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Should more grocery stores be allowed to sell alcohol?

Chains are pushing for a November intiative to loosen controls on wine, saying consumers would benefit from lower prices as a result. But a comparison of package stores and markets already selling it shows that bigger isn't always cheaper.

The big supermarket chains don't seem to be as price-competitive on wine as their campaign literature would lead you to believe.

As they push for a November ballot initiative that would allow them to obtain more licenses to sell wine, the chains are saying package stores don't have enough competition and, as a result, consumers are paying too much for their chardonnay or merlot. Give us more licenses, the supermarkets say, and prices will drop 5 to 7 percent.

But a spot check of prices at several supermarkets that currently have liquor licenses indicate the big chains don't compete that aggressively with nearby package stores. Large package stores often beat the supermarket prices by anywhere from $1 to $5 a bottle. Smaller package stores were far less competitive, but still managed to match the prices of nearby supermarkets on some products.

``This isn't going to be about pricing," said Al Israel , the owner of a Macy's Liquors store in Weymouth, which is just down the street from a Stop & Shop with a full liquor license. ``You're going to find our prices are lower than Stop & Shop's, or at least as low. ``

The pricing data, while limited in scope, casts doubt on a central claim of the supermarket chains as they push for a referendum that, if passed, would allow municipalities to award at least five new wine-at-food-store licenses and possibly many more, depending on the community's population. Under the existing law, which dates to 1934, an individual or a company is allowed to have only three retail licenses to sell alcoholic beverages in Massachusetts.

Stop & Shop and Shaw's are the two biggest backers of the wine referendum, contributing 55 percent of the $2.8 million raised so far.

A report done for the supermarkets last month indicated that package stores control 85 percent of the state's off-premises wine sales and charge higher markups on wine than any other product, as much as 41 percent at large package stores.

``If the stores were exposed to additional competition, package stores would lose their market power, which would force them to lower prices and improve service and selection to maintain customers," said the report, prepared by a Westford consulting firm, the Northbridge Group.

Extrapolating from price survey data from Minnesota and econometric and simulation modeling from New York, Northbridge estimated passage of the referendum would yield consumer savings of 5 to 7 percent off the $515 million in off-premises wine sales last year.

But it's always helpful to look at some actual prices on the shelf before reaching any conclusions. The Globe selected a handful of popular wines and compared the prices charged at two Stop & Shops and two Shaw's/Stars with those at nearby package stores. We also looked at other alcoholic beverages, including beer, because opponents of the referendum think wine is only a starting point.

Macy's in Weymouth was hands-down cheaper than the nearby Stop & Shop. A bottle of Kendall-Jackson chardonnay at Stop & Shop cost $13, but $10 at Macy's. A 1.5 liter bottle of CK Mondavi merlot was $4 less at Macy's. Veuve Clicquot champagne was $7 less at the package store.

In Quincy, Wollaston Wine & Spirits on Beale Street was very competitive with the Stop & Shop on Newport Avenue. Wollaston charged $3 less than Stop & Shop for the Kendall-Jackson chardonnay, $6 less for the Veuve Clicquot champagne, and $1 less for the CK Mondavi merlot. A Turning Leaf merlot was 50 cents cheaper at Stop & Shop; a Blackstone cabernet sauvignon was $1 less.

Faith Weiner , a spokeswoman for Stop & Shop, declined to discuss the company's alcohol pricing. ``We don't disclose pricing strategies, but our goal is to be competitive in each market we serve," she said. ``There is room for more competition, and Question 1 gives voters the opportunity to decide."

Price comparisons were more difficult for the Shaw's at the Prudential Center in the Back Bay and the Star on Mt. Auburn street in Watertown. Nearby package stores tended to be much smaller and often didn't carry the same wines as the supermarkets. When they did, the supermarkets tended to have better prices, but not always.

The Watertown Star was charging $9 for a Blackstone merlot, which cost $10 at the nearby McHugh's Wine & Spirits. The Star was also charging $2 less a bottle for a Columbia Crest cabernet sauvignon and $5 less for a Rosemont Estate Diamond Label cabernet sauvignon. McHugh's was $2 cheaper for the Kendall-Jackson chardonnay.

The Shaw's at Prudential had very little local liquor competition. The tiny Wine Emporium on Columbus Avenue carried very few of the wines I had priced at Shaw's, but there was some overlap. A 1.5-liter bottle of Yellow Tail chardonnay was $14 at the Wine Emporium, $2 above what Shaw's was charging. A Blackstone cabernet sauvignon, however, was $1 less at the Wine Emporium.

Unlike Stop & Shop and Shaw's, some food stores compete very aggressively on alcohol prices.

Costco Wholesale Club, which charges an annual membership fee to its shoppers, offers very low prices on alcohol at stores where it has a license. At the Costco in Avon, the price of Clicquot Champagne was $36 a bottle, the Kendall-Jackson chardonnay was $9 a bottle, and a Blackstone merlot $8. To date, Costco has not joined the supermarkets in pushing for the referendum.

Kevin Dietly , a principal at the Northbridge Group, said the point of his study was not that individual supermarkets would have the lowest prices around if the referendum passed, but that greater competition from all food stores would end up reducing the hefty profit margins of package stores.

``There's a bubble here that, if it was burst, would bring prices down," Dietly said. ``For the supermarkets, it's really all about being more of a one-stop shop for people. That's why they have banks, dry cleaners, and doughnut shops inside their stores."

The prospect of supermarkets adding wine to their shelves scares package stores more than the price competition they would face if the referendum passes.

``We do compete with them on price, but we can't compete with the convenience factor," said Israel, the Macy's Liquors owner. ``Who wants to make another stop?"

Bruce Mohl can be reached at mohl@globe.com.

(Correction: Because of a reporting error, a story in Sunday's Business & Money section about a ballot initiative to allow more grocery stores to sell wine incorrectly implied that shoppers need a membership to shop at a Costco Wholesale Club liquor store. Costco does charge its shoppers membership fees, but membership is not required to shop at its liquor store. Also, an accompanying article of reader opinions about the initiative incorrectly stated that it would allow food stores to sell beer.)

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