While opponents of a proposed law to allow New Jersey supermarkets to sell alcohol claim it would negatively impact the state’s liquor retail industry, a new study shows that such a law would benefit the economy and create more jobs.
According to an independent study commissioned by the Food Marketing Institute in Arlington, Va. in November and released today, similar reforms were adopted in Massachusetts. New laws passed in 2012 allowed supermarkets in that state to have more liquor licenses for the convenience of shoppers, with no detriment to liquor stores, the report concluded.
“The owners of liquor store chains in New Jersey are fighting to maintain a monopoly they have enjoyed since the current liquor laws went into effect in 1962,” said AJ Sabath, executive director of the Retailers for Responsible Liquor Licensing coalition. “This study reaffirms what we’ve all known for a very long time: Supermarkets can sell liquor without negatively impacting liquor stores.”
The coalition is urging state lawmakers to adopt Assembly Bill 2002, which would allow New Jersey supermarkets to gradually increase the number of liquor licenses they hold in the state to 10. Currently, supermarkets can only have two liquor licenses in New Jersey – no matter how many stores they are operating.
Debate swirls as New Jersey debates following the lead of other states in liberalizing its liquor laws. The question: will liquor sales in supermarkets hurt mom-and-pop bottle shops?
Massachusetts, which had similarly restrictive retail alcohol sales laws, adopted legislation similar to what is being proposed in New Jersey. Starting in January of 2012, the number of off-premise licenses allowed per each business went from three to five in Massachusetts. In 2016, each business will be allowed to hold seven licenses, and in 2020, a maximum of nine.
As the new law takes effect, the study learned it has already had a positive impact in Massachusetts’ business climate. To date, the state is reporting $16.9 million in additional economic activity, as well as 150 new jobs.
In addition, the change in law has not prompted liquor monopolies to spread, as some opponents argue would occur in New Jersey. There is no evidence that smaller retailers are being “overrun” by supermarket chains, the report states.
Businesses holding more than three liquor licenses are a small subset of the businesses in Massachusetts, which still has a plentiful supply of mom-and-pop stores. The study found that only 7.6 percent of the licenses are held by businesses with more than three licenses.
Roughly half of those licenses are from family businesses and franchises that pre-existed the law – further underscoring how the current liquor stores in New Jersey would not be threatened if the state allowed more supermarkets to sell spirits.
According to the study: “Smaller retailers are not being overrun by supermarkets and other large retailers. In the entire Commonwealth of Massachusetts, an average of 13 licenses per year have either been transferred or granted to entities already holding at least three licenses. That represents less than 0.5 percent of licenses granted each year. The geographic spread of these licenses was wide - just four communities had more than one license-holder that also held more than three licenses statewide.”
Massachusetts’ reforms are not new or progressive; the state is simply updating its laws to mesh with other states. Sabath said there are at least 45 states that permit beer to be sold in supermarkets, while 33 states allow both wine and beer to be sold. Other states have no regulations on beer, wine or spirits sold at food retailers.
Meanwhile, New Jerseyans have expressed a strong desire to allow more supermarkets to sell wine, beer and spirits. The Monmouth University Polling Institute found that among regular purchasers, 76 percent would like to see supermarkets sell alcohol.
According to the poll: “Those in favor of allowing supermarket alcohol sales mention convenience (50%) as the most important argument. This is followed by the notion that “other states do it” (15%) and the feeling that there is just no good reason for limiting the sale of alcohol to liquor stores (14%).”
Assembly Majority Leader Lou Greenwald (D-Camden) explained his legislation, A-2002, would update New Jersey’s liquor licensing laws, create jobs and stimulate the local economy. “It is time for New Jersey to do away with its vintage collection of laws and embrace modern solutions. In doing so, we will join a majority of states that have adopted a new approach,” he said.
Greenwald, as well as other supporters in the Assembly, are pushing for the legislation during the current “lame duck” session of the state Legislature, with the hope that Gov. Chris Christie signs the law next month.