and one in a Monroe County grocery - which are all close to New Jersey - so we're taking away a lot of the incentive that comes from the one-stop shopping concept," said Pennsylvania Liquor Control Board spokesman Nick Hays. ". . . Once you factor in travel time, the price of gas and tolls, and the fact that it's illegal to bring alcohol into Pennsylvania that was purchased in another state, we don't see much of an impact at all."