Name change coming for some liquor stores

PROVIDENCE, R.I. --About two dozen Rhode Island liquor stores may need to change their names or risk losing their business licenses under a 2004 law state officials have just started to enforce.

Officials at the state Department of Business Regulation said they began enforcing the law this month that broadens a ban on liquor sales by franchise stores by preventing business owners from using names that suggest their store is part of a franchise.

State authorities delayed enforcing the two-year-old law until several months after a federal appeals court declined a store's request to stop the state from enforcing the law while a legal challenge is pending. The delay was designed to give businesses a chance to comply, said Jeffrey Greer, associate director of the department's division of Commercial Licensing and Racing & Athletics.

"Retail consumers often assume chains are bigger operations with better selections, and perhaps lower prices," Greer said.

If independent stores have names similar to chain stores, Greer said consumers might assume the stores are part of a franchise.

The rules have already forced Ronald McGreen to change the name of his East Providence store, Haxton's Riverside Liquors, to McGreen's Fine Wine & Spirits. Several stores in Rhode Island shared the Haxton's name, he said.

While McGreen said he regretted sacrificing his store's name recognition, he said he was sympathetic with the law's intent. He said chain stores have more buying power and can force smaller stores out of business.

"Once you eliminate the independents, the price will go up," McGreen said.

State regulators have issued notices threatening to revoke the licenses of 10 stores that haven't changed their names, Greer said.

One company, Wine & Spirits Retailers, filed a lawsuit in federal court in 2004 to fight the franchise store prohibition. The company had struck franchise agreements with several stores in the state. The lawsuit is pending.