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Florida Retail Leader Charles Bailes Responds To The Walmart Challenge

February 27, 2014

After the recent introduction of two new bills in the Florida legislature that would allow spirits to be sold alongside wine and beer in supermarkets and retail stores, Florida’s independent retailers are seeing the move as a call to arms. The two new proposals, in the Senate (SB804) and the House of Representatives (HB877), are being supported by Walmart and opposed by the Florida Independent Spirits Association, as Shanken News Daily reported on January 21. Committee chairmen in both chambers will soon decide whether these bills will receive hearings.

Charles Bailes, Chairman and CEO of the 142-unit ABC Fine Wine & Spirits, Florida’s largest independent beverage alcohol retailer, views these bills not only as threatening to small independent retailers in Florida, but also to the control of underage drinking. He recently spoke to Shanken News Daily about this issue.

SND: Is Walmart the only big retailer behind these proposals?

Bailes: They tried to build a coalition, and some Florida grocers have stayed neutral. I know Walmart has been surprised by that. In my conversations with legislators, I noted that it was interesting that we hadn’t heard from any of Florida’s existing grocery chains on this issue.

SND: Even though the proposals are clearly in the grocery chains’ interest.

Bailes: Right now grocery stores can carry spirits in Florida—they just need a separate entrance facing outside. Ten years ago, I could count the number of grocery stores selling spirits on two hands. Now there are nearly 400, so the outside entrance requirement hasn’t been a competitive disadvantage. These proposed bills would put spirits right on their store shelves, cross-merchandised with the soup and cereal. When I talk to legislators, I discuss the social rather than the economic impact. I talk about how important it is to understand that selling spirits is a privilege. It’s not a right just because you have a grocery store.

SND: What’s your sense about how the legislators feel?

Bailes: One argument I’ve heard is that our industry is heavily regulated and perhaps overly regulated. They question the requirement of an outside entrance. From my perspective, the most important issue is controlling access to spirits for minors. We do business in four big university towns in this state, and I know how hard minors work to get alcohol. I also know how hard we work to keep it out of their hands. Our goal is to explain (to the legislators) that selling beer and wine is different than selling liquor. If liquor is on the grocery store shelf, the best systems at checkout won’t prevent minors from getting it. If they don’t buy it at checkout, they’ll steal it, or drink it in the store. In the state of Washington, those have been two unexpected challenges.

SND: So the underage drinking issue, rather than the economic side, is your primary weapon in this fight?

Bailes: The legislators are hearing a separate economic argument from smaller independents who would bear the brunt of this change. But somebody has to convey the message about underage drinking. If access increases, underage consumption increases. Our stores are 8,000-10,000 square feet and are easily monitored. Grocery stores are huge with minimal staff. Some of them are open 24 hours a day. Who will monitor the spirits on the shelf? We don’t employ anyone under 21, except in our main offices, while much of the grocery store workforce is comprised of teenagers.

SND: How actively are you going to be involved in this?

Bailes: Very actively, because I feel so strongly about it. We’re talking about going from a completely controlled environment, to one with no control. I haven’t had one legislator tell me that they disagreed with any of my points.

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