Study hits wine sales 'monopoly'
Food store proposal would lower prices, Mass. trade group says
Advocates for a November ballot initiative that would allow more Massachusetts food stores to sell wine said yesterday that their proposal would save consumers $26 million to $36 million per year by ending the ``virtual monopoly" of wine sales by package stores.
That assertion was part of a $38,000 study prepared at the request of the Massachusetts Food Association , a trade group of local grocery stores and the prime mover behind the ballot question.
Partly based on comparisons of wine sales in states where many grocery stores can sell wine with sales in states where they can't, the study estimates that if voters approve the initiative, Massachusetts wine prices would fall 5 to 7 percent because of increased competition.
The Wine Merchants and Concerned Citizens for Safety , a group that opposes the initiative and includes many package stores, noted there are already 2,500 independent wine merchants in Massachusetts, providing consumers with plenty of competition and convenience.
The food association study doesn't take into account ``the social costs that will be incurred by the single largest expansion of liquor licenses in this state in its history," said Justine Griffin , a spokeswoman for the group. ``Consumers and concerned parents have to decide whether we really need over 2,800 new liquor licenses in Massachusetts."
According to the group, national grocery and convenience store chains have no incentive to police underage drinking, and it will increase if the initiative is approved because alcohol will be more widely available.
Christopher Flynn , the president of the Massachusetts Food Association, said he expects fewer than 1,000 food stores to apply for wine licenses, and he dismissed claims that selling more wine in food stores would increase underage drinking; there is no evidence to suggest that underage drinking violations are higher in states where many grocery stores can sell wine.
Besides, most underage drinkers gravitate toward beer and liquor, not wine, he said.
Arguments about underage drinking are a ``smoke screen" by package stores, said Flynn, adding: ``It's an economic issue. They're trying to protect a virtual monopoly."
According to the study, an estimated $515 million in wine is purchased annually in Massachusetts, with package stores ringing up 85 percent of that total and convenience and grocery stores accounting for the rest. That figure doesn't include wine bought in bars and restaurants.
Package stores own the majority of the 2,555 liquor store licenses in the state, according to the study. A 1934 law also prohibits one person or company from owning more than three licenses statewide, a barrier to supermarket chains that want to sell wine in all their Massachusetts stores.
Under current regulations, 30 to 40 of the food association's roughly 600 grocery stores have licenses to sell some form of alcohol, Flynn said.
``Because current state law protects the market power and market share of package stores, they can sell more wine than retailers in other states and can charge higher prices and make higher profits on wine sales," the study claims.
The ballot initiative would create a category of licenses that grocery stores could apply for to sell wine, Flynn said.
The study was prepared by the Northbridge Group of Westford. Yes on 1: Grocery Stores and Consumers for Fair Competition , a group that Flynn chairs, paid for the study, Flynn said.
``We restrict licenses to control certain industries to keep people safe," Griffin, an opponent of the initiative, said. ``Just because someone will make more money, in this case, Stop & Shop and 7-Eleven, doesn't mean it's a good idea."
Chris Reidy can be reached at reidy@globe.com. 
