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Retailers protest liquor bill

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Shop owners say change would hurt small businesse

By Reece Murphy

A bill before the state Senate Judiciary Committee, sponsored by Lancaster’s Republican Sen. Greg Gregory and

Democratic Sen. Brad Hutto of Orangeburg, has liquor store owners statewide concerned about the effects it will have on their livelihoods.

S.404, which faces a full committee vote Tuesday, April 9, would change the state’s liquor laws to allow retailers to buy up to seven retail liquor store licenses instead of the three allowed under the current 37-year-old law.

Retailers say the bill, which must still clear the Senate and House, creates an unfair market advantage for the large multi-state retailer pushing it, Total Wine of Potomac, Md., and big-box stores such as Costco that support the move.

For small retailers such as Bobby and Marlene Stephenson of Carolina Wines & Spirits in Indian Land’s Carolina Commons shopping center, the concern is especially real, and comes from all sides.

Bobby Stephenson said he researched several possible businesses after retiring from an engineering career and decided to open his store based on a niche next to Sun City Carolina Lakes – and the market security offered by state regulations.

“I got into this because I knew the big guys weren’t in it,” Stephenson said. “How can you compete against a Total Wine, or Costco or Walmart? Publix already has stores selling liquor in Florida, and if Publix gets into it, Harris Teeter is going to get into it. And they’re right there (next door).

“I’ve put my whole life savings, my whole 401K, a quarter of a million dollars, in this thing. Going on four years and I still haven’t taken any money out of this store,” he said. “But just when I’m starting to see the light at the end of the tunnel, all of a sudden the state cuts off my legs.”

Stephenson is not alone in his opposition to the bill. A raucous judiciary subcommittee hearing on the matter in March drew an overflow crowd with dozens of other opponents forced to wait in the hall. Don Podrebarac, who owns Southern Spirits just south of the state line on Charlotte Highway in Indian Land, was one of those who attended the hearing.

Among the allegations opponents make in their arguments is that Gregory and Hutto, both of whom are members of the judiciary committee, are in Total Wine President David Trone’s pocket.
Trone and his company are frequent contributors to South Carolina politicians and political causes, and donated $1,000 each to Gregory and Trone, among others.

Gregory acknowledged the donation, which he said was unsolicited and represents less than 1 percent of his campaign contributions over the last four years and is not worth the abuse of supporting such a contentious issue.

Gregory said he admires Total Wine as a company and likes the fact that Trone is a graduate of Furman University, but stressed his position on issues has never been swayed by contributions.

Gregory, whose grandparents once owned liquor stores in Richland, said he has chaired a subcommittee that handles state law pertaining to the sale of alcohol, so he understands the issues.

Gregory said he believes that many of the state’s laws regulating alcohol sales, some dating back to Prohibition, are antiquated and have been skewed over the years to protect existing businesses and keep competition out.
Gregory said this bill represents his belief in the principal of free enterprise.

“The reason I am a primary sponsor of the bill is because I believe the government should have no role in limiting the locations of a business, except through zoning,” Gregory said. “The number of locations of a business should be a function of the marketplace. Business should compete on price, service and location, not through artificial limits set by politicians. Our sole role (in the Legislature) is to put in place an environment that is best for the consumer of any legal product.”

As one of the state’s top liquor retailers, Podrebarac says he believes he can stand up to the “big boys,” but he still opposes this bill.

Podrebarac, like Stephenson, said the liquor business has always been regulated, both by the federal government and every state in the nation to some extent.

And it’s those very regulations, he said, that prevent liquor stores from simply changing their business plans in response to a larger, better-positioned competitor, such as Gregory’s building supply company did to compete against Home Depot and other hardware super stores.

“It’s like comparing apples to anthills; it’s something completely different,” Podrebarac said.

Podrebarac said he sent Gregory a list of 21 reasons why liquor stores can’t change with the market in keeping with Gregory’s free enterprise argument.

Among them, he said, is the fact that liquor stores can’t set their own hours of operation; can’t sell but to a limited customer base; can’t deliver; and can’t sell any products other than liquor and wine without a “party store license” and a separate entrance.

Podrebarac said liquor retailers can’t buy from out-of-state distributors with better prices; can’t pool their purchases between operations for more purchasing power; can’t buy on credit; and can’t warehouse their inventory off-premises, which prevents small retailers from buying in bulk.

“My point is you cannot go and change one item and consider it free enterprise, especially when that change is meant to benefit one small interest group,” he said.

Podrebarac said he believes the state will also suffer from the loss of jobs, property tax revenues and lottery revenue.

He said he agrees with Gregory on the value of free enterprise.

“I’m 100 percent behind making the liquor retail business in South Carolina free enterprise, but make it free enterprise,” Podrebarac said. “Rework the whole law and don’t put shackles on it and let a small number of groups capitalize on it to the detriment of others.

“I think it’s morally wrong that the state would take steps to do something that would benefit a few, knowing that it’s going to hurt people who made a decision to get into business based on the laws as they were,” he said. “And if you’re not going to do that, then there should be some kind of ramp-up period so that they can make a decision on how they’re going to adapt to the changes in response.”

Gregory said as it is, he doesn’t believe S.404, if passed into law, will affect small liquor retailers in Lancaster County, saying he believes stores such as Total Wine and others will use their remaining licenses in larger markets.

Still, Gregory said he stands by his belief in the free market. He noted that the original bill called for allowing up to 10 retail liquor licenses, which was reduced in subcommittee to seven, and says he is open to other changes.

“We all go to Columbia to change laws, and just because they’re written a certain way doesn’t mean they won’t change,” Gregory said.

Be that as it may, Stephenson is still not convinced S.404, or any version thereof, will help him compete against the buying power of a superstore – ramp-up period or not.

“In general, I don’t think the government should be involved in business, but this is a business that is regulated and always has been regulated, and that’s the business we based our decisions on,” Stephenson said. “There is no way that we can compete; I can’t sell like they can. If this law passes, I am done.

“If this law passes, nobody is going to want to buy this store because they won’t be able to compete either,” he said. “And I’m going to die on the vine.”