Compromise means more grocery stores will sell beer

By Peter Schworm, Globe Staff

Industry groups have struck a compromise to allow more grocery stores to sell beer and wine, giving customers more options and averting a costly ballot measure fight.

Under the agreement, reached late this week, the statewide cap on the number of liquor licenses store chains can own would gradually increase so that they can sell alcohol at more locations.

The limit, now three per company, would climb to five next year, to seven in 2016, and nine in 2020. Permits would require local approval.

A revised bill reflecting the new agreement was voted out of committee on Thursday, and could come before the full Legislature as soon as next week.

After a bruising campaign over a 2006 ballot measure to allow more food stores to sell wine, supermarkets and liquor stores, along with beer and wine distributors, were reluctant to renew the battle.

“It was a real motivator,” said Jon Hurst, president of the state’s retailers association. “It‘s a good compromise. I give both sides a lot of credit.”

The 2006 ballot question was among the costliest in state history, with corporate interests spending more than $11.5 million spent to sway voters.

The measure, which was defeated 56 percent to 44 percent, would have allowed cities and towns to issue new licenses to grocery stores, and allowed them to hold an unlimited number.

The current legislation, however, works within the established quota system.

“It doesn’t change the overall number of licenses, just the number you can hold,” he said.

Massachusetts tightly regulates the sale of alcohol compared to most states. Nationally, the sale of wine and beer in grocery stores is common, and critics say Massachusetts’ laws are antiquated.

Supermarkets have pushed for the chance to expand alcohol sales, but have met stiff resistance from liquor stores worried about the increased competition.

The moderate increase, phased in over time, marked a middle ground.

“A lot of the small stores didn’t want to get overwhelmed,” said Chris Flynn, president of the Massachusetts Food Association, which represents the grocery industry.

A bill had been filed to allow grocery stores to hold 20 licenses, but was amended as part of the agreement reached by liquor stores, groceries, and distributors.

Flynn said the group would not move forward with its ballot questions if the legislation is enacted.

Last year, voters approved a repeal of the sales tax on alcoholic beverages by a 52-48 margin. Liquor store owners said the surcharge was causing them to lose customers to tax-free New Hampshire.

The raised cap on licenses would also give package stores more opportunity to grow, and increase the value of their current license should they decide to sell.

Critics have also raised concerns that teenagers will find it easier to buy alcohol from supermarkets than smaller liquor stores. Supporters say that with increased competition, customers will save money and enjoy increased convenience from one-stop shopping.

“We know it’s very popular where it’s offered,” Flynn said.

Peter Schworm can be reached at schworm@globe.com. Follow him on Twitter @globepete.