Based in Bethesda, Md. Many of its outlets approach 50, square feet, or more than the average supermarket.
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And like Uber and other market disruptors, it is willing to push the regulatory envelope. In , Total Wine was slapped with a license suspension by the Massachusetts Alcoholic Beverages Control Commission for selling liquor below its costs.
The company wants to use a practice common in other industries: bring consumers into stores with irresistible bargains, and then sell them other, higher-margin products. Grocery stores often do that with staples, and electronics retailers with components such as printers.
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The practice is not allowed in the liquor industry, in order to discourage excessive drinking. The ban on loss leaders and other regulations also have the practical effect of protecting smaller package stores from large competitors like Total Wine that could otherwise undercut them. Other such measures include local ownership requirements and prohibitions on wholesalers giving retailers discounts on large orders.
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Besides litigation, Total Wine has successfully changed laws by whipping up consumers with political-style campaigns like the one about to debut in Massachusetts over coupons and loyalty programs. After years of effort, a bill legalizing Sunday sales became law in February. The company has even intentionally flouted rules to make its point. The lawsuit is still pending.
Local package stores see things differently.
To them, the seemingly innocuous customer-friendly changes pushed by Total Wine add up to a sinister whole, rigging the marketplace against smaller operations and accelerating the homogenization of American retail. Total Wine often opens its 20, to 50,square-foot megastores close to a competitor. Its store in Everett is located just down the road from another package store, and a minute drive from the family-owned Atlas Liquors. Speliotis did not return multiple calls and emails for comment, nor would he confirm any potential donations made to his campaign by Total Wine.
There are currently two different types of discount coupons available at US liquor stores: those reimbursed by a member of the industry such as a manufacturer or wholesaler , and those only redeemable by a retailer, says Robert Tobiassen a Virginia-based legal consultant who worked for the Alcohol and Tobacco Tax and Trade Bureau TTB for many years.
Mellion says that the currently permitted discounts, called rebates that are processed through a wholesaler don't have to be managed by the bottom-line retailer. He adds that only large retailers can work with and operate a labor-intensive, store-operated couponing system. Tobiassen notes that both types of coupons can actually provide the same bottom-line results for consumers. He adds that manufacturers' coupons benefit stores of all sizes because "they all will get the same redemption payments from the manufacturer. Several retailers, both on and off the record, said that Total's current approach to discounting — which it uses in other states — is an attempt to drive independent retailers out of the market by offering discounter smaller operators can't match.
Of Total Wine's current approach to the market, Ben Weiner, the president of MPSA and co-owner of four Sav-Mor Spirits stores in the state, said it is intended to put small retailers out of business by asking them to match less-than-wholesale prices.
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Total's Cooper says this is a fallacy. He adds that by offering these coupons the chain is able to "highlight new and interesting products while sticking to our commitment to provide industry-low prices. They make shopping more fun and affordable. A single-location Massachusetts retailer, who declined to be identified, said that by offering these types of coupons, Total was pulling the bait-and-switch in trying to convert their consumers to the chain's private label brands, which are less expensive than most established winery brands.
The chain has long been known for sourcing a broad selection of private labels at an advantageous cost by directly dealing with its winery partners. Weiner adds that this type of business ethnic is disingenuous and while he is "not against consumers saving money. I am against them being misled.
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Margins have long been tight in the wine and spirits retail business. He added his concern, shared by other retailers I spoke to, that with the current spate of discounting, the wine industry may risk transforming itself into one big commercial pharmacy or generic hardware store.
A history of big chains dominating smaller shops in a variety of retail sectors is nothing new, notes Rob McMillan, the Napa-based founder and executive vice president of the Silicon Valley Bank Wine Division. However, he adds that "it is not healthy in a capitalistic society that you take one line of the business and use it to undercut the competition".
This will likely be a closely watched battle between big and small businesses and states' rights versus public safety, concludes Mellion. Sign in. An amendment to Massachusetts law that would allow discounts is being resisted by independent store owners.