Old McDonald Sells Wine in Dry Tennessee Counties

Russellville Tennessee made history at the Tennessee ABC this summer with approval of the first Farm Winery License.

Russellville is an unincorporated community in Hamblen County, Tennessee, located along U.S. Route 11E, midway between Whitesburg and Morristown, and north of Knoxville. We suspect that the town is as dry as the day is long.

In it's infinite wisdom, in the 2012 Session, the Tennessee General Assembly legalized the sale of wine made from grapes grown on  farms, even in dry counties.

Old McDonald grows the grapes and contracts with a winery to make wine. He can then offer tastings of the wine at the farm and sell bottles of wine to tourists, and to locals.

Unlike traditional retail package stores, we see no restrictions on sales on Sunday, popular holidays like July 4, or late at night, after liquor stores are legally required to be closed. Of course, in a dry area, competition is limited only to beer.

The applicant, Katie Martin, has contracted with Hillside Winery in Sevierville to produce the wine on behalf of The Grape Barn at Nolichucky Vineyard.

Wildcats Not Buying Wine in Volunteer Groceries

Media hype seized upon the recent Kentucky case that ruled in favor of wine in grocery stores. The front-page headline of The Tennessean trumpeted: "Wine-in-grocerires effort gets boost from Kentucky Ruling."

Not so - from a legal perspective. Tennessee and Kentucky law are vastly different. It's an apples and oranges comparison.

Kentucky law allows drug stores to sell liquor anywhere inside the store. Grocery stores have to have a separate store, where access by minors is controlled.

A Kentucky licensing friend, Dan Meyer, was quoted as explaining that "the law dealing with the sale of wine and liquor in pharmacies and grocery stores dates to Prohibition, when prescriptions could be obtained to buy alcohol at drug stores." The sales were restricted in grocery stores, he said, because the thought was that minors are often in grocery stores and should not be exposed to booze.

Judge Heyburn noted that in modern times, drug stores and grocery stores sell similar goods and both are frequented by minors. The judge found that Kentucky failed to justify “why a grocery-selling drugstore like Walgreens may sell wine and liquor, but a pharmaceutical-selling grocery store like Kroger cannot. The Louisville Times Courier has more details.

We understand why the judge found that Kentucky's law was invalid. 1930's drugstores are completely different from today's Walgreens and CVS, which cater to the same audience as grocery stores - including minors. Personally, both my kids are drawn to Walgreens and CVS for impulse purchases of holiday items, toys and candy.

  

Tennessee liquor laws do not allow drugstores or grocery stores to sell liquor. Tennessee requires that liquor store owners be Tennessee residents. Liquor stores can only sell liquor, cash checks and sell lottery tickets. Only one liquor store can be owned by one person or shareholders.

In Tennessee, a pharmacy, as well as a grocery store, does not qualify for a liquor license.

There may be legal issues with Tennessee's retail liquor store laws, but the problems that lead to the failure of the Kentucky law are not relevant to Tennessee.