Allowing wine and strong beer in grocery stores: the tale of Tennessee

Abstract

Purpose This study aims to examine whether the introduction of wine or regular strength beer (B) sales in Tennessee grocery stores significantly increased the number of alcoholic beverages (AB) consumed or excise taxes collected in the state. Design/methodology/approach This study uses both a time series and a model-based approach to assess if a significant change in alcoholic beverage excise tax collections occurred after the natural experiment. The study evaluates monthly tax collections from B, mixed drinks and AB between January 1968 and September 2018 published by the Tennessee Department of Revenue. Findings The findings suggest that neither alcoholic beverage consumption nor excise taxes collected increased substantially in Tennessee as a result of the introduction of wine and regular strength B in grocery stores. It is likely, however, that some changes inside the industry were significant. Originality/value This study assists policymakers and analysts in determining whether allowing the sale of wine and regular strength B in grocery stores will have a substantial impact on the total amount of AB consumed or excise taxes collected by the jurisdiction.